Why no economist PACs?

by on May 9, 2013 at 5:45 am in Economics, Uncategorized | Permalink

From Really Curious:

There is much that economists actually agree on. Why don’t we have PACs or other groups emerge that push political solutions which represent common sense agreement on a variety of issues.

There is a selection issue.  There are plenty of issues where economists agree and those views are enacted into policy, in part because special interests do not mind, do not have enough power, or perhaps even on net agree.  Non-agricultural free trade, or rather near-free trade, is one example, the general adoption of capitalism is another.  In those cases the PAC is not really needed.

When economists are not listened to, that often means strong special interests and/or strong voter sentiment stand on the other side of the equation.  The numerous special deductions in the tax code, most of which have no efficiency justification, are examples.

Given such formidable enemies, who would fund an economists’ PAC?  Who would donate?  Why not just donate to a single issue PAC which covers an economist-friendly issue?  Here is a list of the biggest PACS, starting with realtors and beer wholesalers, not ideologues or for that matter sensible policy analysts.  Honeywell is third.  Or if the single issue approach doesn’t excite a potential donor, I would think that more people are drawn to broadly ideological PACs, or perhaps “super PACs,” which would not quite fit with “pro-economist.”

You may know that the original American Economics Association had rather explicit political origins, as well as some religious and arguably even some racist overtones.  It did not evolve into a PAC, and over time it has become something much more professional and geared toward some rather practical, non-political ends.

dirck May 9, 2013 at 5:53 am

Or we could go the other way and eliminate all PACs and political contributions and try for honest government for a change .

Andrew' May 9, 2013 at 7:46 am

Economist PAC should be the anti-PAC, right? It should oppose every initiative of every other PAC.

Mark Thorson May 9, 2013 at 9:40 am

Isn’t the strongest weapon against PACs another PAC? Anything else is bringing a knife to a gunfight.

What would an economists’ PAC advocate? Economists themselves have strong disagreements about many issues. But I don’t think it’s hard to see what their common ground would be. That would be the creation of a National Institute of Economics, analogous to the NIH, for handing out billions of dollars in research grants to Tier-1 university research centers.

Aleks May 11, 2013 at 7:55 pm

I take it you haven’t been following the IGM Economic Experts Panel?

http://www.igmchicago.org/igm-economic-experts-panel

It turns out that most economists actually agree about a number of issues, including several high-profile ones.

There are only a handful of issues for which the answer was split. For example, economists still have different opinions on the general elasticity of demand for labor, which led to different opinions on the minimum wage. But those are the exception, not the rule. And if it were possible to create a 100% definitive study on the topic (which is always difficult to do in a macro context), then I have no doubt that we’d see consensus on that issue as well.

If there were a PAC which simply advocated for all the consensus opinions on that panel, I would support it in a heartbeat.

anon May 9, 2013 at 7:53 am

eliminate all PACs and political contributions

Or we could try making government a lot smaller so the incentives to seek rents (and the resulting crony capitalism) were also much smaller.

Nah, that’d never work. Easier to pontificate about how too much (of the wrong kind of, i.e., those I disagree with) money is in politics.

You’re either incredibly naive or a troll.

UnlearningEcon May 9, 2013 at 9:47 am

I think you’re the naive one anon. The idea that if we get rid of public programs, corporations will suddenly say ‘hey, government is too small (whatever that means) for us to gain from lobbying for special favours’ and be nice honest capitalists just makes no sense.

KT May 9, 2013 at 9:58 am

Try again. Corps obviously would not stop trying but the negative effects of special favors would be vastly decreased

Honza May 9, 2013 at 10:19 am

Agreed.

Jake May 9, 2013 at 1:21 pm

A business will only be politically active if it increases profits. If government has no ability to help (or hurt) a firm’s bottom line, why would that firm choose to expend capital on the political process? It would be a poor use of resources.

