N.B.E.R. Economists on the Candidates’ Economic Plans

Apparently, The Economist magazine doesn’t think a survey of economists by Dilbert creator Scott Adams is sufficient, so they’ve done their own.

Via e-mail, The Economist contacted all the economists in the National Bureau of Economic Research (N.B.E.R.) — a sample that would include just about every top economist in the United States — and 142 economists responded (I was one of the 142, but the questions got hard halfway through and I had to choose “don’t know/no opinion” most of the rest of the way).

The results were striking.

Remarkably, only about 10 percent of these economists self-identify as Republicans. Nearly half of economists called themselves Democrats; the rest were undeclared. Since when did economists get so liberal? I clearly have been hanging around the University of Chicago too long.

The good news for my friend Austan Goolsbee, who has been a leading figure in the Obama campaign, is that 80 percent of the economists polled think Obama would pick a better economic team. Even the Republicans polled think Obama has a better grasp of economics than McCain.


steve long

Well, of course, if an economist is a democrat or favors Obama's plans, he must be wrong. The reasons why, of course, don't matter. What matters of that old free market chant -- no matter how impractical it is.

Lately, I've been seeing political posts about how horrible socialism is with specific reference to France. The post usually says something like, we don't want this country to turn into France, do we? Having spent some time there, I'm not sure exactly what the horror about that would be. Perhaps it's those rich French pastries?

There is a very strange aspect of this Chicago/Reagan free market mantra that is so often chanted in this column. There is a completely inexplicable blindness to the fact that the free market -- as we know it -- is totally dependent on constant government support to allow it to work, in terms of preventing fraud and enforcing rights and so much more. The free market is not "natural", it's a very artificial and temporary stage that takes a balancing act to maintain.

The fact is we are living in a socialist country here in the US. It's just that the socialism is aimed more at the welfare of markets and their participants than it is at the welfare of people. I'm not sure that France is so different.

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pkut

t-bone- the link you provided cites two graphs. the first looks is generated by looking at "Growth rates are calculated using the last year before the administration took office to the last full year for which the administration was in office", and the second "growth rates are calculated using the first year in which the administration is in office to its last full year in office". Neither of these uses a lag. Again both of these metrics would assign "blame" for the 2000 recession to Bush, which started 60 days after he took office. Surely he had nothing do with that recession, and if anyone was to get credit for it, it would be Clinton. You need to look at a lag at both ends. What is that in general? I don't have an exact time as it likely varies, but it likely should be at least 1.5 yrs to begin with. Again, if you want long term data, look at the example of what's happening on a state level. People vote with their feet and they ain't moving to Illinois, Michigan, New Jersey, MA, etc.

As for liberals, it's simply a statement based on their policy positions. Their positions are derived from their knowledge that they know what’s best for everyone. Whether it's what car to drive, what temperature your house should be, the pressure in your tires, how much water you can flush your toilet with, how dispose your garbage, speech codes, social engineering through tax policy, etc.

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China Hand

The definition of an economist is: "someone who can predict the past with 50% accuracy".

T-Bone

"Like most liberals, economic liberals assume they know how to run the lives of others much better than the individuals themselves because of their vastly superior intellect."

Like most conservatives, pkut thinks he/she can dismissively explain the thought process of opposition thinkers as being simplistically and unrealistically "assumptive"? Oh the irony.

pkut, even when you apply a one-year lag to economic performances of EITHER congress or the president in order to control for delayed effects of the previous party, the performance measures continue to heavily favor the Democrats. And that's even with the tight monetary policy that tends to coincide with Democrats, and loose monetary policy that attempts to give life to Republicans.

http://angrybear.blogspot.com/2007/02/god-punishes-us-when-we-collectively_14.html

USdoc

One problem with the survey is that is was conducted not of randomly selected US economists but from "America’s premier association of applied academic economists." The pool of academic economists, as your survey reveals, as do the pool of "academic"-anyone in the US, tend to be predominantly liberal/Democrat. And as much as we would like to believe otherwise, these people of math and science are just as susceptible to bias as the rest of us. And I think it dangerous to assume that the academics are smarter than the non-academics in their field.

