When economics clash with ideology — right and left

Economist Daniel B. Klein and Zogby researcher Zeljka Buturovic have been polling hundreds of Americans to try to test their basic economic literacy. Among other things, they’ve found that college education doesn’t appreciably increase performance on the 17 questions that comprise their test.

Not surprisingly, they also found that liberals tend to answer incorrectly on questions that challenge liberal positions, while conservatives tend to answer incorrectly on questions that challenge conservative positions.

(The 17 questions are reprinted below, with the “right” answers following. I’m not sure I buy all of the Klein/Buturovic definitions of “correct.” For example, does free trade increase unemployment? The “correct” answer is no, but the answer might change if you live in a town with a shuttered textile mill.)

I want to focus on Question 9 in the survey, because it strikes right at the heart of a long-running debate here about how to fairly distribute the tax burden. Here’s the question, with the percentage of people in each ideological category who got it wrong.

table2

Clearly, a single dollar is more important to someone with just 100 of them than it is to someone with 10,000 of them. It has higher marginal utility to that poor person than it does to the rich person. Classical economics teaches that, as does the Biblical parable of the widow’s mite.

However, once you acknowledge that basic fact, you then have to acknowledge both the wisdom and the morality of a progressive income tax. Since conservatives don’t want to do that, they find themselves forced to deny economic reality, as the poll results demonstrate.

– Jay Bookman
———

The Seventeen Questions

1. Restrictions on housing development make housing less affordable.
2. Mandatory licensing of professional services increases the prices of those services.
3. Overall, the standard of living is better today than it was 30 years ago.
4. Rent-control laws lead to housing shortages.
5. A company that has the largest market share is a monopoly.
6. Third-world workers working overseas for American companies are being exploited.
7. Free trade leads to unemployment.
8. Minimum wage laws raise unemployment.
9. A dollar means more to a poor person than it does to a rich person.
10. Making abortion illegal would increase the number of black-market abortions.
11. Legalizing drugs would give more wealth and power to street gangs and organized crime.
12. Drug prohibition fails to reduce people’s access to drugs.
13. Gun-control laws fail to reduce people’s access to guns.
14. By participating in the marketplace in the United States, immigrants reduce the economic well-being of American citizens.
15. When a country goes to war its citizens experience an improvement in economic well-being.
16. When two people complete a voluntary transaction, they both necessarily come away better off.
17. When two people complete a voluntary transaction, it is necessarily the case that everyone else is unaffected by their transaction.

Right answers:

1.) Agree; 2.) Agree; 3.) Agree; 4.) Agree; 5.) Disagree; 6.) Disagree; 7.) Disagree; 8.) Agree; 9.) Agree; 10.) Agree; 11.) Disagree; 12.) Disagree; 13.) Disagree; 14.) Disagree; 15.) Disagree; 16.) Disagree; 17.) Disagree

232 comments Add your comment

Logical Dude

May 18th, 2011
12:46 pm

Quick

May 18th, 2011
12:51 pm

Kamchak

May 18th, 2011
12:53 pm

I’m not sure I buy all of the Klein/Buturovic definitions of “correct.”

No shyt!

No way can these statements be responded to in a binary agree/disagree fashion.

Every one of those statements require several paragraphs to address.

Logical Dude

May 18th, 2011
12:54 pm

Some of the questions are worded oddly, making “agree” or “disagree” hard to pin down without reading the question a couple of times: such as 12 and 13.

12. Drug prohibition fails to reduce people’s access to drugs.
13. Gun-control laws fail to reduce people’s access to guns.

Should these say “Drug Prohibition increases people’s access to drugs” and “Gun control laws increase people’s access to guns”?
Since they are worded slightly differently, they mean something slightly different as well.

So, my issue with this poll, again, is with how some of the questions are worded.

But Question number 9. . . well. . . that’s about as plain speaking of a statement as you can get.
9. A dollar means more to a poor person than it does to a rich person.
It’s hard to get the REAL value of a dollar when that ONE dollar makes the difference of keeping your house or not.

Larry

May 18th, 2011
12:54 pm

Jay,

As long as you are just throwing stuff out here, why not do a piece on the benefits of Obamacare and why queen nancy and king harry are giving away exemptions in their districts. So Obamacare is the law of the land except for the friends of the Democratic leaders who passed it? Maybe nancy finally read the law and now knows what is in it?

Dusty

May 18th, 2011
12:55 pm

Bookman serves trash for lunch.

People who believe Bookman’s “facts” do NOT answer political questions correctly 99.9% of the time. Right, Mr. Ripley???.

Gone to find a better lunch.

Thulsa Doom

May 18th, 2011
12:56 pm

I missed one- number 16. I did not factor in the fact that some people come out worse in a transaction because of stupidity.

(The 17 questions are reprinted below, with the “right” answers following. I’m not sure I buy all of the Klein/Buturovic definitions of “correct.” For example, does free trade increase unemployment? The “correct” answer is no, but the answer might change if you live in a town with a shuttered textile mill.)- Jay

On a micro level perhaps a town may be worse off but they are talking about on a macro level and in macro terms everyone is better off with free trade. For example if a small town loses 200 textile jobs then that small town may be worse off but if foreigners are producing the same product at half the cost- lets say washclothes for example- then consumers everywhere in the country are better off.

Finn McCool

May 18th, 2011
12:57 pm

Wealth Envy!!!!!!!!!!!!!!!

Got that outta the way.

Logical Dude

May 18th, 2011
12:58 pm

Larry,
If those exemptions followed the rules by requesting them, why do you have a problem with the exemptions? It’s not like they are being given away, there is a process to request and get them.
It sounds like those companies in their districts just have an upper hand in the process of requesting these waivers. The “Upper hand” would likely be a strong chamber of commerce letting all the companies know the correct process and procedure for obtaining them. Why aren’t other areas being as ahead of the game? That would be my question, not why some are so far ahead at getting the waivers.

