Wall Street Journal editorials are usually very good, the WSJ‘s editorial page being one of the few of major newspapers whose authors are economically literate. The editors recently argued that last Friday’s late-hour budget agreement was “The Tea Party’s First Victory.”
Maybe it was. But consider this passage from the piece:
Republicans also showed they are able to make the compromises required to govern. We realize that “governing” can often be an excuse for incumbent self-interest. But this early show of political maturity will demonstrate to independents that the freshmen and tea party Republicans they elected in November aren’t the yahoos of media lore. A government shutdown over a spending difference of $7 billion and some policy riders would have made the GOP look reckless for little return.
Here the editors are misreading the political tea leaves. There is nothing that “the freshmen and tea party Republicans” can do that will change the opinion of most media outlets that they are “yahoos” bent on “reckless” endangerment of the republic. Indeed, that is one of the more charitable ways to describe what liberal pundits and editorial pages will write, not to mention think, about these Republicans. And when I say they can do nothing to change that, I mean it: Even if the Republicans had capitulated entirely to the Democrats’ opening offer of—what was it, $9 billion in cuts?—it would have been explained not as evidence of the ‘maturity’ and ‘reasonableness’ the WSJ seems to believe but because of something rather less flattering. (My guess: either (a) stupidity, (b) a secret Machiavellian strategem, or (c) some combination of the two.)
If I’m right about that, and the central currents of media and liberal opinion of these Republicans will not change, then why should either they or the WSJ bother worrying about it?
PILEUS 
What’s truly frightening is not the fact that, between two nearly identical statist parties the media has such a glaring bias (how can you be so sure you prefer one party to the other when the first party wants to go 14.5 trillion into debt that the other party insists on only 14?). What’s frightening is that even the so-called conservatives are looking for ways to delay the now-failing welfare state’s demise. They are looking for ways to fix it, instead of admitting that it’s the problem. I had hoped the Tea Party would usher in a restructuring of government. Apparently all they want are slightly bigger budget cuts so their social security checks arrive in time.
What I’ve learned is that, although there may be politicians who campaign on limited government, there are really no politicians who govern that way. Power indeed corrupts.
You do little for your credibility when you claim that Wall Street Journal editorial page authors are “economically literate” unless you mean that they write concisely. If you think, for example, that cutting taxes for corporations will increase corporate tax receipts, you are probably not “economically literate.”
And “media lore” has little to do with the idea of Tea Partiers as “yahoos” unless you believe that a biased liberal media falsely reports their complaints that Obama is an alien Muslim Socialist who wants to take over the internet, bring Sharia law to the US, conspire with terrorists to create a worldwide Caliphate, form death panels to get rid of Granny as part of a government health care takeover, and make it illegal to buy a Triple Whopper at Burger King. This is “yahoo” on a high level, and the media only accurately reports that these folks actually believe this. Have you ever been to any of these meetings? “Get your government hands off my Medicare” is all you need to say if you want to move your “yahoo” meter pretty far to the right.
The United States of America is not broke. We are quite a wealthy country. The problem is that the people and corporations that control this wealth do not want to be team players. They want to opt out of the club formed by the Founders because people who don’t look like them are asking for help.
American entrepreneurs think government only gets in the way of the success of their trucking companies even as they move goods along a system of roads that would not exist without massive collective – that is government – investment. Corporations and wealthy individuals demand a robust defense establishment to protect their interests but cannot be bothered to pay for the invasions they demand.
At the end of the day, rewarding record increases in output with stagnant wages and a weakened safety net during a time of record corporate profit and a concentration of wealth and income in the hands of the already well off will not sustain an economic system. It makes no difference whether a Socialist or Magic Invisible Free Market Hand delivers this result. You cannot claim economic literacy if you believe it will, or does.
Stanton, your comments seem to betray two assumptions I would dispute, namely: (1) a free-exchange economy is a zero-sum game, and (2) there exists some centralized person or agency in a position to distribute goods, services, and money to everyone. We have known that the first is false at least since the 1776 publication of Smith’s Wealth of Nations, and, despite some people’s best efforts, there has not yet been in this country anyone in a position to distribute (after, of course, collecting) its wealth.
I appreciate your comment, however. I had been considering for some time writing about what some of the basic economic fallacies in which many people believe, either implicitly or explicitly. You may have given me the impetus to write on that.
Hmmm…it seems to me that conservatives who characterize taxation as coercive government theft in order to punish success and redistribute wealth, without regard to how infrastructure and workforce investments contribute to that success, are the ones who assume that “a free-exchange economy is a zero-sum game.”
And we do in fact have a centralized agency in a position to make these investments, established by the Founders to provide for the common defense and promote the general welfare, among other reasons. Though less than perfectly efficient, it is not clear that a “free exchange market” distributes “goods, services, and money to everyone” more efficiently, given its failure to reward rising labor productivity with rising return in the form of higher wages.
Indeed, participants in this “free-exchange market” seem to understand both the imperfections of that market and the ability of government to influence the movement of labor and capital, since they spend a lot of time and money demanding that government move them in ways they believe will improve their bottom lines. One could make a solid case that no members of American society want the protection and assistance from government more than the owners of the means of production.
In any event, you do not strike me as particularly “economically literate” if you think Wealth of Nations is the last word on macroeconomic theory. And I find it interesting that you never address my challenges to the central points of the post: that the authors of Wall Street Journal editorials are “economically literate” and that Tea Party activists come across as “yahoos” not because of “media lore” but because of the silly things they say.
What I wrote was “at least since,” which means that Smith’s Wealth of Nations was perhaps the first, not “the last word.”
I said that WSJ editorial writers are economically literate because they are. If one knows something about economics oneself, one can see that from reading their editorials. This is especially evident when one compares their editorials to those of other major newspapers.
Some Tea Party activists say “silly things,” yes. So do some members of every other moderately large political group, and, for that matter, of every moderately large group of humans period. Pointing out that some members of a large group have characteristic x does not entail that the entire group has characteristic x, or that most or even many members of the group do. I had thought that was too obvious to require pointing out.
It is also true that some Tea Party activists say eminently sensible things; why not address those things?
Of course, this discussion has little to do with the point of my post. So here is a proposition using another economics term: I think we have reached the point of diminishing marginal returns.
Hmmmm…again. I read “We have known that the first is false at least since the 1776 publication of Smith’s Wealth of Nations” suggests that you think Smith settled the question of whether “a free-exchange economy is a zero-sum game.” It was the “last word.” If this is not what you meant, my bad.
You should resist the urge to make assumptions about my marginal utility, but if you don’t want to address my main points, I suppose you are right.
I addressed yours. In fact, I agree with you: There really is “nothing that ‘the freshmen and tea party Republicans’ can do that will change the opinion of most media outlets that they are ‘yahoos’ bent on ‘reckless’ endangerment of the republic.”
But I agree by arguing that this is because Tea Party activists say silly things. They want silly things, like government hands off their Medicare. The media didn’t construct a distorted view of Tea Party activists as anything — they simply reported the silly things they say and people came to their own conclusions about what a “yahoo” looks like.
If you disagree, I would ask you for one or two examples of “eminently sensible” things a Tea Party activist or leader has said. I am genuinely curious.
And no, I have not reached the point of marginal returns here. I find value in knowing the thoughts of philosophy and economics professors — almost went that way myself, albeit as a political scientist, but went on to other things for good or ill.
Oh, well. Nice talking to you.
Stanton, your initial post did not seem as though you were actually interested in conversation, but rather in scoring rhetorical points. If you are, then perhaps another word or two.
Sensible claims of Tea Partiers: Just yesterday Tim Pawlenty gave a speech at a Tea Party rally in which he said we have too much debt, that federal spending and debt are about to impinge significantly on our standard of living, and that the federal government is encroaching too much on our liberty. Sounds right to me. For more of the sensible things some of them say, I am sure you can use google as easily as I can.
On your initial economics claims that you chide me (twice now) for not addressing, I did address them when I brought up zero- vs. positive-sum games. There is not much more I can say, however, because I would not know at all what to say to a person who claims that corporations “control this wealth” and will not let go of it. They are not burying wealth in coffee cans in the backyard or stacking it up in vaults. That is a very basic misunderstanding of how wealth works in an economy. I would think that a microeconomics course at any college or university would help clear that up.
I don’t find the claims that the federal government has too much debt and that this debt will “impinge on our standard of living” very sensible unless the claim is placed in context. I would in fact counter that US debt is in fact very manageable, given the overall wealth of the country and the size of the economy. Similarly, the claim that government “encroach[es] to much on our liberty” makes little sense coming from someone who apparently sees a democratic government as an agent separate from the people who serve, albeit perhaps poorly, as its principal.
It’s also not clear to me how you address my economics claims simply by bringing up zero- and positive-sum games, since you don’t actually say anything about this except that you dispute my assumption that “a free-exchange economy is a zero-sum game.” And you ignore completely my claim that we do in fact have a centralized agency capable of investing and distributing wealth.
In fact, you have not offered a substantial response to any claim I have made except to offer as “sensible” an overgeneralized Tim Pawlenty statement of potentially contestable logic depending on context without saying a word about why you find his claim “sensible.” Instead you simply restate your own claims as true and characterize mine as based on “economic fallacies” or a “very basic misunderstanding of how wealth works in an economy.”
I get that because I disagree with you and challenge your claims you think I am stupid and uninformed about economic theory. After all, every properly trained economist agrees about all these things, don’t they?
In any event, this is pretty rich coming from an economics professor who condescendingly recommends a microeconomics course as a way to better understand “how wealth works in an economy” right after suggesting that capitalists do not control the means of production in a capitalist system. If I lived nearby I would take your version of that course, where I would hope to learn more about the market behavior of firms and consumers rather than the more macro concepts involved in the nature and flow of economic wealth.
Either way, it would at least make for a very entertaining semester.
You’re right: that was condescending. I apologize. I suppose I was responding to what I perceived as the condescension in your original comment, but that is not a justification. I am swamped at the moment, but I will try to articulate my position, including what I think are the relevant economic fallacies, in a separate post soon. Fair enough?
People say America’s national sport is baseball; I say its whining about media bias.
I take no offense at your using fire to fight perceived fire.
I challenged your claim that “There is nothing that ‘the freshmen and tea party Republicans’ can do that will change the opinion of most media outlets that they are ‘yahoos’ bent on ‘reckless’ endangerment of the republic” because “it would have been explained not as evidence of the ‘maturity’ and ‘reasonableness’ the WSJ seems to believe but because of something rather less flattering. (My guess: either (a) stupidity, (b) a secret Machiavellian strategem, or (c) some combination of the two.)”
I don’t disagree that the Tea Party will have difficulty appearing sensible to the larger public. But I think so not because I believe in a liberal media bias against them that resulted in a “yahoo” lore. I think so because the normal reaction to “Shut it down!” is “Wait a minute!”
Forgive me if I condescend by expressing this opinion and my surprise that you don’t see its logic, whether or not you share it. In any event, I look forward to your substantive counter argument.
I’m happy to engage with you on “economic fallacies” and the assumptions made by competing economic theorists as well. To be sure, I lack your formal training, but I have just enough to get me in trouble — and I hope to learn something.
So fair enough, indeed.