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The left flunks Econ 101





jmi256
This explains a lot...

Quote:
Are You Smarter Than a Fifth Grader?
Self-identified liberals and Democrats do badly on questions of basic economics


Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.

Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents' (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.

Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.

Consider one of the economic propositions in the December 2008 poll: "Restrictions on housing development make housing less affordable." People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.

Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.

Therefore, we counted as incorrect responses of "somewhat disagree" and "strongly disagree." This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer "not sure," which we do not count as incorrect.

In this case, percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%. But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1%. The pattern was not an anomaly.

The other questions were: 1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree).

How did the six ideological groups do overall? Here they are, best to worst, with an average number of incorrect responses from 0 to 8: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26.

Americans in the first three categories do reasonably well. But the left has trouble squaring economic thinking with their political psychology, morals and aesthetics.

To be sure, none of the eight questions specifically challenge the political sensibilities of conservatives and libertarians. Still, not all of the eight questions are tied directly to left-wing concerns about inequality and redistribution. In particular, the questions about mandatory licensing, the standard of living, the definition of monopoly, and free trade do not specifically challenge leftist sensibilities.

Yet on every question the left did much worse. On the monopoly question, the portion of progressive/very liberals answering incorrectly (31%) was more than twice that of conservatives (13%) and more than four times that of libertarians (7%). On the question about living standards, the portion of progressive/very liberals answering incorrectly (61%) was more than four times that of conservatives (13%) and almost three times that of libertarians (21%).

The survey also asked about party affiliation. Those responding Democratic averaged 4.59 incorrect answers. Republicans averaged 1.61 incorrect, and Libertarians 1.26 incorrect.

Adam Smith described political economy as "a branch of the science of a statesman or legislator." Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.


Source = http://online.wsj.com/article/SB10001424052748703561604575282190930932412.html
handfleisch
LOL @ "The left"
-the right almost bankrupted the economy from 2000-2008.
-the right presided over the start of the current Great Recession.
-Clinton balanced the budget and the right wrecked it.
-Clinton gave the country a budget surplus and the right gave us a massive deficit.
-right wing hero Reagan turned the US from the world's biggest creditor nation to the biggest debtor nation.

& the right knows more about economics? Believe that, & you're an amnesiac
MYP415
handfleisch wrote:
LOL @ "The left"
-the right almost bankrupted the economy from 2000-2008.
-the right presided over the start of the current Great Recession.
And you just again proved the ignorance many Americans have when it comes to economics. Any good economist, whether it be the leftist Keynesian Paul Krugman or the Libertarian Austrian Peter Botteke will tell you that that bubble and that crisis was largely blown to the size it was since before 2000 as well as into it. It did not magically start when Bush took office.

handfleisch wrote:
-Clinton balanced the budget and the right wrecked it.
-Clinton gave the country a budget surplus and the right gave us a massive deficit.
And Clinton was in office during a time that a supply sider was head of the Fed. Not only that, but it was the same man who resided over the Fed for most of Bush's term. Besides, Clinton did not completely embrace leftist theories or Keynesianism, but likely fell somewhere between them and the Chicago school.
handfleisch
MYP415 wrote:
handfleisch wrote:
LOL @ "The left"
-the right almost bankrupted the economy from 2000-2008.
-the right presided over the start of the current Great Recession.
And you just again proved the ignorance many Americans have when it comes to economics. Any good economist, whether it be the leftist Keynesian Paul Krugman or the Libertarian Austrian Peter Botteke will tell you that that bubble and that crisis was largely blown to the size it was since before 2000 as well as into it. It did not magically start when Bush took office.

handfleisch wrote:
-Clinton balanced the budget and the right wrecked it.
-Clinton gave the country a budget surplus and the right gave us a massive deficit.
And Clinton was in office during a time that a supply sider was head of the Fed. Not only that, but it was the same man who resided over the Fed for most of Bush's term. Besides, Clinton did not completely embrace leftist theories or Keynesianism, but likely fell somewhere between them and the Chicago school.

Funny how the disasters under a Republican president are always someone else's fault, and the major progress under Democratic presidents are always to someone else's credit. Are you actually saying Clinton wasn't responsible for his own budget balancing, or that because he did it he doesn't qualify as the "left"? (Tell that latter one to the right wingers).