Kamchak

May 18th, 2011
12:58 pm

As long as you are just throwing stuff out here, why not do a piece on the…

Why not go to blogspot.com and start your own discussion if this is so all fired important to you?

Bosch

May 18th, 2011
12:58 pm

I missed four — 4, 7, 12 and 13 — and 12 and 13 I read wrong.

But anywho, wingnuts don’t live in reality– they base their opinions on talking points that have no basis in them — what do you expect Jay?

Thulsa Doom

May 18th, 2011
1:00 pm

No way can these statements be responded to in a binary agree/disagree fashion.- kamchak

Wong. This test is largely correct. Clearly Kammy has never taken an economics course- micro or macro.

Bosch

May 18th, 2011
1:02 pm

“why not do a piece on the benefits of Obamacare and why queen nancy and king harry are giving away exemptions in their districts.”

Your a couple threads late on that — and you have been judged and found wanting.

Yippee

May 18th, 2011
1:02 pm

Racist. Now that has been said along with wealth envy.

clocked out

Atlanta mom

May 18th, 2011
1:03 pm

Logical Dude,
Exactly what I was thinking. Anytime you have a “negative” in a sentence, you never know what the answer really means. “fails to reduce” is a negative.

Jay

May 18th, 2011
1:03 pm

Yes, Thulsa, but try telling that to someone whose job has moved to China and they know that if they ever get a job again, it won’t be for anywhere near the same amount of money.

As Keynes noted, it may be true in the long run. But in the long run we’re all dead.

Finn McCool

May 18th, 2011
1:04 pm

Those are poorly worded questions.

Thulsa Doom

May 18th, 2011
1:04 pm

Bosch,

I dunno Bosch. Most of these test answers seem to affirm conservative’s beliefs in economics. Which of these would a conservative disagree with?

The only one I could see a con disagreeing with is the one on immigration. And that is because several studies show immigration produces a net positive and several studies show it produces a net negative to the economy when all the costs of illegal immigration are factored in such as health care costs, judicial system costs, social services strain such as medicaid and food stamps, education costs, etc.

Overall though historically immigration in a macro sense has been a boon to economies. There is generally not much debate on that point.

Peadawg

May 18th, 2011
1:05 pm

” why not do a piece on” – Because Jay doesn’t get paid to bash his own party. He only bashes Republicans.

“they base their opinions on talking points that have no basis in them” – I’m still waiting for Jay (from the last blog or 2…can’t remember which one) to show some proposals by Pelosi or Obama on the debt ceiling/spending cuts increase. But all Jay posted were a couple of repeated talking points/campaign speeches.

Bosch

May 18th, 2011
1:08 pm

Pea,

How rich of you to bombast the host for posting quotes that show that the Dems are not opposed to spending cuts and call them talking points — oh King of Talking points — might I refer you back to your “OMG, the WAIVERS!!!” from this morning? You didn’t really think that one through huh? It seems now you have company in your ignorance.

Kamchak

May 18th, 2011
1:08 pm

Clearly Kammy has never taken an economics course- micro or macro.

I haven’t taken any courses on food science.

But that doesn’t prevent me from understanding when something is spoiled.

Finn McCool

May 18th, 2011
1:08 pm

if foreigners are producing the same product at half the cost

If a company wants to build it overseas do we charge them an import tax if they want to sell it here?

carlosgvv

May 18th, 2011
1:10 pm

You would have to produce hard, irrefuteable scientific evidence that all the “right” answers here are actually correct. Since that has not been done, this survey actually means nothing in terms of who is and is not literate in economics.

Peadawg

May 18th, 2011
1:12 pm

quotes that show Pelosi and Obama TALKING ABOUT not being opposed to spending cuts and call them talking points – Fixed your typo, Bosch. Again…any proposals? Or just talking? Bueller?

” You didn’t really think that one through huh?” – If this bill is as good as advertised I don’t see the need for waivers. But I regress…

Thulsa Doom

May 18th, 2011
1:14 pm

Jay,

The law of comparative economics says let each country do what it does best and we will all be better off in the long term of course- short run there is pain of course. If China is better off at producing textiles like t shirts, washcloths, towels, etc. then let them do it. We all will be better off paying $1 for a washcloth as opposed to paying $3 for the same washcloth produced by higher paid American workers- we are simply inefficiently subsidizing those jobs as opposed to letting other nations do it more cheaply with everybody eventually benefitting more overall. Same with towels, t-shirts, and a variety of other consumer goods.

What we have to do is continually improve worker productivity and retool the workforce to do higher tech and higher paying jobs. We are also in a mature, more service oriented economy and the old smokestack jobs and textile jobs really aren’t there anymore for the most part. We could bring them back but be prepared to pay substantially more overall for all those products.

Whether we lose jobs to other countries or to technological innovation we are all better off overall. After all is anybody out there upset that the ice man and milk delivery man both lost their jobs due to technology advances in refrigeration? No because overall we are all much better off.

Greg

May 18th, 2011
1:14 pm

I got all 17 right. I guess that comes from being a social liberal and fiscal conservative.

Jay

May 18th, 2011
1:15 pm

Still at that one, Octo-Dawg?

That cloud of black ink isn’t fooling anyone but yourself.

Bosch

May 18th, 2011
1:15 pm

Pea,

So, now I’m to take it that you require proposals for everything now? I’ll remember that.

I don’t think the point this morning about the waivers was the need for them, but that they were some how unique in Pelosi’s district. But since you got your ass handed to you about that, you’ve somehow changed the goal posts. But I digress….

jm

May 18th, 2011
1:16 pm

Yes, a $1 means more to someone who is poor than is wealthy. That said, I’d be shocked if people didn’t treat these questions in a litmus test kind of manner….

Anyway, obviously the answer is that $1 means more to a poor person than someone who is not.

Peadawg

May 18th, 2011
1:19 pm

“Still at that one, Octo-Dawg?

