Archive | Political Ignorance

The Double Standard of Libertarian Paternalism

Cato Unbound has an excellent symposium on “libertarian paternalism,” the theory that argues that government should intervene to protect people against cognitive biases that lead them to make decisions that ultimately reduce their ability to achieve their own objectives. Advocates of libertarian paternalism argue that their approach is different from and superior to traditional paternalism, which imposes the paternalists’ own values on those subject to regulation. Overall, I largely agree with the criticisms of libertarian paternalism in the Cato symposium by Glen Whitman (here and here) and Jonathan Klick. However, I wish to focus on a different weakness of libertarian paternalism: the implicit assumption that voters and government regulators are not subject to serious cognitive biases of their own.

It may well be that private citizens acting in markets and civil society often make decisions that they later regret because of cognitive errors. However, regulators and voters are people too. They also might make bad decisions because of cognitive errors. Libertarian paternalist scholars generally ignore this possibility by implicitly comparing perfectly rational regulators with often irrational consumers. But there is no a priori reason to believe that the former are more rational than the latter.

I. The Cognitive Biases of Regulators.

Indeed, there are good reasons to believe that regulators are likely to be more susceptible to cognitive biases than private sector consumers. This is so for at least three important reasons. First, regulators are making decisions for others, not for themselves. As a result, they have less incentive to get them right. If regulators in the proposed Consumer Financial Protection Agency ban financial products that are of great value to consumers, the regulators themselves won’t suffer (unless they happen to want to purchase those products themselves). The less people have at stake in the decisions they [...]

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The Stupak Conundrum: Why Did the Stupakites Change Their Positions on the Health Care Bill in Exchange for a Meaningless Executive Order?

The House of Representatives just passed the health reform bill previously enacted by the Senate by a narrow 219-212 vote. They probably could not have done without the support of eight to nine Democratic pro-life congressmen led by Representative Bart Stupak, who agreed to support the bill just before the vote in exchange for an executive order issued by President Obama. The Stupakites claimed that the executive order gave them adequate assurances that the bill would not lead to federal funding of abortion, as they had previously feared. However, the order actually does nothing to prevent this eventuality beyond whatever safeguards may have been in the bill already. The order claims merely to enforce “existing law” (which now includes the new Senate bill). Indeed, Section 4 of the order disclaims any intention to restrict any abortion funding that might be required by the Senate bill or other law:

Section 4. General Provisions.
(a) Nothing in this Executive Order shall be construed to impair or otherwise affect: (i) authority granted by law or presidential directive to an agency, or the head thereof; or (ii) functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This Executive Order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This Executive Order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity against the United States, its departments, agencies, entities, officers, employees or agents, or any other person.[emphasis added].

As co-blogger Jonathan Adler puts it, the order “does not appear to limit federal funding beyond those limits that already existed in the Senate bill, and it could be repealed by the president at any time.” [...]

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Democracy and the Appeal of Socialism

Economist Bryan Caplan wonders why socialism ever developed any broad appeal, given the weaknesses of the idea of the “New Socialist Man”:

The classic argument against socialism is that it gives people bad incentives. What’s the point of working, conserving, saving, quality control, and/or taking out the garbage if they don’t pay? The classic socialist reply is that capitalism creates the selfishness it purports to benevolently channel. Socialism will give birth to a “New Socialist Man” who loves his neighbor as himself….

I’ve always considered the New Socialist Man position to be not just weak, but absurd. Ever heard of Darwin? People are selfish because of billions of years of evolution, not capitalism. End of story…

I take hindsight bias seriously. Many mistakes really are hard to see until you actually make them. But socialism wasn’t one of them.

If the possibility of radically altering human nature were the only rationale for socialism, Bryan’s point would be compelling. As he notes, early critics of socialism quickly pointed out many of the perverse incentives it would create. You don’t have to be a sophisticated economist to realize that most people are self-interested most of the time, and that they are unlikely to work hard if there is no reward for doing so. However, the theory of the “new socialist man” was never the only version of socialism, and not always the most influential.

Democratic socialism was a crucial alternative rationale for state ownership of the economy. Even if people remain selfish, bringing the economy under the control of a democratic government could still greatly improve the lot of the working class. Unlike capitalists who pursue only their own profit, democratically elected politicians have to serve the interests of the majority of voters – even if the politicos are power-hungry [...]