You are ignoring many of the actions of the Bush presidency that helped that bubble to burst into a near-Depression, fortunately headed off by current policies. Things like Bush's increase in the deficit, a trillion dollars not for any positive programs but for an illegal and murderous war while cutting revenues by cutting taxes for the rich, and the subsequent loss in economic confidence coupled with various regulatory passes for Wall Street money games --just those were enough on their own to bring the disaster into being.
MYP415
handfleisch wrote:

Funny how the disasters under a Republican president are always someone else's fault, and the major progress under Democratic presidents are always to someone else's credit.
Did I ever say that? You are just putting words into my mouth now. Maybe to put things into perspective, I should tell you that I think Bush is one of the worst Presidents to date, right up there with FDR, LBJ, and Woodrow Wilson.

handfleisch wrote:
Are you actually saying Clinton wasn't responsible for his own budget balancing, or that because he did it he doesn't qualify as the "left"? (Tell that latter one to the right wingers).

No Clinton did do some good things, but he also did some bad. I consider him to be somewhere in the middle of the pack when it comes to ranking the presidents.

handfleisch wrote:
You are ignoring many of the actions of the Bush presidency that helped that bubble to burst into a near-Depression, fortunately headed off by current policies. Things like Bush's increase in the deficit, a trillion dollars not for any positive programs but for an illegal and murderous war while cutting revenues by cutting taxes for the rich, and the subsequent loss in economic confidence coupled with various regulatory passes for Wall Street money games --just those were enough on their own to bring the disaster into being.
Lol. How did the deficit or war exactly cause the bubble? (I am against both, but I also realize that they weren't the primary causes of the housing bubble.) The bubble was caused by loose monetary policy and easy money that was pumped into the system, allowing firms to overleverage and take on excessive risk. It was pumped by the Fed, Freddie/Fannie, and the FHA among others. The primary loan producers loved it because they made quick money off Wall St., the new homeowners loved it because they got houses they couldn't afford, Wall St. loved it because they made bundles on the mortgage backed securities made from it, investors loved it because the MBSs were seen as a great new way to invest in the housing market, the government loved it because home ownership went up and they could take the credit and get more votes.

Oh and you said that a loss in confidence caused the bubble. That statement is contradictory in itself since overconfidence causes bubbles, not under-confidence.
ocalhoun
Well, the questions were rather biased to set 'leftists' up for failure...
The only valid point of the article is that the 'left' does indeed often have problems getting their ideas of social justice to agree with economic reality.
(As the 'right' also often has problems getting their ideas of 'free market capitalism' to match up with economic reality.)
Bikerman
Quote:
Oh and you said that a loss in confidence caused the bubble.
Did he? I looked but couldn't see that...can you point out the posting?
MYP415
Bikerman wrote:
Quote:
Oh and you said that a loss in confidence caused the bubble.
Did he? I looked but couldn't see that...can you point out the posting?

:
Quote:
...and the subsequent loss in economic confidence coupled with...
Bikerman
MYP415 wrote:
Bikerman wrote:
Quote:
Oh and you said that a loss in confidence caused the bubble.
Did he? I looked but couldn't see that...can you point out the posting?

:
Quote:
...and the subsequent loss in economic confidence coupled with...


The paragraph starts "...helped that bubble to burst into a near-Depression"

I think you have misinterpreted the prose, though I would admit that it does mix the two up a little bit - I'm pretty sure he didn't mean that loss of confidence caused the bubble - aren't you?

Actually I think your summary is pretty good, and the only important factor that you might need to add* is the relaxation in regulations affecting banking.

* I say 'might' because I don't know the US situation that well, but I do know that this period was when the UK deregulated the banks in a big way (I know the details here).
All I really know about the US is a name - Gramm–Leach–Bliley Act. I never found the time to research it Sad
ocalhoun
Bikerman wrote:

* I say 'might' because I don't know the US situation that well, but I do know that this period was when the UK deregulated the banks in a big way (I know the details here).
All I really know about the US is a name - Gramm–Leach–Bliley Act. I never found the time to research it Sad

Yes, banks were deregulated, leading up to this crisis.

It follows a 5-step cycle:
1- Government regulates
2- Banks lobby and bribe
3- Regulations are relaxed and loopholes are made
4- Banks crash due to lack of regulation
5- In response to the crash, the government imposes regulation (back to step 1)

The best way I can see to stop the cycle is to prevent step 2.
Voodoocat
Great post, jmi! For some reason, I am not surprised at the results Laughing
jmi256
Voodoocat wrote:
Great post, jmi! For some reason, I am not surprised at the results Laughing


Neither am I.
But some of the 'lefties' I usually talk to can't all be simply categorized as 'stupid.'
handfleisch
jmi256 wrote:
Voodoocat wrote:
Great post, jmi! For some reason, I am not surprised at the results :lol:


Neither am I.
But some of the 'lefties' I usually talk to can't all be simply categorized as 'stupid.'