That cloud of black ink isn’t fooling anyone but yourself.” – Talk talk talk talk talk. Still don’t have anything besides talking points, I see. “You should feel proud and good…strong enough to beat the world.”

“But since you got your ass handed to you about that” – OOOOOOOh, ok, Boschy. The fact that 20% of the waivers were in Pelosi’s district probably seems weird to most everyone other than the far left. But see it as you want.

Jay

May 18th, 2011
1:19 pm

And for the record, here’s the explanation for the Pelosi/waivers canard. Really, if this is the best you boys can do for a scandal, Obama must be the cleanest president in history.

http://assets.bizjournals.com/sanfrancisco/blog/2011/05/pelosi-health-waiver-Obamacare.html

(In short, a local San Francisco law conflicts with the federal law, which is why so many local employers had to seek a waiver. As simple as that.)

jm

May 18th, 2011
1:19 pm

We need 2 (or 3 depending on how you look at this) tax rates.

1% for income up to $20,000.
15% for income up to $400,000
20% for all income above.

Elimination of most tax loopholes / deductions, etc.

AmVet

May 18th, 2011
1:22 pm

Thulsa, no need for feigned modesty. I know you didn’t miss any. (grin)

I believe question number three is arguably a trick question. If the question is regarding “cost of living”, the correct answer is disagree…

Thulsa Doom

May 18th, 2011
1:22 pm

As Keynes noted, it may be true in the long run. But in the long run we’re all dead.-Jay

Jay,

When Keynes said that I think he was referencing whether or not the govt should intervene on a massive macro scale with public works projects, etc. to get the economy moving again. I’m not sure he was talking about free trade with other countries and the economic tradeoffs involved such as losing low skilled jobs to China. Its 2 different economics topics.

jm

May 18th, 2011
1:23 pm

I don’t disagree with any of the answers at the bottom, though I think the answer to #16 and 17 is more complex than what should be asked in an average joe survey….

On a simplistic basis, I would have answered differently on #16, only when you take into account asymmetric information does #16 become the correct answer. And most people are not versed in the details and vagaries of asymmetric information.

md

May 18th, 2011
1:24 pm

“However, once you acknowledge that basic fact, you then have to acknowledge both the wisdom and the morality of a progressive income tax. Since conservatives don’t want to do that, they find themselves forced to deny economic reality, as the poll results demonstrate.”

Bogus………it’s a much bigger equation than just 100 vs 10,000………..why?, is also part of the equation………………..there are reasons folks end up with one vs the other……and those reasons should be factored in………….

Peadawg

May 18th, 2011
1:24 pm

From Jay’s article:
“The waivers that are granted for one-year periods are intended to protect employees from suffering any reduction in coverage because of suddenly increased premiums”

I thought this bill was going to help lower premiums? Oops! Guess not…so they need a waiver.

Dave R.

May 18th, 2011
1:24 pm

The money quote in Daniel Klein’s article:

“The left flunks Econ 101.”

You just can’t make this stuff up! :lol:

http://online.wsj.com/article/SB10001424052748703561604575282190930932412.html

Bosch

May 18th, 2011
1:24 pm

Peadawg,

So what proposals has the GOP presented for spending cuts? The only cuts I know of is the ones to the big three — which people are rejecting. So where is his compromise? Do you think he’s even asked Pelosi to sit down and talk? She’s obviously expressed her willingness to do so, so why haven’t they? As you know, she isn’t the Speaker anymore.

I think it’s because it’s much easier for Boehner just to SAY the Democrats don’t want to cut spending, when they have indicated they will — than it is to actually do so themselves.

jm

May 18th, 2011
1:25 pm

“a local San Francisco law conflicts with the federal law”

So local law trumps Federal law? hmmmmmmm I seem to remember this coming up in abortion, immigration, blah blah blah

Joe Mama

May 18th, 2011
1:26 pm

Mr. Doom — “The law of comparative economics says let each country do what it does best and we will all be better off in the long term of course- short run there is pain of course. If China is better off at producing textiles like t shirts, washcloths, towels, etc. then let them do it. We all will be better off paying $1 for a washcloth as opposed to paying $3 for the same washcloth produced by higher paid American workers- we are simply inefficiently subsidizing those jobs as opposed to letting other nations do it more cheaply with everybody eventually benefitting more overall. Same with towels, t-shirts, and a variety of other consumer goods.”

Having access to goods produced more cheaply and therefore costing the consumer less is not always necessarily a good thing. While lower prices are preferable, they don’t do a lot of good when jobs are scarce and the currency is weak. As buying power is eroded by those twin issues, new jobs have to be created at an increasing rate both to employ new workers coming into the labor force and to reemploy workers whose jobs have gone to cheaper locales.

“What we have to do is continually improve worker productivity and retool the workforce to do higher tech and higher paying jobs.”

That hasn’t happened here, and anyone who works in IT will tell you about it. The lower-paying production and manufacturing jobs left, followed by the skilled production and manufacturing jobs, and then the highly-skilled tech jobs left, too. A *lot* of companies have outsourced IT work to India, Sri Lanka and other places. Even Uruguay is trying to position itself as an offshore IT center.

“We are also in a mature, more service oriented economy and the old smokestack jobs and textile jobs really aren’t there anymore for the most part. We could bring them back but be prepared to pay substantially more overall for all those products.”

Agreed. But there are no jobs waiting in the wings to replace them. Many liberals called for additional funding and investment to incubate green and alternative energy ventures, but y’all don’t like that.

“Whether we lose jobs to other countries or to technological innovation we are all better off overall.”

I know a LOT of displaced IT workers who would like to have a word with you in private about that.

Dave R.

May 18th, 2011
1:26 pm

“(In short, a local San Francisco law conflicts with the federal law, which is why so many local employers had to seek a waiver. As simple as that.)”

What’s this?

Is Jay Bookman becoming a “tenther”? :shock: and :lol:

jm

May 18th, 2011
1:26 pm

RE Jay’s 1:19

I’m glad if GA law says Obamacare is illegal, then our whole state can get a waiver

jm

May 18th, 2011
1:27 pm

Jay, RE the new Blogmonster post sequencing algorithm. It appears to be trying to put posts in proximity to the last post the poster was reading prior to posting, presumably in an effort to improve the proximity of responses.

However, it makes things probably more confusing. After you post something, you then need to go read posts before yours as well as after. Not to mention some of the “post-jumping” that occurs because of clock timing, etc.

Just some feedback.

Joe Mama

May 18th, 2011
1:30 pm

jm — “I’m glad if GA law says Obamacare is illegal, then our whole state can get a waiver”

It has been a provision of the law since its proposal that states could opt out by simply creating their own exchange.

Given that provision, one wonders why some states and their lawmakers are so up in arms about something they could easily address THEMSELVES simply by setting up THEIR OWN system to provide broader health care coverage to their citizens.

Thulsa Doom

May 18th, 2011
1:34 pm

AmVet

May 18th, 2011
1:22 pm

Thulsa, no need for feigned modesty. I know you didn’t miss any. (grin)

I believe question number three is arguably a trick question. If the question is regarding “cost of living”, the correct answer is disagree…

AmVet,

I am very surprised that you or anyone for that matter thinks that on question 3. In terms of material wealth overall we are all substantially far better off. Think of the products and services you have nowadays compared to 30 years ago? 30 years ago- no internet and if you had a computer it was large, clunky, and slow. Today you can buy a laptop at Walmart for $300 or less. Communications- today the poorest of poor have unlimited cell phone plans at reasonable rates. Did they even have cell phones in 1980? If they did they were the large box phones with 40 cents a minute charges. Those are but 2 examples- I could go on all day long about quality of life improvements. Here is another comment about just how good poor people have it here in the U.S. versus people everywhere else. Interesting stuff.

Imagine you are an unborn spirit whom God has condemned to a life of poverty but has permitted to choose the nation in which to live. I’m betting that most any such condemned unborn spirit would choose the United States. Why? What has historically been defined as poverty, nationally or internationally, no longer exists in the U.S. Let’s look at it.
According to the U.S. Department of Health and Human Services, the 2009 poverty guideline was $22,000 for an urban four-person family. In 2009, having income less than that, 15 percent or 40 million Americans were classified as poor, but there’s something unique about those “poor” people not seen anywhere else in the world. Robert Rector, researcher at the Heritage Foundation, presents data collected from several government sources in a report titled “How Poor Are America’s Poor? Examining the ‘Plague’ of Poverty in America” (8/27/2007):

– Forty-three percent of all poor households actually own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage and a porch or patio.
– Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.
– Only 6 percent of poor households are overcrowded; two-thirds have more than two rooms per person.
– The typical poor American has more living space than the average individual living in Paris, London, Vienna, Athens and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

– Nearly three-quarters of poor households own a car; 31 percent own two or more cars.
– Ninety-seven percent of poor households have a color television; over half own two or more color televisions.
– Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.
– Eighty-nine percent own microwave ovens, more than half have a stereo, and a more than a third have an automatic dishwasher.
What’s defined as poverty is misleading in another way. Official poverty measures count just family’s cash income. It ignores additional sources of support such as the earned-income tax credit, which is a cash rebate to low-income workers; it ignores Medicaid, housing allowances, food stamps and other federal and local government subsidies to the poor. According to a report by American Enterprise Institute scholar Nicholas Eberstadt, titled “Poor Statistics,” “In 2006, according to the annual Bureau of Labor Statistics Consumer Expenditure Survey, reported purchases by the poorest fifth of American households were more than twice as high as reported incomes.” That additional money might represent earnings from unreported employment, illegal activities and unreported financial assistance. A proper measure of well-being is what a person consumes rather than his income. A huge gap has emerged between income and consumption at lower income levels.

md

May 18th, 2011
1:34 pm

“Given that provision, one wonders why some states and their lawmakers are so up in arms about something they could easily address THEMSELVES simply by setting up THEIR OWN system to provide broader health care coverage to their citizens.”

Maybe it’s not quite so easy considering many of them are broke………………

@@

May 18th, 2011
1:35 pm

For someone who doesn’t know squat about economics, three wrong isn’t bad.

A lot of the questions discount the determination of “the individual”. I never underestimate THAT determination.

Jay

May 18th, 2011
1:37 pm

Dave R., that initial work by Klein was so egregiously one-sided — i.e., questions 1-8 were clearly designed to produce the anti-liberal outcome — that he was shamed into adding questions 9-17 to test conservatives as well.

If you had taken the time to click through to my link, you would have seen his abject confession:

“Most of those eight questions specifically challenged leftist positions and/or reassured conservative and/or libertarian positions, while none had a clear slant against conservatives and/or libertarians.”

He now concedes:

“… the new results vitiated prior evidence of the left being worse. Now, all groups did poorly, with each group tending to do relatively poorly on the questions challenging its positions. In this paper we report the results of the new survey and offer some explanations about why we thought—wrongly, as it turns out—that the prior evidence on ideology was telling.”

So how do you like your hero now?

In short, and contrary to your claim, yes you CAN make this stuff up, and he did.

Peadawg

May 18th, 2011
1:37 pm

“So what proposals has the GOP presented for spending cuts? The only cuts I know of is the ones to the big three — which people are rejecting. ” – Seems like you answered your own question there, Bosch.

Joe Mama

May 18th, 2011
1:37 pm

md — “Maybe it’s not quite so easy considering many of them are broke………………”

I’m not seeing how that’s the Federal government’s fault.

jm

May 18th, 2011
1:41 pm

md 1:34 – it has more to do with the lack of flexibility the Feds dictate within the exchange creation. Creating something like UT has is illegal….. which is problematic to say the least.

The legislation provides states with the funds to “set up” the exchanges, although HC subsidies are a different and more onerous issue.