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Could National Juries Alleviate the Problem of Political Ignorance?

One of the most serious defects of modern democracy is that most voters know very little about the policies they vote on. Moreover, as I have pointed out on previous occasions, it is rational for them to remain ignorant and to do a poor job of evaluating what limited political information they do know. Political philosopher Jamie Whyte recently focused on the same problem, and proposed an interesting solution [HT: Dan Polsby]:

The reason so many bad policies are good politics is that so many people vote: about 62 percent of adults at the last general election, both in Great Britain and in the United States. The best way to get more sensible policies would be to reduce the number of voters to less than 0.01 percent of the population.

To see why, consider a question that arises in banking. How many bankers should be involved in deciding whether to approve a loan application? The ideal number may vary with the complexity of the application. But the right answer is always, “very few.”

If a loan officer’s initial decision required sign-off by a majority of 100 other bankers, his own judgement would have little effect on the final outcome. So he would have little incentive to think hard about the application and the likelihood that the loan will be repaid. Since this would be equally true for each of the other 100 bankers, none would bother to think hard. Why struggle to make the right decision when your decision will have no effect?

This is the position of voters in a general election. Each individual’s vote makes no difference to the outcome. Even marginal districts are won with majorities of hundreds. If you had stayed home instead of voting, the same candidate would have been elected…

Research into voters’

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Political Ignorance and the Proliferation of Elected Offices

Prominent political blogger Matthew Yglesias recently wrote an interesting post arguing that the proliferation of elections increases the difficulty of acquiring enough information to vote in an informed manner. He quotes a post by Jonathan Bernstein, which expresses bewilderment at the range of offices he voted on in a recent Texas election:

Yesterday was election day in Texas, and I voted. And I voted. And then I voted some more. If my count was correct, I voted fifty-two times. I voted for Governor, and I voted for U.S. House and Texas House and Texas Senate…OK, I didn’t actually know the candidates for the state legislature, by I did feel a bit guilty about that. I voted for Lt. Governor (which is a big deal here in Texas). I voted for Attorney General, and Commissioner of the General Land Office, and Commissioner of Agriculture, and Railroad Commissioner. I don’t know what the General Land Office is, no. I voted for judges — judicial judges, and the county judge, who is the head of the county government, not a judicial judge at all. I voted for more real judges. We know someone who is running for “Judge, County Probate Court No. 2.” I voted for her. I voted for District Clerk. I don’t know what kind of district the District Clerk is clerk for.

Yglesias himself comments:

[I]n US political culture, the answer to every government reform problem is always that things need to be “more democratic” and this often proceeds without any real effort to think about what you’re trying to achieve. There’s obviously a sense in which subjecting more and more officials to popular election is “more democratic” but if you think that what’s good about democracy is that it creates accountability you’ll see that asking people to vote

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Are More Intelligent People More Likely to Be Liberal?

This new article by psychologist Satoshi Kanazawa concludes that more intelligent people are more likely to be politically liberal [HT: Ronald Bailey]. It has gotten a great deal of media attention, for example from CNN and Time. In reality, the article doesn’t actually prove any such thing. It has several significant methodological flaws.

I. Conflating Liberalism with Universalism.

Kanazawa uses a highly idisoyncratic definition of liberalism: “genuine concern for the welfare of genetically unrelated others and the willingness to contribute larger proportions of private resources for the welfare of such others.” This definition doesn’t distinguish liberalism from conservatism or libertarianism. It distinguishes universalism from particularism. For example, a libertarian who believes that free market policies best promote the welfare of “genetically unrelated others” and contributes a great deal of his money to charities promoting libertarian causes counts as a liberal under this definition. The same goes for a Religious Right conservative who believes that everyone will be better off under socially conservative policies and contributes lots of money to church charities. In fact, recent research by Arthur Brooks shows that conservatives and other opponents of government redistribution give more, on average, to charity than other members of the population.

When Kanazawa actually correlates measures of intelligence with views of particular issues, he finds that, controlling for various other variables, more intelligent General Social Survey (GSS) respondents are less likely to support government-mandated efforts to ” reduce the differences in income between people with high incomes and those with low incomes.” This is hardly consistent with claims that the more intelligent are more politically liberal in the conventional sense of the term.

