Friday, December 30, 2011

Getting More Bang for the Buck

The chart below, and it's from Moody's, a mainstream source, says what progressive economists have been saying all along. As the column on the right shows (It's that technical term called "bang for the buck"), progressive policy prescriptions are more effective than conservative ones. I do not know the methodological specifics, but the higher number indicates greater efficiency.

One example is "increased infrastructure spending," which has a score of 1.57. This was, and is, spending urged by progressives and by the Democratic Party in general. In comparison, conservatives, and certainly every Republican presidential candidate, argue for reduced corporate taxes (.32), that the Bush tax cuts should be permanent (.32), and that we should make dividend and capital gains tax cuts permanent (.37). It is not a coincidence that each of these items, despite demonstrated inefficiency, favor the rich. And wouldn't you know it, even a temporary increase in food stamps proves to be the single most efficient item on the entire list, a policy strongly supported by Democratic pols and strongly opposed by Republicans.

The chart does not say why the policies differ so much, and it certainly does not address why Republican pols ignore the evidence, but two observations are warranted.

The first of these is that from an economic perspective, policies that help the working and middle class are generally superior because it is they who prop up the economy, and that is because they work, pay taxes, and, very importantly, are the primary patrons of most businesses in America. They are the true job creators and they are the reason most businesses even exist. Most businesses will tell you that they don't need a tax break, or less regulation. What they need are more customers.

But this does not explain why Republicans so shamelessly shill for the rich, and why so many middle-class Republican voters are OK with this. The answers are mostly not found in economics, but in psychology. My premise is this: Educated progressives are in favor of evidence-based policies. Of course, some policies have not been effective, but those that are not get revised or abandoned. And don't get any ideas about how progressives keep flogging dead ideas like Keynesian stimulus packages; the chart above shows them to be effective. Progressives (mostly) follow the evidence, and base policies that they consider rational and empirically-grounded.

In contrast, true conservatives are not basing policies on economics (except perhaps the economics of personal enrichment), but on psychology. Issue after issue, conservatives are making moral arguments about what they think is right, not what is economically sound. Their positions are often less rational than they are visceral.  Call it the politics of personality. And do note that even ostensibly educated Republicans, such as the presidential candidates, cater to and sound like their conservative base: Their economic policy prescriptions are almost entirely lower taxes, lower regulations, and now that a Democratic is in the White House, lower spending. These are absurdly inadequate and inappropriate policies that are massively at odds with the evidence and expert opinion.

There is a growing body of literature on what motivates conservatives. I have touched on this previously, especially on the role of authoritarianism.  Here let me add two additional academic studies: one has been out for a few years, called The Political Brain: The Role of Emotion in Deciding the Fate of the Nation, by Drew Westin. The other just came out: The Reactionary Mind: Conservatism From Edmund Burke to Sarah Palin, by Corey Robin.

Read, learn, and arm your brain.  Your nation depends on you to make rational decisions.

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