Don't Tread

May 18th, 2011
1:41 pm

Wow…loaded questions here.

Exactly how do questions 10 – 13 relate to economics?

The answer to Question 3 heavily depends on what is meant by “standard of living”. If we’re talking material possessions, sure. If you define “standard of living” to include things other than material possessions, then who knows.

Question 14 is heavily dependent on whether “immigrants” means legal or illegal.

DebbieDoRight

May 18th, 2011
1:42 pm

Doom: but if foreigners are producing the same product at half the cost- lets say washclothes for example- then consumers everywhere in the country are better off.

Unless they don’t have a job, (because of no work), to pay for the said washcloths…..

md

May 18th, 2011
1:49 pm

“I’m not seeing how that’s the Federal government’s fault.”

Well…..it’s the feds that are dictating the terms……..

And the added cost of the program implemented by the feds will add to the problems the States already can’t afford. And before anyone posts that the fed program reimburses the States, that doesn’t cover the administrative costs of the States……which for many is a big number…..

jm

May 18th, 2011
1:50 pm

blog hiccup?

jm

May 18th, 2011
1:50 pm

Of note. Sam Walton might disagree with the economists’ assertion…. :)

jm

May 18th, 2011
1:51 pm

Jay, so local laws trump Federal Laws? How’s this work again?

jm

May 18th, 2011
1:53 pm

I think Jay must’ve realized he had just punched a tar baby.

Mighty Righty

May 18th, 2011
1:54 pm

It’s a reading comprehension test. Once you understand the question, the nnswer is apparent. I missed two.

jm

May 18th, 2011
1:57 pm

Mick 1:22 (downstairs) – I’m not inclined to buy a house given the current economy, the insurance issue (as you alluded to), and given I’m young enough that flat as a pancake FL is going to be an early casualty of global warming, hurricanes, etc. Just not worth it.

Owning a mountain house, ok. Beachfront? nope

Plus, renting a house is also really cheap.

Jay

May 18th, 2011
1:58 pm

No, jm. Nothing I have written can be twisted into saying such a thing. I said the local businesses sought the waiver so they wouldn’t have to violate local law by abiding by federal law.

In other words, the SF waivers were not evidence of corruption or bias, it was not a scandal as many on the right have attempted so valiantly but vainly to claim.

But I do have to admire that set of goalposts you got there, mounted on wheels and powered by a 365 hp V-8.

Joe Mama

May 18th, 2011
1:58 pm

md — “Well…..it’s the feds that are dictating the terms……..”

And it’s the feds that are allowing states to opt out by setting up THEIR OWN health care exchanges. Again, I’m not seeing how the failure of any given state to do that is a Federal failing. It looks much more like a state failing to me. Maybe you could explain your position to me a little more and help me see things your way.

“And the added cost of the program implemented by the feds will add to the problems the States already can’t afford.”

I don’t see how that happens to any given state if they set up their *own* exchange. Again, I think I need you to explain your thinking on this a little better, because I’m still not seeing what’s preventing states from doing this themselves.

“And before anyone posts that the fed program reimburses the States, that doesn’t cover the administrative costs of the States……which for many is a big number…..”

Can you cite some numbers, please? In all the court cases being brought against the federal system, I haven’t heard any specific numbers being cited. Maybe you could help fill in that blank for me, please?

Moderate Line

May 18th, 2011
1:58 pm

(The 17 questions are reprinted below, with the “right” answers following. I’m not sure I buy all of the Klein/Buturovic definitions of “correct.” For example, does free trade increase unemployment? The “correct” answer is no, but the answer might change if you live in a town with a shuttered textile mill.)
+++++
They are looking at from the stand point of all else being equal.

Dave R.

May 18th, 2011
1:59 pm

Jay, Jay, Jay. The new data doesn’t negate Klein’s original money quote about the left failing Econ 101.

Nor does adding new questions challenging the right’s perception constitute “making things up”.

Hence, the entirety of his updated conclusion: “However, the new test consisting of all 17 questions yielded results that vitiated prior evidence of the left being worse. Now, all groups do poorly, with each group tending to do relatively poorly on the questions challenging its positions.”

Therefore, the left may not, in fact, be worse. But they STILL fail Econ 101.

Moderate Line

May 18th, 2011
1:59 pm

I got all right but 2. One would indicate me as a liberal and one a conservative.

Joe Mama

May 18th, 2011
2:01 pm

Dave R. — “Therefore, the left may not, in fact, be worse. But they STILL fail Econ 101.”

Translation: ‘See? I’m no more stupid than all a’ *y’all!’* :D

jm

May 18th, 2011
2:02 pm

“But I do have to admire that set of goalposts you got there, mounted on wheels and powered by a 365 hp V-8.”

Them thar’s Louisiana goalposts. :)

Well, the point is, the Gov’t now has the option, at its discretion, to let local law overrule Federal law. How you going to feel about this when a Republican is in the White House?

(I’ve never asserted any laws are being broken in this instance, but the hypocrisy of the policy is unbelievable)

danjonglee

May 18th, 2011
2:03 pm

Regarding waivers, some people are more equal than others under the law…….

Thulsa Doom

May 18th, 2011
2:04 pm

Having access to goods produced more cheaply and therefore costing the consumer less is not always necessarily a good thing. While lower prices are preferable, they don’t do a lot of good when jobs are scarce and the currency is weak. As buying power is eroded by those twin issues, new jobs have to be created at an increasing rate both to employ new workers coming into the labor force and to reemploy workers whose jobs have gone to cheaper locales.

Agreed. But there are no jobs waiting in the wings to replace them. Many liberals called for additional funding and investment to incubate green and alternative energy ventures, but y’all don’t like that.- Joe Mama

Joe,

We’ve been subsidizing and funding green jobs and I see little tangible evidence of success. And if a green job can’t sustain itself without being immensely subsidized by us then what good is it worth? For example there was a news article about a solar panel company in Mass. that got about 40 million if I remember correctly to produce solar panels. The company couldn’t come anywhere near making a profit so they up and moved to China and took 250 jobs with them along with 40 million of taxpayer money. You may remember that story from a couple months ago in the news. Solar and wind power have been around a lot longer than you think. To date they show little if any promise of success on a mass scale. Unless we massively subsidize them which to me defeats the entire purpose.