pkut

They poll that way because like every other academic field they are tremendously liberal. Even in a field like medicine, academic physicians are much more liberal than their private practice peers, whose views would never reflect that of the overwhelming majority of private practice physicians. Like most liberals, economic liberals assume they know how to run the lives of others much better than the individuals themselves because of their vastly superior intellect. This is than reflected in their opinions on everything, which all boil down to having like minded people dictate who others run their lives, i.e. through taxes, energy policy, regulation, etc. what's always struck me funny is how unthinking and simplistic liberals actually are. If you begin with the supposition that a president and his party can influence the economy why in god's name would you than "compare" presidents by looking at the economy from the day the took office to the day the left office? Surely there is a lag between when a president's policies take effect and when they end, but none-the-less you get people making the absurd comparison by citing higher gdp,for example, under democratic presidents vs. repubs. Was bush responsible for the recession that started 60 days after he took the oath? Surely not but many on here would count that as evidence of awful republican policies. If you really want to know whether democratic/socialist policies are better than lower tax/free market economies just look at growth/employment b/t the US and Europe and on a state level (UT, NV, ID, CO,AZ,FL ,TX vs. MI, IL,PA,NJ,NYCA). Alternatively you could just see how people are voting with their feet, and no it's not because of the sun. Similarly, ask yourself how many US trained physicians leave to go practice in europe of canada vs. those wanting to come here to practice. that ought to tell you what physician's think is the better system

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Paul K

Chesapean @70 "If above 70% of experts are merely “somewhat familiar”" - these are economists; many would say they are only "somewhat familiar" with their own dissertations!

You said the majority were “unfamiliar”, but "somewhat familiar" is not "unfamiliar" by any normal measure of those terms.

I think most would say that they can judge a plan based on being somewhat familiar - they understand the main points and the main plan; the rest will be tinkered with no matter what - nothing gets through Congress unscathed, so the main aspects are what you need to judge.

These were not linked on this site as a vetted study or report. It was explained in terms of what they are. Your objection seems to be simply that you do not like the results rather than truthfully what the survey did. I suspect that if the result were reversed, you would be very comfortable with the surveys. Just my opinion.

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T-Bone

Chesapean,

You think the economists polled don't know the basics of the candidates' plans? Can you rattle off all the specifics of the plans of either candidate? That is, if they've even bothered to give specifics that are consistent from day to day? I research their policies on a regular basis and still wouldn't say I'm very familiar. But I certainly know much more than I need to make a judgment on who would be better for the economy.

It's a very strained argument to say this poll of leading economists tells us nothing because the economists don't know enough to pass judgment. I think your political leaning are causing you to seek any rationalization as to why we should discount this survey, no matter how weak.

Chesapean

@62: Not making it up Paul K. Slide 27 of the Dilbert poll shows 73% of economists as less than "very familiar" with McCain's program, and 70% of economists as less than "very familiar" with Obama's programs.

If above 70% of experts are merely "somewhat familiar" or less about a topic they are asked to evaluate, I would say the vast majority are "unfamiliar" with that topic. As I did. Pretty straightforward stuff.

In other words the Dilbert poll results reflect demonstrated, documented ignorance among the survey respondents. The N.B.E.R. survey doesn't even attempt to measure the relevant knowledge of its respondents. For all we know, the N.B.E.R. respondents are as ignorant as the Dilbert ones. They may even be the same people.

I have three objections to all of this.

First, these two polls are intellectually dishonest in the extreme. Anyone who takes them seriously can only be misled in forming an opinion about the economic merits of McCain policies compared to Obama policies.

Second, it is a pure disgrace that the enlightening concepts of creative analysis which underlie the beauty of Freakonomics (the book) could be so sullied by publication of these flawed surveys on the Freakonomics blog.

Third, if these polls were published here to stimulate learning and discovery of statistical methods, that would be pretty cool. But clearly they were NOT published here for that purpose. I charge that they were published here as propaganda in support of Barack Obama's presidential bid.