II. Relying on Dubious Ideological Self-Identifications.

To be sure, Kanazawa also cites surveys showing that the more intelligent are more likely than others to describe themselves as [...]

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Is Repealing McCarran-Ferguson Health Reform?

H.L. Mencken once observed that for every human problem, there is a solution that is “neat, plausible, and wrong.”   Exhibit A is the “Health Insurance Industry Fair Competition Act” – also known as H.R. 4626.  This bill seeks to repeal the antitrust exemption granted to health insurance companies by the McCarran-Ferguson Act.  The Obama Administration has thrown its support behind the proposal, and it passed the House of Representatives two days ago by an overwhelming bipartisan vote of  406-19.

The stated purpose of repeal is to increase competition in the health insurance market and thereby lower premiums.  Thus, Senate Majority Leader Harry Reid argued that “there is no reason why insurance companies should be allowed to form monopolies and dictate health choices.”  Rep. Betty McCollum asserts that repeal “will save every family in America who purchases health insurance at least 10 percent” on their premiums.  Representative Tom Perriello, one of the sponsors of H.R. 4626 stated at a press conference last week that “Americans deserve to know who stands with them against the price gouging of middle-class and working-class folks.” In October, 2009, Senator Charles Schumer stated that the exemption “is one of the worst accidents of American history, [and] it deserves a lot of the blame for the huge rise in premiums that has made health insurance so unaffordable.”

Professor (and former Secretary of Labor) Robert Reich argues in the New York Times that exemption is “why a handful of insurers have become so dominant in their markets that their customers simply have nowhere else to go.”  At the health reform summit yesterday, Speaker Nancy Pelosi stated that the overwhelming vote to repeal the exemption was “a very strong message that, yes, the insurance companies need to be reined in.”

Some background is helpful in evaluating [...]

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Ignorance is Not Stupidity, Redux

Co-conspirator Ken Anderson draws my attention to Alan Wolfe’s statement that “Americans are most certainly misinformed. Dumb they are not.” This of course is exactly what I have been saying for years: political ignorance is widespread, but isn’t necessarily a sign of stupidity. To the contrary, being ignorant about politics is, for most voters, actually rational behavior, as is doing a poor job of evaluating the political information they do possess. I also find myself in agreement with Alan Wolfe in his skepticism about Derek Bok’s paternalistic policy proposals (though for different reasons). If voters tend to be ignorant and often illogical in their evaluation of the information they know, transferring more power to government in order to adopt paternalistic policies will only increase the impact of the types of cognitive errors paternalists seek to correct. [...]

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Rational Ignorance Alert! Rational Ignorance Alert!

I hereby respectfully draw Co-Conspirator Ilya’s attention to Alan Wolfe’s witty and insightful book review in today’s New York Times of Derek Bok’s The Politics of Happiness. In particular to the following two sentences; should we call this rational political ignorance or not?

Americans are most certainly misinformed.  Dumb they are not.

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My Forbes Op Ed on Political Ignorance

Forbes has just published my op ed explaining how political ignorance and irrationality cut across both sides of the political spectrum:

A recent poll sponsored by the liberal Daily Kos Web site shows that many self-identified Republican voters hold irrational and extremist views–a finding that Kos founder Markos Moulitsos deems “startling.” Unfortunately, too many commentators mistakenly assume that such ideas are confined to one side of the political spectrum….

[O]ne can easily find parallel examples of dubious views among Democratic voters.

Moulitsos highlights the 36% of Republicans in the Kos poll who seem to endorse birtherism, and the 22% who say they aren’t sure. Yet a 2007 poll found that 35% of self-identified Democrats believe that President Bush knew about the 9/11 attacks in advance, and 26% said they didn’t know if he did…..

Other examples of irrationality by Democratic voters are not hard to come by. According to a 2009 survey, some 32% of Democrats believe that Jews deserve at least a substantial amount of blame for the financial crisis (compared with 18% of Republicans). In November 2008 some 59% of Obama voters did not know that the Democrats then had control of Congress.