I know a LOT of displaced IT workers who would like to have a word with you in private about that.- Joe Mama

Joe,

Rest assured that if they saw me in person I don’t think they would want that private word with me. But like I just said I hate it because I have personally seen firsthand several friends lose good IT jobs. What is your solution please?

That hasn’t happened here, and anyone who works in IT will tell you about it. The lower-paying production and manufacturing jobs left, followed by the skilled production and manufacturing jobs, and then the highly-skilled tech jobs left, too. A *lot* of companies have outsourced IT work to India, Sri Lanka and other places. Even Uruguay is trying to position itself as an offshore IT center.- Joe Mama

Joe,

Disagree partially. Last I read is that we have had substantial gains in worker productivity. On the other points you are correct on the IT industry. My best friend is a systems analist(Yes, I call him an analyst) in Bham and like clockwork his company would bring in 5-10 Indians every several months to train in the corp office. Then they would return to India and 5-10 of their U.S. programmers would be laid off. Meanwhile the companies stock soars from improved productivity of paying Indians $7 an hour to program and laying off 50k a year U.S. programmers. Its enough to tick you off but what are we to do? I sympathize with my friends who were laid off but can we tell these companies that they can’t do this? Can we make a law against it? Its a tough thing and frankly a question that worries me about our high tech jobs but there is no easy answer. What would you suggest?

Hi Joe Mama,

I disagree. Having low cost quality goods is rarely a bad thing. How can it possibly be a bad thing to have low cost, quality goods? Or higher priced goods a good thing? Lower cost goods aren’t a good thing when the economy is weak and jobs are scarce? Huh? Come again. Unemployed workers aren’t helped with lower cost goods?

As buying power is eroded by those twin issues, new jobs have to be created at an increasing rate both to employ new workers coming into the labor force and to reemploy workers whose jobs have gone to cheaper locales.- Joe mama

Joe, We can all agree on that about the need to produce more jobs. But what does that have to do with what we were talking about? The central point remains. In the short term there will be pain for selected workers whose jobs die off but in the longer run we are all better off.

On a macro scale if we imposed tariffs for example to protect jobs from overseas competition the economy will suffer overall. Do you dispute this point? Do we need to look at economic history and see what’s happened when we imposed tariffs to protect jobs? Any economics book will tell you that if all of our economies go to tariffs to protect local jobs then we are all doomed. You are too smart not to know this. They only reason we should have tariffs are to protect nascent, new industries who need a few years to get going.

Jay

May 18th, 2011
2:07 pm

“The new data doesn’t negate Klein’s original money quote about the left failing Econ 101.”

Actually, Dave R, Klein himself says the new data DO negate his earlier claim.

In fact, he says so quite explicitly, as you know. And given the professional shame and embarrassment that such an admission creates in the academic world, I don’t think he said so easily. He did it anyway, because it was the right thing to do.

Maybe he’s a model you should follow Dave R? When all the evidence is arrayed against you, admit you were wrong and move on?

Just a thought.

stands for decibels

May 18th, 2011
2:08 pm

Clearly, a single dollar is more important to someone with just 100 of them than it is to someone with 10,000 of them. It has higher marginal utility to that poor person than it does to the rich person.

it really is pretty remarkable that ~41% of self IDing conservatives can’t bring themselves to acknowledge something as obvious as that, isn’t it?

I honestly thought somewhat better of them. That’ll show me to be a such a cockeyed optimist.

jm

May 18th, 2011
2:09 pm

The US of Insanity is enough to make me want to buy a boat and go sailing as soon as I’ve got enough stash. Or keep shooting for a job abroad.

Until such time as the whole mess collapses and the policies of the government return to a semblance of sanity.

jm

May 18th, 2011
2:09 pm

“me to be a such a cockeyed optimist.”

an inflated sense of self, SFD has….

Peadawg

May 18th, 2011
2:10 pm

“When all the evidence is arrayed against you, admit you were wrong and move on?” – Like you did when it comes to Pelosi and Obama’s non-talking point proposals? Oh wait…you called me ‘octo-dawg’ instead. That’s right…

Thulsa Doom

May 18th, 2011
2:11 pm

DebbieDoRight

May 18th, 2011
1:42 pm

Doom: but if foreigners are producing the same product at half the cost- lets say washclothes for example- then consumers everywhere in the country are better off.

Unless they don’t have a job, (because of no work), to pay for the said washcloths…..

Debbiedoright,

First- Study the law of comparative economics and get back to me.

Secondly, what would be your solution? High tariffs to protect those jobs such as textile jobs? If so then please study some economic history as to what happens when nation’s impose tariffs. Then get back to me when you see what the effects were.

I have a degree in economics including several masters level classes in labor economics, comparative economics, econometrics, etc. I’ve forgotten a helluva lot of stuff but I still remember the basic principles.

Anachronism

May 18th, 2011
2:12 pm

I think this just shows the bias and ignorance of most americans. Of course, this doesn’t stop people from expressing their bias and ignorance.

Dave R.

May 18th, 2011
2:12 pm

“Actually, Dave R, Klein himself says the new data DO negate his earlier claim.”

Then Klein understands the English language as poorly as you do some days, Jay.

Saying that both the right and the left fail does not negate the left failing.

Maybe you missed that day when they taught logic. ;)

jm

May 18th, 2011
2:13 pm

Thulsa Doom 2:11 – drop the hammer!! yeah!

Redneck Convert (R--and proud of it)

May 18th, 2011
2:21 pm

Well, I never was any good at tests. Which is why my senior year was the 5th grade. Dang multiplying table!