Yeah, somehow the world just can't be as smart as either of you. How do you stand the strain?

Not to mention all the intelligent right wing econ 101 moves:
-the cost of invading and occupying Iraq is over TEN TIMES what the Bush admin said it would cost
-saying Iraq would pay for its own reconstruction
-tax breaks for the rich that ended up just lining their pockets while increasing the deficit
-saving money by cutting funds for basic infrastructure
-thinking that derivatives trading running amok wouldn't hurt the economy

Yeah, the right are economic geniuses, for sure.

http://www.rawstory.com/news/2007/CNN_Price_of_Iraq_war_10_1102.html
deanhills
handfleisch wrote:
-the cost of invading and occupying Iraq is over TEN TIMES what the Bush admin said it would cost
Wonder what the final bill of the health insurance bill is going to be in ten years from now? As little as they could measure the total bill at the time when Bush was submitting his budget, as little as they could really know how much the health bill will cost the US in ten years from now. I've been against the Iraq war from beginning to end, but from a cost point of view it is always easy to judge in hindsight and retrospect. I'm almost certain that in ten years from now, they will be quoting a number of Obama cost items and frowning over them in a similar way.
handfleisch
deanhills wrote:
handfleisch wrote:
-the cost of invading and occupying Iraq is over TEN TIMES what the Bush admin said it would cost
Wonder what the final bill of the health insurance bill is going to be in ten years from now? As little as they could measure the total bill at the time when Bush was submitting his budget, as little as they could really know how much the health bill will cost the US in ten years from now. I've been against the Iraq war from beginning to end, but from a cost point of view it is always easy to judge in hindsight and retrospect. I'm almost certain that in ten years from now, they will be quoting a number of Obama cost items and frowning over them in a similar way.
Easy to make a prediction that won't be measurable for ten years. I don't think you're right at all to compare an estimate by the Congressional Budget Office, which historically overestimates potential costs of programs, and the Bush admin's craven and larcenous claim of how wonderfully affordable the bloody invasion and occupation of Iraq would be.

Your point is fine but strays from the point of the subject, which is the OP's ludicrous assertion that the left is somehow much worse at economics than the right, especially ludicrous after the disastrous economic management of the Bushes and Reagan that I have briefly noted above.
MYP415
handfleisch, any response to my post?
handfleisch
MYP415 wrote:
handfleisch, any response to my post?


Oh, I didn't think a reply was necessary because I didn't want to be redundant, since Bikerman already pointed out that you misconstrued my remarks.
ocalhoun
handfleisch wrote:
the Bush admin's craven and larcenous claim of how wonderfully affordable the bloody invasion and occupation of Iraq would be.

If you'll recall, shortly after the invasion, he declared the war to be over, and no doubt expected the occupation to be over far sooner than it was (or will be)- which would make it much less expensive.

As for your CBO traditionally overestimating the cost of things...
Then why did they feel the need to revise (upwards) the cost projection (conveniently) after the bill was passed?

I do agree entirely though, that the 'right' often flunks econ 101 as well;
particularly in the areas of:
-tax breaks for corporations means more money for individuals
-a free market can safely regulate itself
-lower corporate taxes means higher government revenue
liljp617
I think we can say politicians flunk Econ 101.
ocalhoun
liljp617 wrote:
I think we can say politicians flunk Econ 101.

True, though the different varieties fail in different ways.
deanhills
handfleisch wrote:
Your point is fine but strays from the point of the subject, which is the OP's ludicrous assertion that the left is somehow much worse at economics than the right, especially ludicrous after the disastrous economic management of the Bushes and Reagan that I have briefly noted above.
Perhaps you did not get my point, which was that you can only judge as you have done, in retrospect when you have all the facts in front of you. At the time when the budget was prepared, there could have been different facts in front of Bush. For example, he may not have anticipated a prolonged presence in Iraq.
handfleisch
deanhills wrote:
handfleisch wrote:
Your point is fine but strays from the point of the subject, which is the OP's ludicrous assertion that the left is somehow much worse at economics than the right, especially ludicrous after the disastrous economic management of the Bushes and Reagan that I have briefly noted above.
Perhaps you did not get my point, which was that you can only judge as you have done, in retrospect when you have all the facts in front of you. At the time when the budget was prepared, there could have been different facts in front of Bush. For example, he may not have anticipated a prolonged presence in Iraq.