Practically speaking, it’s not possible to entirely remove lobbying & rent-seeking from politics. But ignoring the incentives that are in play is unsound analysis.

JWatts May 9, 2013 at 2:15 pm

corporations will… be nice honest capitalists, just makes no sense.

You know what also makes no sense? The idea that lobbying government for special favors is capitalism. ;)

anon May 9, 2013 at 4:36 pm

if we get rid of public programs

Oh yes, I completely forgot that agriculture subsidies, the convoluted tax code filled with special favors, limiting speech, the incredibly complicated regulations that favor large businesses and crony capitalists, etc. ad nauseum, are ALL “public programs”.

You’re right, I am the naive one….

dirck May 10, 2013 at 8:32 am

Anon ,I suppose that having the idea that there might be some way for us to bring about honest,representative government does make me sound naive .

Doug M May 9, 2013 at 1:45 pm

It is your first ammendment right to organize and to express your point of view.

Either PACs are the dark side of freedom, of they are the very spirit of it.

The Anti-Gnostic May 9, 2013 at 7:07 am

Economists run the Fed. Now they want a PAC?

James May 9, 2013 at 7:14 am

This is a perfect example of the public good problem.

anon May 9, 2013 at 8:02 am

Why would economists (supposedly dispassionate and objective “economic scientists”) spend their own money trying to influence politics when it is a lot easier to get paid by think tanks, banks, the Fed, the academy, etc., and provided free op-ed space in major media outlets, to propose policies?

When economists are not listened to, that often means strong special interests and/or strong voter sentiment stand on the other side of the equation.

Really? There’s that supposed dispassionate and objective “economic science” again. And anyone who disagrees with “science” is a trog.

Not only is there way too much money in politics there are WAY too many bad ideas. So the solution is to get money and bad ideas out of politics. Gosh darn it, the solution is so simple it’s amazing no one thought of it before!

mofo. May 9, 2013 at 9:05 am

“Given such formidable enemies, who would fund an economists’ PAC? Who would donate? Why not just donate to a single issue PAC which covers an economist-friendly issue?”

I think if someone did donate to a PAC like this, there would be a cavalcade of leftists accusing them of secretly manipulating policy for their own ends.

Andrew' May 9, 2013 at 9:13 am

And real economists would say “yes, and?”

Andrew' May 9, 2013 at 9:32 am

New rules:
1. Noone who has no races gets to comment on people who actually deal with all races. This is why I hate when professors tell me about race relations.
2. Noone who tried to insinerate them gets to either.

jf May 9, 2013 at 9:46 am

“As economists who venture into the political world so often lament, there is no lobby for efficiency.”

-Robert Behn, “Policy Analysis and Policy Politics.” from the journal “Policy Analysis” vol 7 (1981) p 216.

Behn thought it best to find those seeking a specific efficiency, and work with them. Rinse and repeat, and maybe we get somewhere.

john personna May 9, 2013 at 10:10 am

For what it’s worth, I think economists missed the “opportunity costs” in “free trade.” That is, you have to tax something. If you only tax domestic producers you create a bias towards imports. “Neutral” tariffs would not be zero, they’d be designed to balance domestic taxes, or the “tax content” of final goods.

Andrew' May 9, 2013 at 10:21 am

Towards your question to me, for myself, whatever happens between someone’s ears is none of my concern, unless you are going to babysit my kids, and even then it still probably doesn’t matter.

Andrew' May 9, 2013 at 10:23 am

Which is incidentally why I’m not a functional racist. If you distrust everyone implicitly, half of potential racism doesn’t exist.

Steven May 9, 2013 at 10:28 am

Funny, I was just joking about the fact that we need bumper stickers with economic slogans on them. The general population expels so much energy arguing about politics that they forget or ignore the fact that the economy is what drives quality of life more than anything else.

zbicyclist May 9, 2013 at 11:49 am

“There is no free lunch, but McDonalds has a dollar menu.”

