A Voter Takes on Econ 101

There is little more depressing than American presidential politics at the moment. It is, to borrow a phrase, theater of the absurd.

Hillary Clinton is apologizing for running personal email server at her home and then using it for official business. Some of that business has subsequently been re-classified as containing sensitive material. So her political opponents, very last legion of them, have been pummeling her for her apparent “illegal” activity. Except, of course, it wasn’t illegal at the moment she engaged in it. But let’s not allow petty details like that spoil the fun.

Hillary is just being a Clinton: entirely self-absorbed, entitled, and extremely arrogant. Presumably she didn’t realize or care that running a private email server at home looks as if she is trying to get around normal bureaucratic channels. And to argue that others do it is tame: they are neither a Clinton nor are they running fro the presidency.

I never though of Hillary as naive, but, perhaps, now I need to.

Then there’s Jeb!.

So far and fast is he attempting to run away from that tainted family name that he mentions it nowhere. I predict he will try to change his name legally to Jeb! if his campaign continues to flounder as it is at present.

He is possibly the worst candidate we have. Let me correct that: he is the worst establishment candidate we have ever had. He started out as the favorite son of the Republican leadership, he has loaded up on boatloads of cash – using marginally legal means I might add – and has a massive lead in garnering support from establishment figures. But his campaign is awful. He simply cannot resonate with voters. He appears bored and listless to the point of putting people to sleep when he talks. There isn’t a genuine empathetic bone in his body. He is a figurehead of the wealthy elite with whom, presumably, he can chat away more affably about the latest polo results.

His economic policy is plainly terrible. It is a simple – very simple – repetition of his families long adherence to supply side economics. It a nutshell his policy is this: give huge tax cuts to wealthy people so that they will invest their saved income, this will build production, produce jobs, and thus benefit us all. Where have we heard this before? Yes it’s bunk. It has been so thoroughly disproven I think we have all forgotten that it was once a serious policy. Yet here it is being floated once more. By another Bush. Trickle down. Supply side. Whatever name you give it the policy still stinks.

Yet out there in the economic diaspora there are very many willing advocates of variants of this absurdity. Sometimes they hide behind the grandeur of calling it “Say’s Law” because, well, laws sound grand. Even if they really aren’t laws at all and are simply ideological bias being re-wrapped for academic purposes.

There is something very offensive about a member of the elite – political or academic – lecturing the hoi-polloi on how we must all make sacrifices, accept flexible wages, and vote for tax cuts for the wealthy in order to get our economy humming again.

Humming for whom? We might ask, but then we get only vague answers. I find it odd that we need to hand over first order wealth increases via tax cuts in the vague hope of secondary or tertiary knock-on effects that might or might not turn up. And, since history shows that if they do actually turn up their impact is indistinguishable from background noise, we clearly ought to find policies that have a more direct cause and effect relationship.

But that would require economics to be a bit more coherent than it is. Good luck with that.

Which brings me to one last point: over the weekend I was accosted by a small business owner here in town [in southern Vermont for the curious] who told me her last economics class was Econ. 101. My heart sank. Really?

I mean how do you disabuse someone of Econ. 101?

Not only is it about a generation behind any cutting edge thinking – if such a thing exists – but it is simplified to the point it has no meaning.

When are we going to face up to this problem?

Every single year hundreds of thousands of eager, and many more less eager, students emerge from Econ. 101 thinking of the economy in flattened two-dimensional models that purport to demonstrate the analytical triumphs of two hundred years or so of high level intellectual activity.

More often or not its bunk. Then when teachers try to make the economy more tractable and accessible by using everyday examples – we used to call it current affairs – any decent student can see straight through the two dimensions and get confused about what, exactly, economists know. Further, if the teacher gets really progressive and adds in variations on the economic theme – a little of the Marxist critique, a little feminism and so on – a good student might well leave thinking that economics doesn’t exist and that economists are simply a bunch of highly educated and over opinionated folks who love a good argument.

But that they add nothing to our understanding of what goes on out there. You know, in the economy.

Worse. Those students could end up like my interlocutor who gets very heated over the wages she has to pay. Damn it, she says, it’s hard to find good workers, and when you can you have to pay them a high wage to keep them. Why is it so hard to run a small business? That’s her question.

My response didn’t help.

I told her that her predicament was exactly what Econ. 101 would teach her. We have lowish unemployment here in southern Vermont. So in order to induce people to forgo leisure, I said, she needs to pay higher wages. Ah, she replied, but the workers aren’t very good even if you pay those wages. That’s because, I tried once more, the really motivated workers have long gone to even higher wages and the workers you are now seeing are those who are least motivated. This has something to do with marginal something or other. At least that what I said. I didn’t even dare talk about reserve armies of unemployed, or the lack thereof.

Anyway. She’s a voter. And she’s impressed by Jeb!

Which only goes to show how important Econ. 101 really is.

Doesn’t it?