Failing Econ 101

If I had any doubts whatsoever about the pitiful state of economic literacy in this country, yesterday provided a perfect example. I was reviewing a paper submitted by a student to one of our faculty members. He had given her a poor grade, and she argued that she deserved higher marks. I am the Program Director, so grade appeals come to me. The paper was filled–as all too many are these days–with grammatical errors, but what really struck me was the student’s answer to the question: how can government encourage more citizens to become involved in policy deliberations? The response? By reducing taxes and providing more government services.

I rest my case. (Excuse me while I go slit my wrists….)

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Fall Housecleaning Time

This is the weekend I have scheduled for my fall housecleaning. It always makes me feel good go through the pantry, closets and other nooks and crannies that I can easily ignore during most of the year-those places that only get “the treatment” during the spring and fall cleaning rituals.

Which reminds me that November is coming, and with it, the opportunity to do some political housecleaning as well.

I thought about our desperate need for such civic housecleaning when I heard a caller to a radio show explain that the President’s jobs plan was ridiculous–not because it wouldn’t work, or was otherwise ill-conceived–but because we shouldn’t be spending money we don’t have. The nation, he proclaimed, should do what individuals do, and live within our means. (Ok, you can stop laughing now and read on.) The host, to his credit, asked the caller if he had a mortgage? A car payment? “Well, that’s different,” was the response.

Exactly. In fact, in the wake of the President’s speech (hell, for the past several years!) we have been treated to the antics of assorted elected buffoons who not only don’t have answers to our problems, but don’t know what the questions are.

The question is not whether we should spend money on Program A.  That’s a question that cannot be answered without several preliminary inquiries. Is this an investment–our house, the country’s infrastructure–or is it an operating expense, like rent or highway maintenance? As any businessperson will tell you, you borrow for the former but not the latter. What are the consequences of spending for the proposed purpose? What are the consequences of not spending for it? And if the benefits of spending outweigh the benefits of not doing so , will Proposal A achieve the desired results?

It’s bad enough that large numbers of otherwise reasonable citizens don’t understand that, but it is truly appalling when our elected officials don’t grasp the most basic elements of public or economic policy. (And yes, Mike Pence, I’m looking at you. And a lot of others.)

It’s time to do some housecleaning. And that housecleaning actually should be modeled on the process we use in our own homes. Housecleaning doesn’t mean a wholesale “throw the bums out” catharsis. When we clean a closet or drawer at home, we sort: we throw out the stuff that is no longer useful or wearable–the stuff that’s taking up space we need for better, more useful stuff. And that’s what we need to do for the next several Novembers. We need to get rid of the lunatics and egomaniacs, obviously, but we also need to retire the nice-enough people who are simply in way over their heads (yes, I’m looking at you, Mayor Ballard). But voters of both parties also need to understand that whatever the wingnut of the day may be telling us, we don’t throw someone out simply because we disagree with them. (Yes, I’m looking at you, Richard Mourdock.) There are plenty of people who will engage in thoughtful and informed analysis and simply reach different conclusions. We should opt for competence and intellectual honesty, not uniformity. To stretch my analogy past the breaking point, we need to throw out those high fashion shoes that have killed your feet ever since you bought them, and keep the comfortable ones that aren’t quite so flashy and  “in.”

Take it from someone who is in the middle of fall housecleaning.

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Vote–If You Can

Voter ID laws, as we all know, are a method to prevent voter fraud– in advance, apparently, since there is little or no evidence that in-person vote fraud has ever been a problem. Actually, as any sentient being knows, it is a way to keep “those people” from voting–“those people” being folks more likely to vote for the other party’s candidates.

Wisconsin has a voter ID law, which (like that in Indiana)requires their BMV to issue free ID’s to those who would otherwise be unconstitutionally disenfranchised. A minor scandal erupted when an email from a state official emerged, instructing BMV workers not to issue ID’s unless specifically asked, and not to inform customers that they were available. When an outraged emloyee urged his coworkers to “spread the word” among their acquaintances that people who needed them should ask, he was fired.