My political leanings are "NoBama, NoWay," but even one who's political leanings may be very different from mine has cause to question the nature and circumstances of the supportive publication of these two polls in this forum.

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Joe Smith

"In public finance, we learned about how the ONLY time a government should interfere in a market is when there is a market failure"

Define "intervention" and "market failure".

The lesson of the last thousand years of economic history is that government institutions and legal frameworks designed to create and enforce transparency and fair dealing are essential to economic development because it reduces transaction costs. Markets only work efficiently when government creates and enforces a proper framework for transactions. Right wing economists and free market advocates tend to take legal systems for granted and so do not appreciate the importance of appropriate legal rules.

What we have here is government abdicating its proper role of forcing transparency and fair dealing with the result that we have been overrun by pirates and brigands wearing three piece suits and spouting University of Chicago nonsense.

My personal economic hero is Bishop Absalon of Denmark who knew what was needed to revive a devastated economy and who founded a city known to this day as "Merchants' Harbor".

We have had a bubble (fed by bad monetary, bad fiscal policy and a lack of transparency), now we have a bank run (also fed by the lack of transparency). In the short term the government needs to address the bank run. In the medium term it needs to restore transparency. If business wants to avoid heavy handed regulation it needs to get on a transparency bandwagon RFN.

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Princess Leia

Austan rocks! Obama is lucky to have him. :)

Paul K

Ari @66: please tell me you are joking. Although you would like equal biases, the point is not that D's can only find in favor of Obama and R's can only find in favor of McCain - if that were the case, why ask them at all?

The point is that their biases are stated so you can inform yourself of potential leanings. But, they were asked not who they support, but their technical assessment of the two plans.

Ideally we would want some other questions to do regression analysis, but we do not have them.

The assumption that professionals are incapable of reasonable analysis because of their voter registration is pretty absurd. If so, then no economist can be trusted since you would have to tease out what political value they may see in everything.

Paul K

WDB @63, "but I’m not willing to give up my freedom or to initiate acts of violence against others in order to achieve it. " - but the nature of free trade is "violence against others" according to your use of "violence". There are 4 factors:

1. If gov is too limited, free markets and free trade will cause serious "violence" against some to the gain of the others. This is due to information asymmetry mostly, but it has to do with how some will take advantage of others (their lack of knowledge or inability to do anything). This is not a supply issue, it is that natural barriers to entry and concocted barriers to entry keep supply controlled by the suppliers in some markets and areas.

2. Totally free trade means that you tend to trade with the most "lawless" countries or suppliers since they will offer the lowest price (their "unfair advantage") which means serious violence (often real violence) against someone - child labor, etc.

3. If you choose not to get Health insurance and get cancer, you will deplete your funds and the government will end up paying the $300K as now. It will likely be even higher since if caught sooner, it will be cheaper. You are now a major drain on society as least as a ticking time bomb. If most people have basic health care coverage, then illness is usually caught when it is cheaper to deal with.

4. There is no coercion. You are free to leave the country and find one where there are no taxes and no regulation. We as a democratic society agree in general to how much taxation and government intrusion we want. This ebbs and flows over the years, but the truth is that most voters (likely you as well) want the impossible combination: no taxes and more services that benefit you.

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Ari B. T

This and Scott Adam's survey suffer from poor statistical analysis and sampling errors. If you have a sample with two known biases, Democrat and Republican, then you need to have an equal amount of Democrats and Republicans. Here you have 500% more Democrats than Republicans (and a total 90% non-Republicans) but only %80 think the Democratic candidate is better, so, statistically, McCain wins.

In other words:

10% Republicans, 20% side with Republican: 200% of expected support for McCain.

90% Non-Republicans, 80% side with Non-Republican: 88% of expected support for Obama.

Diana

Interesting results, but why do you conclude that the 44% who are undeclared are automatically liberal?

They may just figure that Barak Obama is a smart guy who is saying some things that appeal to his constituents while realizing that the practical implementation of these ideas will require some changes to the current forms of his plans.