I get your point just fine, but Bush being off by a factor of a thousand percent on the cost of his war is a failure of epic proportions. People complain about their grandchildren paying for government mistakes today, but this was the mother of all fiscal mismanagement and only for death, destruction and making the world a more dangerous place. Why anyone would want to minimize that, or compare it to a CBO estimate of health care reform, is incomprehensible.
ocalhoun
handfleisch wrote:

I get your point just fine, but Bush being off by a factor of a thousand percent on the cost of his war is a failure of epic proportions. People complain about their grandchildren paying for government mistakes today, but this was the mother of all fiscal mismanagement and only for death, destruction and making the world a more dangerous place. Why anyone would want to minimize that, or compare it to a CBO estimate of health care reform, is incomprehensible.

All true, but two wrongs don't make a right...
You can't fix fiscal mismanagement with even more fiscal mismanagement...
handfleisch
ocalhoun wrote:
handfleisch wrote:

I get your point just fine, but Bush being off by a factor of a thousand percent on the cost of his war is a failure of epic proportions. People complain about their grandchildren paying for government mistakes today, but this was the mother of all fiscal mismanagement and only for death, destruction and making the world a more dangerous place. Why anyone would want to minimize that, or compare it to a CBO estimate of health care reform, is incomprehensible.

All true, but two wrongs don't make a right...
You can't fix fiscal mismanagement with even more fiscal mismanagement...


The two wrongs only exist in your mind. The CBO projection for the health care bill, to bring us closer to minimum standards of decency, was deficit-neutral to deficit-lowering. The cost Bush's of the Iraq war, to kill people, destroy a country and make the world a more dangerous place, is close to a TRILLION dollars, which is 1000% of Bush's (supposedly) projected cost.
deanhills
handfleisch wrote:
deanhills wrote:
handfleisch wrote:
Your point is fine but strays from the point of the subject, which is the OP's ludicrous assertion that the left is somehow much worse at economics than the right, especially ludicrous after the disastrous economic management of the Bushes and Reagan that I have briefly noted above.
Perhaps you did not get my point, which was that you can only judge as you have done, in retrospect when you have all the facts in front of you. At the time when the budget was prepared, there could have been different facts in front of Bush. For example, he may not have anticipated a prolonged presence in Iraq.


I get your point just fine, but Bush being off by a factor of a thousand percent on the cost of his war is a failure of epic proportions. People complain about their grandchildren paying for government mistakes today, but this was the mother of all fiscal mismanagement and only for death, destruction and making the world a more dangerous place. Why anyone would want to minimize that, or compare it to a CBO estimate of health care reform, is incomprehensible.
Yet Obama is still continuing where Bush left off? The US is still in Iraq, and the US is increasing its presence in Afghanistan. Easy to blame all of the initiated portions of the War on Bush, and then Obama gets credit for the easy uninitiated parts? Even when he is just administrating that which has been created in the first place by Bush anyway. Besides which, blaming Bush like that of course makes Obama look that much greater?
handfleisch
deanhills wrote:
handfleisch wrote:
I get your point just fine, but Bush being off by a factor of a thousand percent on the cost of his war is a failure of epic proportions. People complain about their grandchildren paying for government mistakes today, but this was the mother of all fiscal mismanagement and only for death, destruction and making the world a more dangerous place. Why anyone would want to minimize that, or compare it to a CBO estimate of health care reform, is incomprehensible.
Yet Obama is still continuing where Bush left off? The US is still in Iraq, and the US is increasing its presence in Afghanistan. Easy to blame all of the initiated portions of the War on Bush, and then Obama gets credit for the easy uninitiated parts? Even when he is just administrating that which has been created in the first place by Bush anyway. Besides which, blaming Bush like that of course makes Obama look that much greater?

You've completely lost the plot, which given the nonsense-title of this whole topic, is appropriate.
deanhills
handfleisch wrote:
deanhills wrote:
handfleisch wrote:
I get your point just fine, but Bush being off by a factor of a thousand percent on the cost of his war is a failure of epic proportions. People complain about their grandchildren paying for government mistakes today, but this was the mother of all fiscal mismanagement and only for death, destruction and making the world a more dangerous place. Why anyone would want to minimize that, or compare it to a CBO estimate of health care reform, is incomprehensible.
Yet Obama is still continuing where Bush left off? The US is still in Iraq, and the US is increasing its presence in Afghanistan. Easy to blame all of the initiated portions of the War on Bush, and then Obama gets credit for the easy uninitiated parts? Even when he is just administrating that which has been created in the first place by Bush anyway. Besides which, blaming Bush like that of course makes Obama look that much greater?