This was all about preventing fraud, of course. And I have some bargain beachfront property to sell you…

Of course, these efforts to make voting more inconvenient or difficult–and thus less likely–aren’t limited to Voter ID laws. Here in Marion County, where the incumbent Mayor needs all the help he can get to stay in office, Republicans have adamantly refused to approve satellite voting sites. They cite the expense, an excuse that rings pretty hollow from the party whose Mayor wants us to reelect him because, among other things, he has given money to private developers. (His words, not mine.)

Oh well. That “self rule” thing wasn’t working out so well anyway. Right?

Salience

Wednesday, Emmis Communication’s chief Jeff Smulyan came in to address my class in “Media and Public Affairs.” It was a wide-ranging discussion, focusing primarily upon current business  challenges posed by changing technologies, consolidation of ownership and the like, as well as the contemporary policy environment. When a student asked why it was so difficult to pass laws even when those measures were favored by significant majorities of the electorate, Jeff’s response pointed to the importance of salience.

Salience simply means the importance we attach to a particular issue. We have an excellent example of its importance here in Indiana; when Governor Daniels convened the Kernan-Shepard Commission to study government reorganization, one of its recommendations was elimination/consolodation of Indiana’s 1008 townships. Townships are an artifact of the days when travel to the county seat (by horseback) took half a day. Their responsibilities have steadily shrunk, and today they do little but run (some) fire departments and administer (with documented inefficiency) poor relief. Poll after poll confirmed that most Indiana voters agreed with the Commission. Abolishing townships should have been a no-brainer–except we still haven’t managed to do so.

Why? Salience, that’s why.

Although a large majority of voters agreed that townships should go–that they wasted money better used elsewhere–it was a rare individual for whom this was a burning issue. For the Township Trustees and members of their Advisory Boards, however, it was issue #1. Eliminating townships would eliminate the livliehoods of the Trustees (and the relatives many of them employ). It would eliminate the inflated fees paid to many Advisory Board members for attending three or four meetings a year. They focused like lasers on lawmakers, marshalling their forces, bringing in people to testify, hiring lobbyists and calling in political favors. For them, the issue was salient. And we still have townships.

In Washington, this same scenario plays over and over. Most of us disapprove of the special tax breaks that benefit Big Oil, but how many of us have written or called our Senators or Representatives about it? Spent money lobbying for repeal? Very few. But Big Oil (and Big Pharma and Big Banking, etc.) certainly have. It’s not unexpected that people will rally to defend their financial interests, but when those with lots of resources focus those resources on derailing a proposed bill, the likely result is that the bill will be derailed.

On those rare occasions when one of these issues becomes salient to a sizable number of voters, it’s possible to win these contests. The issue is: how do you make “good government” salient?

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Easy Answers are Rarely the Right Answers

The various contenders for the Republican Presidential nomination have been falling all over themselves to attack the Environmental Protection Agency, joining their congressional colleagues in a race to see who can call loudest for abolition of the agency. According to these critics, the continued existence of the EPA is a leading reason job creation has lagged the recovery.

It’s so nice to have a simple explanation for our current economic lethargy. Get rid of the tree-huggers! Everyone knows that scientists just made up stuff like global climate change anyway. (What no one seems to know is why they would do that, but let’s not think too deeply or we might get headaches…)

Let’s assume the EPA is really enforcing policies that hinder job growth. I’ve seen no evidence to that effect, but let’s play “what if.”  Does that mean we should NOT protect the environment? Wouldn’t it make more sense to evaluate EPA regulations, to do a cost-benefit analysis to see how we can continue to protect the earth while taking care not to unduly hinder the economy? Of course, that sort of analysis is complex. It requires analytical skills. And it doesn’t fit on a bumper sticker.

If we don’t emerge pretty soon from this era of stupidity, we’re doomed.

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