Pocketmint

small change toward a rich life
19
October
2008

Which President would economists pick?

The presidential candidates have finally figured out that the top concern of most Americans right now is our floundering economy, and predictably they’ve both claimed to have the best economic solution.

As I wrote before, I’m skeptical about how much influence the President has over the economy, especially in the short term. But I’m just a layperson. Wouldn’t it be great to know what a majority of professional economists think about the presidential candidates?

Scott Adams thought so too. The author of Dilbert says, “I found myself wishing someone would give voters useful and unbiased information about which candidate has the best plans for the economy. Then I realized that I am someone, which is both inconvenient and expensive.”

Also: awesome. Adams personally commissioned and paid for a survey of 523 economists, and then released the detailed data to the public. There’s a whole lot of raw information there I won’t go into; you can read the original source (.ppt) or an overview with commentary by Adams on CNN.

Back to our original question, though: in this survey 59 percent of the economists say Obama would be best for the long-term economy, while 31 percent prefer McCain. Only 10 percent believe that there would be no difference.

Two points come to mind: one, note the phrasing: long-term economy. No one here is expecting a quick fix, regardless of election outcome. And two, the question was asked on a seven-point scale, with the three points on either end representing a candidate, and only the middle point representing ‘no difference.’ This would tend to skew the responses toward picking either candidate over none; there was no reporting that separated the ‘major change’ voters (the 1s and 7s) from the ‘minor change’ voters (the 3s and 5s).

Another interesting fact is that economists (both in this study, and in the country at large) are predominantly Democrats. Don’t know why, but there it is. Among Independent economists, however, Obama is still favored, 49% to 37%. (The other 14% are in the ‘no difference’ camp.)

And finally, on the question of whether we should care about the opinions of economists, I’ll quote from Adams’ blog:

If a weather expert tells you what the weather will be on a specific day next year, you can safely ignore him. If he tells you a hurricane is heading your way, it’s a good idea to get out of the way, even if the storm ends up turning. That’s playing the odds.

Likewise, if an economist tries to tell you where the stock market will be in a year, you can safely ignore that. But if he tells you a gas tax holiday is an unambiguously bad idea, that’s worth listening to, especially if economists on both sides of the aisle agree.

If you think it is okay to ignore economists because they are so often wrong, you’re looking at the wrong questions. Economists are generally wrong with complicated models but right about concepts. For example, they know that additional domestic drilling won’t make much of a dent in the energy problem. And they know that free trade is generally good for all economies. (You can argue with my examples, but the point is that some things are generally known by economists while not being understood by the general public.)

By analogy, a mechanic knows that changing your oil is good for your engine, but he can’t tell you what problems you will have with your car next year. You shouldn’t ignore the mechanic’s advice on changing oil just because he doesn’t know when your battery will die, or because he didn’t personally perform any scientific studies on oil changes.

Personally, I’d love to see a Nobel Prize-winning economist as President. Sadly, this is not an option.

One way or another, though, it’s time to change the oil in our car.

(Photo by jmtimages.)

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2 responses

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  1. Dana says

    Of course, sometimes another kind of question needs to be asked. His remark about free trade brought this to mind. It might be good for an economy, but it doesn’t work out so well for the people. Bear in mind that it is possible for an economy to expand (which is what is meant by “good for the economy”) while only a relative few people benefit from that expansion.

    But the question I was thinking of is, “Do we want to do things that are good for the economy as it is now?” Do we want to keep things the way they are so that we have to spend foolishly, lower people’s wages, make people sick, and destroy species, in order for the economy to “do well”?

    You’re correct that a President can’t affect the economy all by himself. Neither can I singlehandedly change the economy in ways that it would better serve the common people, the environment, etc. And I don’t think it really matters, in this sense, who got into the White House because both major candidates were asking the wrong questions and using the wrong framework. But if we want to stop having these big upswings and huge downturns and the messed-up environment and the enforced poverty for far too many people… maybe it’s time we bought a new car entirely. Or quit driving, and tried walking instead. And now I’ll quit flogging this poor metaphor to death.

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