Tuesday, June 08, 2010


That should be the title of Daniel Klein's piece in this morning's WSJ, but instead it's how liberals are incredibly stupid and "flunk Econ 101" for not hewing to various conservative economics principles.  Here's an example of how "liberals" fail at economics:
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.
Do you agree or disagree with this basic conservative statement:  restriction increases cost?  There's a clever way to get around a right or wrong answer.
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.
Now that's funny.  I myself would have answered "not sure" as there are no guarantees that restriction of housing development will raise the cost of housing.  Look at our own broken housing market these days.  What if there's a glut of houses on the market already?  Restricting more housing may not affect the price at all, or in the short term it may lower as people get more desperate to sell now.  Maybe that's a larger factor determining price.  If the conservative answer was correct, "Restrictions make housing less affordable" then why did the real estate market crash as we built more and more houses and the price kept rising in 2005 and 2006?  Wouldn't the opposite, "Less restrictions make more affordable housing" be true?  That wasn't the case in many parts of the country.

Also, what constitutes "Affordable"?  Housing only gets "affordable" if people can afford to live in the house, correct?  Restricting development reduces supply but it doesn't always change the price.  Reducing supply doesn't raise the price if demand for the product lowers as well, or the price of the item is non-elastic, which is to say "No matter what, a new iPhone 4 32GB model is going to be $299 no matter what the demand or the supply is this summer."

Finally, what constitutes a restriction?  "Zoning laws mean houses can't be built with in-ground pools in this development."  Does that make the houses in the area more or less affordable?  "Houses cannot be more than two floors tall."  Same thing.  Depends on the restriction.  You can make the case that you disagree with the question here.

The test didn't ask if that was the correct answer, it asked if you agreed with it.  Since the "correct answers" are all basic conservative economic theory, then yes, liberals would be the most likely to give the wrong answers.

Keep in mind however that these guys counted "not sure" as "not an incorrect (unenlightened) answer".
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 test proceeds like this, where the "correct" answers are all conservative economy theory tropes, and the "unenlightened" answers all are the opposite of the conservative ones.  Liberals and progressives did badly on such a test.  In fact, the basic definition of conservatism in economics is that you believe economics follows such basic rules.  Orthodoxy, in other words.  Liberalism in economics means you believe that economics doesn't follow these basic rules, that systems are more complex, and that there are human factors involved...maybe even irrationality.

So yes, liberals tanked on this test.  Badly.  If you believe that economics is basic and all, and that everything's pretty cut and dried, sure, and that we don't live in a complex world...yes.

Surprise.  Liberals don't agree with basic conservative economic theory.

No comments: