Tuesday, June 19, 2018

Teaching Economics in an Idiocracy


 What follows is my June 19, 2018 Op-Ed in The Orlando Sentinel
A few years ago one of my colleagues sent me the trailer to a movie called Idiocracy.  This film was set in the United States in the year 2505.  The premise of this film was that after 500 years of rapid population growth among Americans with lower levels of intelligence and low birth rates among smarter people, eventually the country was filled with idiots. This included the President (a profane former professional wrestler), his cabinet, all levels of government and the entire citizenry.

My problem with this movie is the assumption that it would take 500 years to create a nation of non-thinkers.   As I see it, in many ways, we have already arrived.

I have been an economist for just over 30 years.    When I reflect back over what life was like over that time period I clearly recall how simple my job used to be.  Granted, economics is not easy.  It is indeed one of the most challenging subjects you can study.  What was easy was the degree to which Americans could process economic theory and supporting evidence in a myriad of categories.

Take the concept of international trade for example.  Economists dating back to Adam Smith have clearly illustrated how the principle of comparative advantage leads to mutual gains from trade.   There is a reason, I tell people that we have grocery stores rather than gardens.   We all use the money we make from where we are skilled and then give that money away to farmers who possess an advantage over us in the growing of everything we want to eat.  We win when we get good food at prices we can afford and we win because we do not have to allocate long hours to learning how to coax a tomato out of the ground.

When Florida sends oranges to Minnesota we do not hear about Minnesotans massing at their border in protest over the “dumping” of oranges in their state any more than Floridians complain when corn from Minnesota arrives in our stores.  Both states win from this event.

The same is true when we buy steel from Canada.   Oops. 

We seemed to understand that trade from nation to nation makes sense – years ago.  Today, when I try to show Americans how foolish President Trump’s steel tariffs are, I get much more resistance from Trump supporters who contend that somehow he is going to magically bring back the moribund and horribly inefficient American steel industry.  Canada, I hear, is keeping America from bring back jobs in this key industry.     No matter how much I (and other economists) point out the last time we tried this more than 200,000 jobs were lost in the steel-using industries (see George W. Bush’s steel tariffs), Trump voters believe that their guy has special powers over the laws of economics.

It does not get much better when immigration comes up.  Forgetting for a moment that economists have repeatedly shown that immigrants create more jobs than they displace; engage in less crime than native-born Americans; use social welfare benefits less than Americans and play a valuable role in keeping prices down in everything from agriculture to home construction; Trump supporters in my classes and in the community want no part of it.  They don’t even want to hear about speeches by Republican legend, Ronald Reagan, calling for amnesty and promoting open doors for immigrant seeking greater liberty and opportunities.

Talking to Democrats is also an exercise in futility.

For the new wave of Bernie Sanders/Elizabeth Warren supporters it is like talking to a wall when you show them the economic policies of John F. Kennedy and Bill Clinton.

It is staggering the blank stares of incredulity that I get as I lecture on Kennedy’s massive personal and corporate income tax cuts and how the economy of the 1960’s achieved record low unemployment rates, rising incomes and a doubling of government tax revenue in the wake of his pro-growth tax cuts.

Instead, the fans of Bernie want the top 1% to be hammered with higher taxes in the name of “fairness”.  Asking them to define fairness yields more blank stares.

When people I talk to learn of Bill Clinton’s passage of NAFTA and his global drive to open foreign markets to American investment capital, they adopt the anti-trade sentiment of Bernie and Donald Trump even when they see the data on net increases in wages and jobs in the wake of his sound trade policies.

I could mention the trouble I run into explaining the stupidity of the $15 minimum wage and Bernie’s idea of providing jobs and health care to every American who wants one, but this paper limits my word count. 

If America is to avoid becoming a land of idiots, it is incumbent upon all of us who understand truth to engage our fellow citizens.  Otherwise, the profanity-using, professional wrestler President is right around the cor…….

Never mind.

 

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