Anyway, I don’t deny economic reality, I just think sometimes we should bend it a teeny-tiny bit. I still say we need to get rid of all the welfare for a bunch of bums and geezers.

Just keep your hands off of my Medicare. The economic reality is, I got mine, and if you ain’t got yours it’s because you made some Bad Decisions and need to take Personal Responsibility. I ain’t your Mommy and Daddy.

jm

May 18th, 2011
2:27 pm

Red 2:21 spoken like a true liberal

stands for decibels

May 18th, 2011
2:28 pm

Filed under “yeah, that’s gonna happen”: McDonald’s Under Pressure to Fire Ronald

“We are committed to responsible advertising and take our communications to children very seriously,” McDonald’s said in a statement. “We understand the importance of children’s health and nutrition, and are committed to being part of the dialogue and solution. We serve high quality food, and our Happy Meals offer choice and variety in portions just for kids. Parents tell us they appreciate our Happy Meal choices.”

They tell us so! really! We’re just doing what parents want!

AmVet

May 18th, 2011
2:31 pm

jm

May 18th, 2011
2:32 pm

AmVet 2:31 – those are funny. You gotta love capitalism. Shirt would be unavailable in any socialist / communist economy

Joe Mama

May 18th, 2011
2:33 pm

Doom — “We’ve been subsidizing and funding green jobs and I see little tangible evidence of success.”

Subsidies and funding have been quite low, especially compared to the subsidies and funding other energy players receive. Besides, given that it takes at least 10 years from approval for an oil well to be drilled for the first tank of gas from that well to be dispensed at the point of sale, I think you may have an unreasonable expectation of the speed at which green jobs should grow. If you’re patient with petroleum, then I think it would be fair to be likewise patient with the green energy industry.

“And if a green job can’t sustain itself without being immensely subsidized by us then what good is it worth?”

Immature industries grow irregularly at first, and I think you already know this. Unprofitable ventures get weeded out by both government funding agencies and by venture capitalists. Sometimes, money gets spent without a return; this is true of both publicly and privately funded ventures. Quite frankly, we need to take the long view of this and commit to incubating these industries.

Otherwise, I’m all ears regarding the highly-skilled and highly-paid jobs that you apparently think are waiting in the wings. Perhaps you could tell me what they are and where they could be found, because I don’t see them anywhere else.

“For example there was a news article about a solar panel company in Mass. that got about 40 million if I remember correctly to produce solar panels. The company couldn’t come anywhere near making a profit so they up and moved to China and took 250 jobs with them along with 40 million of taxpayer money. You may remember that story from a couple months ago in the news.

I do. And to use your comment from an earlier thread, you’re just citing one negative example. That doesn’t negate the promise that this industry shows.

“Solar and wind power have been around a lot longer than you think.”

Not on an industrial scale, they haven’t.

“To date they show little if any promise of success on a mass scale.”

Well, that’s not true at all. There’s a solar plant going up in N GA, and a large one underway in AZ. The photovoltaic efficiency of solar cells has grown significantly in the last 3-5 years, which means much more energy out of the same size array. There’s also the growing notion of distributed generation, which means that many generation plants (think every other home in a town with a solar array on the roof) can have their production pooled for the use of an entire community or region. The same is possible of wind generators.

“Unless we massively subsidize them which to me defeats the entire purpose.”

I’d be more sympathetic to your position if you hadn’t recently argued so forcefully for the preservation of tax breaks and abatements for the petroleum industry. Given your position on that, I find your position on this to be ludicrous and untenable at best.

Doom — “But like I just said I hate it because I have personally seen firsthand several friends lose good IT jobs. What is your solution please?”

For starters, tighten up on H1-B visa abuse. If you want, I can detail the hijinks and manipulation of that system that goes on to the detriment of the American IT worker. You may also get an earful about that from your friends.

Doom — “Disagree partially. Last I read is that we have had substantial gains in worker productivity.”

And no concomitant gain in *employment* or in *wages.* That means that the same number of employees are working harder and generating higher earnings for their employers, yet the employers are not increasing wages or hiring more employees. So employees (current and prospective) see no benefit from that state of affairs.

“On the other points you are correct on the IT industry. My best friend is a systems analist(Yes, I call him an analyst) in Bham and like clockwork his company would bring in 5-10 Indians every several months to train in the corp office. Then they would return to India and 5-10 of their U.S. programmers would be laid off. Meanwhile the companies stock soars from improved productivity of paying Indians $7 an hour to program and laying off 50k a year U.S. programmers. Its enough to tick you off but what are we to do? I sympathize with my friends who were laid off but can we tell these companies that they can’t do this? Can we make a law against it? Its a tough thing and frankly a question that worries me about our high tech jobs but there is no easy answer. What would you suggest?”

Incentivize the creation and sustainment of American jobs and disincent/penalize the offshoring of IT positions. I have no problem incenting employers to create and RETAIN jobs right here in the US so that Americans stay on the job, but I *do* have a big problem with the continued offshoring of the high-tech jobs that are supposedly going to save us. Those jobs can’t help us if they go elsewhere.

Offer tax incentives for creation and retention of IT jobs in the US and its territories, and impose penalties on employers for each job offshored. If there’s any question about whether or not a given job got offshored, then simply fall back on headcount in the US and overseas. If headcount went up overseas and declined in the US, hit them with a penalty.

A corollary policy could be to institute an overseas revenue tax repatriation holiday. Give US employers a tax abatement or holiday on overseas earnings that are brought back to and invested in US operations. Again, I don’t have a problem incenting employers to hire and retain American workers, but if they’re sending jobs overseas, they’re not helping us — so we shouldn’t be rewarding them for that behavior.

Doom — “I disagree. Having low cost quality goods is rarely a bad thing. How can it possibly be a bad thing to have low cost, quality goods?”

If the tradeoff is higher unemployment and poverty, then I don’t see that as a positive.

“Or higher priced goods a good thing?”