WDB

A lot of economists apparently tend to be social engineers. Whatever happened to philosophical reasons for preferring free trade and limited governance? What about the nonaggression principle?

I know people like to envision some Brave New World where everyone's quality of life has been maximized according to all the "indicators," but I'm not willing to give up my freedom or to initiate acts of violence against others in order to achieve it. Whenever you make a law against a particular form of trade (a regulation), you are saying that you are willing to initiate violence against people for engaging in that trade. And when you want to use tax money for some purpose, you are saying that you are willing to initiate violence in order to seize the fruits of people's labor. I know that most people just pay it, but they do not have the freedom not to. If I decide to keep what I produce, people with guns will show up and put me in prison.

Even if there is some potential efficiency gains in a socialistic or "progressive" society, the system has to be based on violence and coercion.

Furthermore, I'm not convinced that the "progress" is always actual progress. For example, I am absolutely not interested in medical insurance at the current price. I know that medical expenses are high, and I know that it is risky not to purchase insurance. But I am willing to take that risk because the current price of insurance is really high. (Let's say the current price is equivalent to a half hour of labor per day.) And let's say that you socialize medicine, so that I am now forced to insure myself, either directly or through tax money. Here is a reasonable outcome: I go in to clinics for a few checkups and minor health problems throughout my life, but nothing above my deductible. Then at the age of sixty-five, I get cancer, and thanks to the health insurance system, I am able to live fairly comfortably for another year by consuming 300,000 dollars worth of treatment. Otherwise I would have only lived for two months in discomfort. So thank God for that health insurance right? Well, of course I had to spend a lot more time working in my life in order to pay for it. Maybe I would have preferred that extra half hour a day to relax and enjoy my life even at the expense of living for a year less. I know that some people will be glad that they had the insurance, but some people won't. Is anybody really willing to impose something like this on everyone by coercion. I believe that people should be free to make cost-benefit assessments for themselves.

Check out a great animation on the philosophy of liberty:

http://www.youtube.com/watch?v=muHg86Mys7I

"If I knew for a certainty that a man was coming to my house with the conscious design of doing me good, I should run for my life." - Henry David Thoreau

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Bobby G

Please, people, do not direct your frustrations concerning the Bush administration and the failing economy in general at me. I was indirectly called some names here and frankly I don't appreciate it. I read the article, if you'll read my post and not just get upset that I was surprised at how liberal these economists are, you'll see that I was merely musing about the general practice policies I had learned in school; I wasn't calling anyone stupid.

And yes, I am aware that the real world is different from school. It still makes sense to me, however, that I know how to spend my money to maximize my own personal utility than the government does for me. To everyone who questions my logic, does that mean you want the government to control all of your finances? That doesn't sound like capitalism at all.

In public finance, we learned about how the ONLY time a government should interfere in a market is when there is a market failure, and even then, only if the government's solution will help the market (because quite often it does not). As I said, I hold this to be a truth... a real world truth.

On that note, is anyone else disturbed by how the rallying call of this election has been *more* regulation? People cite deregulation as the problem that led to this credit crisis. I don't see it that way. People keep citing these removals of risk limitations as deregulation, but that's not the whole story. These firms were heavily regulated from the start, and the removal of the risk criterias was just an example of poor regulation. They were essentially told by the government they would be bailed out if they ever got in trouble... i.e. there was no risk for them as a business. With that incentive set up for them, of course Frannie and Freddie would buy up any mortgage they could within the risk requirements, set by the government. Then, as the government begins removing the risk limitations in the 90's and patting itself on the back for allowing more American homeowners, Frannie and Freddie buys up these risky mortgages since, hey, there's no real risk. So it was poor regulation that was more responsible for the crisis than deregulation... and now we want MORE regulation?

So since I got so many comments and I have a few minutes, I'll address them.

First of all at nearly everyone: thank you for the blanket statements. Like I've said before, so many of you like to provide blanket statements as truths with absolutely no support.