“Oil of Olay can’t give you an invisible hand – just a beautiful one.”

anon May 9, 2013 at 5:52 pm

+1

Brian Donohue May 9, 2013 at 10:41 am

“We all know that people are the same wherever you go.”

Is this the racist litmus-test?

Abe Froman May 9, 2013 at 10:47 am

I wonder how George Stigler would respond to this post… Would he say an Econ PAC is a waste because larger, entrenched interests will trump the PAC? Or would he say the Econ profession is finally doing something that has a chance of making a difference?

Yancey Ward May 9, 2013 at 10:48 am

Next we will advocate that the prostitutes frequented by politicians form their own PACS.

Andrew' May 9, 2013 at 10:50 am

Who said people are the same?

Ray Lopez May 9, 2013 at 11:19 am

OK people listen up: take the case of free trade, we “all agree” that the arguments for free trade are all overwhelming (well prior_approval might not agree but that’s the exception that proves the rule). But consider this: in free trade between two countries, there are three options: (1) no free trade (worse for both countries), (2) unilateral free trade (better for at least one country, meaning even if one country does not allow free trade, the other country should, so it can benefit from ‘cheap imports’), and finally, and best,(3) is mutual free trade (expands the pie in both countries). But to get to the best third option, #3, you need to threaten a trade war (standard game theory). So if people are ‘against’ free trade, it could well be because they believe that threatening a trade war to achieve option 3 is better than caving in to achieve option 2.

Now, given the above, which is standard straightforward textbook theory on free trade, is it any wonder people cannot agree on the numerous other proposals recommended by economists? Austerity vs Krugman Neo-Keynesianism vs Summerian NGDP targeting vs Friedmanite / Taylor Rule Fed tinkering? And numerous permutations on this theme which is way beyond me? (I’m not an economist)?

No wonder we cannot agree on anything, except the majority of regular readers of this blog think it’s interesting (self-selection).

mulp May 9, 2013 at 3:23 pm

Well, actually the problem is economists theorize that the US is best at finance and marketing and China at manufacturing, so every US citizen is going to be a banker or marketeer earning $250K a year while everyone in China will be a factory worker earning $500 a year.

Except, the bankers and marketeers need services which are of the same skill level of the Chinese factory workers (manual skill) so the gardeners and barbers in the US should earn $500 a year like the Chinese they compete with – after all, the bankers could fly to China for all their haircuts, so letting Americans who can’t be bankers earn $500 cutting grass or hair is doing them a favor.

And the biggest problem from 30s through the 70s was workers got to unionize and demand too much money for their labor compared to what the Chinese earned. So, a key to any free trade agreements is workers must not be allowed to organize to obtain workplace safety, worker rights, and fair pay. Workers are after all just disposable goods in excess supply in the global market. When Korean workers unionize, the work goes to China, and when the Chinese workers demand rights, the work goes to Bangladesh, and when protests there require factories to stop production when the police condemn the building, the work will move to Africa. Why can’t workers be required to work to death to increase the profits on Wall Street?

Economists do not credit unions or environmental activists with the safer workplaces, the reduced harm to workers and the community from factory chemicals, with increased wages creating a middle class, or the environmental movement create laws and regulations and regulators like OSHA and the EPA for the America of today instead of America being worse than the heavily polluted China.

Instead, economists argue that worker safety and cleaner environment are purely the result of economic growth in a pure free market capitalist economy, and that unions and environmentalist are dangerous because they cause workers to be killed and increased pollution — in other nations.

Alan May 10, 2013 at 6:14 am

Bravo, sir, bravo!

ad nauseum May 9, 2013 at 11:21 am

I would contribute to a Pigou PAC!

Brian Donohue May 9, 2013 at 11:22 am

um…Paul McCartney and Stevie Wonder, duh.