I’ll pay more to get American products. I am very interested in where my consumables and durable goods come from, and I buy American wherever possible.

“Lower cost goods aren’t a good thing when the economy is weak and jobs are scarce? Huh? Come again.”

I think there’s a linkage between those lower cost goods and increased unemployment. I’d rather pay more for my goods if it means more Americans are going to be on the job. Besides, employed Americans are tax-paying Americans, and I think that you and I can agree that more employed Americans paying more taxes into the public till is a desirable thing. Unemployed people are an economic and societal drag, and we need to get them back to WORK.

“Unemployed workers aren’t helped with lower cost goods?”

Unemployed workers are helped MORE by getting them back to work. I am willing to pay more for American-made goods.

“Joe, We can all agree on that about the need to produce more jobs. But what does that have to do with what we were talking about? The central point remains. In the short term there will be pain for selected workers whose jobs die off but in the longer run we are all better off.”

We’re not better off if those highly-paid jobs don’t materialize. I’m talking about incubating some (green energy) and incenting the creation and retention of others (IT jobs), but I haven’t yet heard you detail where you think those jobs are coming from if not in those sectors.

“On a macro scale if we imposed tariffs for example to protect jobs from overseas competition the economy will suffer overall. Do you dispute this point? Do we need to look at economic history and see what’s happened when we imposed tariffs to protect jobs? Any economics book will tell you that if all of our economies go to tariffs to protect local jobs then we are all doomed. You are too smart not to know this. They only reason we should have tariffs are to protect nascent, new industries who need a few years to get going.”

Mr. Doom — did you see me mention tariffs ANYWHERE in this thread? :(

You have a tendency to leap to unwarranted conclusions and to put words in people’s mouths. Please do not fall prey to that tendency again today.

Paul

May 18th, 2011
2:33 pm

Kamchak and others

“No way can these statements be responded to in a binary agree/disagree fashion.”

Well that’s how university students in an intro econ course get tested. Jay’s example illustrates the dilemma many face in such concepts: the micro is a subset of the macro, while the principle is macro.

Most of those questions are classic supply/demand. What this article illustrates so well is that when social/ideological nouns are used to illustrate the concepts, people stop thinking in economic terms.

Thulsa Doom

May 18th, 2011
2:34 pm

stands for decibels,

Last time I checked McDonald’s didn’t have policemen forcibly directing parents into the McDonald’s drive through. If the parents are too damn lazy to cook a nutritious home meal, too ignorant to realize McDonald’s 2-3 times a week isn’t healthy for their kids, or to stupid to look up the nutritional content of a big mac then that’s on them. I can look up the nutritional content of a big mac using my droid or my laptop. This isn’t about McDonalds. This is about lazy, worthless parents and the people who excuse them of their lack of parenting skills and would rather place blame on some mega corporation.

Paul

May 18th, 2011
2:35 pm

Don’t Tread

“Exactly how do questions 10 – 13 relate to economics? ”

They all concern supply and demand. 10&11 deal with introducing or eliminating an artificial constraint. 12&13 have the same structure.

Joe Cool~"PRESIDENT Obama" Tells Birthers,"Thanks For Playing BI+CHES"

May 18th, 2011
2:37 pm

OFF Topic:

Santorum: McCain doesn’t understand interrogation:
WASHINGTON – Former Sen. Rick Santorum said Tuesday that Sen. John McCain, who spent 5 1/2 years enduring brutal treatment at the hands of his North Vietnamese captors, doesn’t know how effective waterboarding and other harsh interrogation techniques can be.

SMDH….lol

Peadawg

May 18th, 2011
2:38 pm

Thulsa Doom @ 2:34

Testify!!!!!!!!!!!!!

willie lynch

May 18th, 2011
2:41 pm

Thulsa Doom

Whether we lose jobs to other countries or to technological innovation we are all better off overall.
—————————-

Your assumption is we lose 1500 textile jobs we replace them with tech jobs at an equal number. What if the tech jobs don’t require 1500 workers? I may be wrong but the more technologically advanced we become the less likely we are to need the same number of humans in the workforce.

Kamchak

May 18th, 2011
2:41 pm

Well that’s how university students in an intro econ course get tested.

Are these the same courses that have been churning out cookie cutter phlogiston economists for the past thirty some odd years?

Paul

May 18th, 2011
2:42 pm

sfd 2:08

That one just blew me away. The percentage of cons. It seems so elementary that regardless of ideology, one would have to at least acknowledge the concept.

Jay referenced the widow’s mite.

Do half of cons flunk Sunday School?

jm

May 18th, 2011
2:42 pm

Jay, I’m surprised you’re still kicking the dead Gingrich horse. I know you’ve been whacking away at Romney and (less recently) Palin. Surely seems time to drop the hammer on Huntsman or Daniels, or hammer some more on Romney….

Yahtzee

May 18th, 2011
2:43 pm

Wow, Jay! You are really opening eyes on important matters!

Anyways, in real news.. medical costs are expected to rise 8.5% in 2012.

Thank you ObamaCare!

http://thehill.com/blogs/healthwatch/health-insurance/161867-report-medical-costs-to-rise-85-percent-in-2012-in-small-part-due-to-healthcare-law

Paul

May 18th, 2011
2:44 pm

Looks like drugs and guns (12&13) had the highest percentage of across the board wrong answers. No surprises there.

jm

May 18th, 2011
2:44 pm

Paul 2:42 – why don’t you go read the rest of the survey. Libs dead equally poorly on some obvious questions.

Paul

May 18th, 2011
2:45 pm

jm 2:44
to which of my posts were you referring?

Paul

May 18th, 2011
2:48 pm

jm 2:44

Ah, it seems you were referring to my observation on stands for decibels’ post.

Yes, “why don’t you read the rest of the survey’ seems like a most reasonable observation in such a case………

Paul

May 18th, 2011
2:50 pm

Kamchak

No, those are the courses that encourage students to understand concepts.