You've completely lost the plot, which given the nonsense-title of this whole topic, is appropriate.
Perhaps you are right, however your finding may apply to both of us. I don't think though that it is really a nonsense title. I thought it was a very interesting survey. I particularly liked this paragraph of the quote by jmi in the opening posting:
Quote:
Adam Smith described political economy as "a branch of the science of a statesman or legislator." Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.
ocalhoun
handfleisch wrote:
ocalhoun wrote:
handfleisch wrote:

I get your point just fine, but Bush being off by a factor of a thousand percent on the cost of his war is a failure of epic proportions. People complain about their grandchildren paying for government mistakes today, but this was the mother of all fiscal mismanagement and only for death, destruction and making the world a more dangerous place. Why anyone would want to minimize that, or compare it to a CBO estimate of health care reform, is incomprehensible.

All true, but two wrongs don't make a right...
You can't fix fiscal mismanagement with even more fiscal mismanagement...


The two wrongs only exist in your mind. The CBO projection for the health care bill, to bring us closer to minimum standards of decency, was deficit-neutral to deficit-lowering. The cost Bush's of the Iraq war, to kill people, destroy a country and make the world a more dangerous place, is close to a TRILLION dollars, which is 1000% of Bush's (supposedly) projected cost.


The old CBO projection, right? Didn't they revise the projection with a higher cost later on?
Besides that, what of the stimulus and bail-outs?

And remember, two wrongs don't make a right, please don't try to riposte with examples of Bush's mismanagement (again).
Voodoocat
I stand corrected, the Left does understand economics. Their understanding of economics is "tax others, not yourself". A case in point: Massachussetts Senator John Kerry. You would think that the Senator from Massachussetts would be willing to pitch in to help his home state, right? Guess again! When given the choice to register his brand new multi-million dollar (how much healthcare for poor people could that amount of money buy? We will never know.) yacht in Massachusetts and pay high taxes, or register it in Rhode Island and avoid the taxes, he chose RHODE ISLAND!!!!! This move saved John Kerry over $400,000 in taxes. Go figure.

http://bostonherald.com/track/inside_track/view.bg?articleid=1269698


Remember when Democratic Vice President Joe Biden said paying your taxes was your patriotic duty. In that light, what would he say about John Kerry?
Bikerman
*sighs* we could do with an automatic dictionary/insert routine. Then I could program it to insert 'American' before 'left' or 'left wing' and be much happer Smile
The notion that any US politician that I know of could be called 'left' is a constant source of wonder to me....

As for Kerry - he has paid his taxes and like most people chosen to do so efficiently (ie not costing more than he is due to pay). Perfectly normal behaviour methinks. Do you expect 'left wing' politicians to be more altruistic, selfless and generous with their money? Why would that be?
If I advocate a 90% tax on the rich (and pretending I was rich), does that mean I am obligated to pay 90% of my money over if the measure is not adopted? I don't see that at all. You might as well expect a staunch right wing supporter of longer prison sentences to request a longer sentence for themselves when they get busted for some crime or other....not really going to happen methinks.....Personally I prefer my politicians to be as honest/dishonest as I consider myself - which is mostly honest but with some self-interest and an ability to be dishonest when I want to be - in other words a human being like just about everyone else around. I get itchy firsts when politicians start spouting sermons or portraying themselves as super-moral paragons because firstly it is likely to be a lie - which is the worst sort of lie and winds me up - hypocrisy. Secondly I don't want to be governed by puritans...we know where that ends...
Voodoocat
Quote:
Secondly I don't want to be governed by puritans...we know where that ends...


I think I know the answer to that one: America? Very Happy
Bikerman
Voodoocat wrote:
Quote:
Secondly I don't want to be governed by puritans...we know where that ends...


I think I know the answer to that one: America? Very Happy
Well, not what I was thinking of - I was thinking of England circa 1600 when the Puritans were in full swing - and Cromwell was just getting old enough to do a king in. This is the time that England had it's civil war - the King vs the Nobles, 3 rounds, no submissions, no knockout, one very nasty headlock..Oliver Cromwell was a puritan but there were many worse - religiously driven dictators of morals, behaviour and speech who loved nothing more than burning a heretic and piously congratulating themselves on doing their Christian duty. Pompous sanctimonious, hypocritical sadistic bar-stewards - you can keep em.
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