Andrew' May 9, 2013 at 12:00 pm

No-talent hacks.

mw May 9, 2013 at 11:45 am

But the status quo is definitely *not* economists silently standing on the sidelines. What happens in practice is economists are all too happy to let themselves be used to support some policy, even though it inevitably plays out that all the caveats they would normally attach to the policy get left by the wayside. For example, a popular economics meme is that vouchers are terrific and their only theoretical problem is that poor children get thrown under the bus–*but* we can fix that by just giving poor kids giant vouchers compared to rich kids. And then in practice, all that Republicans, *explicitly relying* on the economist’s testimony, will support is vouchers *without* the giant poor kid voucher caveat.
So once again, this post is an example of attributing an air of inevitability to cases which involve real economists with real agency making real advocacy decisions with disastrous consequences. It would be *better* if they were actually silent than what actually happens.

AndrewL May 9, 2013 at 12:40 pm

I wish someone, an economist perhaps, can explain to me how you can separate protected free speech from money. I just don’t see how it can be done.

Hazel Meade May 9, 2013 at 1:33 pm

This sounds a lot like various attempts that perennially crop up to start a “centrists party” or a “coalition of moderates”.
These effort are ultimately doomed because the US political system lends itself to polarization. At this point each party is a coalition of interest groups that are bound together by tribal identity. The natural tendancy towards polarization reinforces the tribal identity and keeps everyone locked into their camps. So a centrist party or some “independent” group of economists has to get its support (financial and voting) from a relatively small group of people. It’s always going to end up being washed out by the voices of the two parties. Plus there’s plenty of opportunity for one side’s partisans or another to condemn the independent PAC as being secretly in the pocket of the other side, so any politician that sides with the centrist/independent PAC risks retaliation from their own side as a kind of traitor.

I think it would be smarter to selectively target issues that are on the fringe where there is broad agreement amoung economists, and one party or the other’s opposition is relatively weak. Start pushing the boundaries of what issues the economic consensus would win on.

mulp May 9, 2013 at 1:36 pm

Why would economists contribute money to fund a PAC when millionaires and billionaires will hire them to press their point of view using economic theories crafted to maximize economist income?

The economists have written lots of papers that prove tax cuts pay for themselves and that all of Reagan’s tax cuts were what balanced the budget in 2000, which was delayed by Clinton ramming through tax hikes in 1993 after Democrats forced HW Bush to hike taxes. If only those tax hikes were not passed and signed into law, the Reagan tax cuts would have paid off the liberal Democratic debt by 1990.

And it is obviously the Obama tax hikes of 2012 that caused the rapid increase in debt after 2001 because those 2012 tax hikes made people stop investing wisely beginning in 2001 which caused median incomes to slide so FICA taxes would continue to fund government.

And look at the economists analysis of immigration reform. Legalizing the illegals will be devastating because they will product 2% of GDP and consume almost 2% of GDP which we can’t afford. Obviously the economists have figured out the maximum amount of their production workers can consume must be limited to 50-60% because 40-50% of worker production belongs to Wall Street.

When you can earn a lot of money serving conservative PACs, why have your own PAC which might not come up with the results the Kochs and Adleman are willing to pay for? You might end up unemployed for years like Bruce Bartlett.

Doug M May 9, 2013 at 1:42 pm

What about Cato?

JVM May 9, 2013 at 11:16 pm

I’ve long advocated a “Pareto PAC” advocating Pareto improvements. Surely some of them must be near the margin of becoming policy and could use a little bump.

Alan May 10, 2013 at 5:38 am

Whenever I hear the phrase “use common sense” I think of one of
– you don’t know what to do either
– you know what you want done but are unwilling to say it
– you know what you want but lack the basic command of language to express it
– you don’t have enough data to decide what to do but you hope I have the same prejudices and preconceptions as you.

Can anyone provide a useful definition of “common sense”?

CPV May 11, 2013 at 10:46 am

Most Doctors agree on most issues regarding the practice of medicine. I don’t think that means that they would all agree about the implementation of Health Care policy.

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