Tuesday, April 10, 2012

Don't let Economics get in the way of your politics?

Via The Atlantic, the IGM Forum at the University of Chicago asked its panel of some 41 economists who hail from MIT, Harvard, Yale, U Chicago, Princeton, Berkeley and Stanford, some basic questions about key topics of modern politics, with regards to economics, of course.


A return to the gold standard -- they uniformly agreed that this was a bad idea.  Dr. Ron Paul clearly has applied his knowledge in medicine to economics, and failed.
Gold as an inflation indicator -- they uniformly agreed that gold prices reflected a lot more than inflation, making it a useless litmus for inflation.  Duh.  Take one look at how gold prices have risen, even while all measures of inflation have remained flat.
Bank bailouts -- no one disagreed with the belief that the bank bailouts helped keep unemployment higher than without them.  Outrage at the fact that they had to be bailed out, notwithstanding...sometimes you have to do things you don't want to do.  And to think Wall Street is crying about regulation!
Gasoline prices -- no one disagreed that market factors were primary causes for changes in the price of gasoline, rather than government economic or energy policies.  Newt Gingrich showed his nutty inner shell when he guaranteed that he would lower gas prices to below $2 / gallon...Mitt's following suit lately.
Free trade -- no one disagrees that free trade has a net positive effect.  Though one has to understand the downside of free trade is that workers whose jobs have been shipped off, require retraining.  It turns out however, that the money is drying up.
Economic stimulus -- 4% disagreed that Obama's stimulus bill kept the unemployment rate lower than otherwise without it; 80% believed that the unemployment rate was lower because of the stimulus bill.  Only the politically blinded cannot see this.
Health care via employers -- no one disagreed that there are distortions in the market place, created by preferential tax treatment for employer-provided health care.  Since you don't usually know the price you're paying, you're more likely to abuse the system, ignore the cost, etc.  If you've never been self-employed or unemployed, you might never realize this point.

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