@#3,

Blanket statement.

@#12,

Thanks for providing Steven Levitt's proposed observation as a cold hard fact. You are fueling the chronic problem of misinformation in our country that hurts us so bad.

@#13,

You are speaking about a direct democracy, which is not what the United States is. We are a representative democracy with many, many bad incentives for our politicians that leads to many economic spending inefficiencies. Just one of the reasons why I think lower taxes and lowered spending is preferable.

@#15,

Answered above.

@#17,

Because their government is different from ours, quite simply. That and we could not survive the economic shock it would take to transition to their form of government.

@#18,

Wow, a closed-minded liberal? What an oxymoron (sarcasm).

@#19,

Name calling on me, fantastic. Have you taken any econ classes before you start bashing me? It's easy to see better end results, the difficult part is getting there... a transition to a type of governmental system that some other countries have would be very difficult indeed. Just cause you can point to them doesn't mean they are snap-your-fingers-and-its-done possibilities.

It is sometimes frustrating to be on these boards. A lot of people here are clearly smart people yet they lack or have forgotten some sound basic economics principles. They're not easy principles, it took me a long time to study them and understand them, and I simply do not have time to write a long report summarizing these principles for those that disagree with me. Sometimes I wish I had a business card I could hand out that says, "Take an econ class." and then another one as backup that says, "Well, take it again and pay more attention." Economics is a complex issue and all I can do is urge people to be as informed as they can; try to support what you say here with economic background and avoid blanket statements as much as possible lest you propagate rumors and misinformed ideas into what another uninformed reader might then think to be a fact. Information is power, people. I'm done with this thread.

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Paul K

Chesapean @61, I hope you are not intentionally lying and just forgot: "The Dilbert poll was worthless, because the vast majority of respondents self-reported to be “unfamiliar” with Obama’s economic policies." - Actually slide 27 is pretty clear that 61% are somewhat familiar and 30% are very familiar. So, 91% are familiar, and only 9% are unfamiliar. If you know some math where 9% is the "vast majority", please share it with the class.

Otherwise, stop making up stuff because you do not like the answers.

Chesapean

@ Michele (81),

Thank you so much for posting the link to your paper!

I was most struck by this statement in Section 6, your conclusions: "[Subject] economists show a larger approving attitude on policy proposals than on the causes of the actual economic conditions."

This is completely backwards from what a yokel like me would expect from scientists. It suggests the experts in question tended to agree on the medicine, but not the diagnosis.

In a perfect world, all scientists (including economists) would arrive at the same conclusion, given the same empirical data.

Relating this to the current thread: Did the Dilbert and N.B.E.R. surveys address treatment, or sickness?

I say treatment. And in this a mistake.

Chesapean

What we have here is yet another FLAWED poll being used to show that Barack Obama's economics are better than John McCain's.

The Dilbert poll was worthless, because the vast majority of respondents self-reported to be "unfamiliar" with Obama's economic policies. The current poll is worthless on numerous procedural grounds -- it even claims to be "unscientific" -- but especially so because it offers NO evidence that the repondents have even examined Obama's policies. Maybe these economists know nothing more about the topic than a few TV blubs?

Barack Obama is a socialist. His economic policy, as outlined on his campaign web site, lines up exactly, and perfectly, with socialist economic objectives as described, for example, by Saul Alinski, author of "Rules for Radicals." All the key political associations of Obama's career are socialist. "Community organizing" -- an Obama specialty -- is an Alinski code word for "revolution."

Had the N.B.E.R. survey asked whether respondents prefered the socilaistic economic model to the capitalist model, I'm sure almost none would choose the socialist model.

In this the Freakonomics blog and The New York Times appear to be engaging in blatant propaganda, as if the American people are stupid. For goodness sakes, if the N.B.E.R. survey results are "unscientific," then what, exactly ARE they, if not worthless? Is there some way to get from "unscientific" to "Truth?"

Not in my book.

C'mon. The whole point of Freakonomics-style thinking is to discover untold reality, not obliterate it.

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