Voter ignorance and irrationality are general shortcomings of modern democracy. Most voters have incentives to be “rationally ignorant” about politics because of the extremely low chance that any one vote will be decisive in an election. For similar reasons, voters also have incentives to do a poor job of evaluating the political information they do have. Numerous studies show that they tend to discount information that goes against their preconceptions, while overvaluing anything that seems to confirm them.

The op ed is a revision of this Volokh Conspiracy post. [...]

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Did Political Ignorance Help Cause the Financial Crisis?

Political scientist Jeffrey Friedman has an excellent article arguing that political ignorance by both regulators and voters played a key role in causing the financial crisis:

You are familiar by now with the role of the Federal Reserve in stimulating the housing boom; the role of Fannie Mae and Freddie Mac in encouraging low-equity mortgages; and the role of the Community Reinvestment Act in mandating loans to “subprime” borrowers, meaning those who were poor credit risks. So you may think that the government caused the financial crisis. But you don’t know the half of it. And neither does the government….

Given the large number of contributory factors — the Fed’s low interest rates, the Community Reinvestment Act, Fannie and Freddie’s actions, Basel I, the Recourse Rule, and Basel II — it has been said that the financial crisis was a perfect storm of regulatory error. But the factors I have just named do not even begin to complete the list. First, Peter Wallison has noted the prevalence of “no-recourse” laws in many states, which relieved mortgagors of financial liability if they simply walked away from a house on which they defaulted. This reassured people in financial straits that they could take on a possibly unaffordable mortgage with virtually no risk. Second, Richard Rahn has pointed out that the tax code discourages partnerships in banking (and other industries). Partnerships encourage prudence because each partner has a lot at stake if the firm goes under. Rahn’s point has wider implications, for scholars such as Amar Bhidé and Jonathan Macey have underscored aspects of tax and securities law that encourage publicly held corporations such as commercial banks — as opposed to partnerships or other privately held companies — to encourage their employees to generate the short-term profits adored by equities investors…..

This litany

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Republican Voters Often Have Ignorant and Irrational Views – And so do Democrats

This recent Daily Kos-sponsored poll showing that large proportions of self-identified Republican voters hold irrational and extremist views has gotten a lot of attention recently. In the above-linked post, Markos Moulitsos writes that the results are “startling.”

There are some methodological problems with the survey (see here and here). In my view, the most important is that it probably oversamples the most committed Republicans. Strong partisans are more likely to hold extreme views, such as the “birther” belief that Obama wasn’t really born in the US (endorsed by 36% of Kos’ respondents). Some 83% of the Kos respondents say they are likely to vote in the 2010 elections, which is a much higher proportion than in the general population; Committed partisans are far more likely to turn out (especially in midterm elections) than lukewarm ones.

Despite such flaws, I think that many of the Kos findings are roughly accurate. The mistake is not the conclusion that partisan Republicans hold many irrational views, but the implicit assumption that this problem is confined to one side of the political spectrum.

I. Ignorance and Irrationality are Common Among Democratic Voters Too.

One can easily find parallel examples for Democrats. Thus, Kos makes much of the finding that 23% of Republicans in the survey say they want their state to secede. But a 2008 Zogby/Middlebury College poll found that support for secession was vastly more common among liberals than conservatives. In that poll 32% of liberals claimed that their state has a right to secede (compared to only 17% of conservatives), and a whopping 33% of African-American respondents (an overwhelmingly Democratic group), said that they would support a secession movement in their state. I suspect that supporters of the opposition party are always disproportionately likely to express support for secession when they [...]

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Obama Perpetuates the Myth of Bush as Free-Marketeer

In the State of the Union, Obama continued to blame Bush and the Republicans for our current economic problems. This is understandable for two reasons. First,the GOP does deserve a good deal of blame, though my list of their misdeeds would probably look different from Obama’s. Second, pretty much any president in Obama’s position would do the same thing.

Much less defensible is Obama’s attempt to claim that the Republicans purused free market policies during the last eight years, and thereby caused the economic crisis:

From some on the right, I expect we’ll hear a different argument — that if we just make fewer investments in our people, extend tax cuts including those for the wealthier Americans, eliminate more regulations, maintain the status quo on health care, our deficits will go away. The problem is that’s what we did for eight years. That’s what helped us into this crisis. It’s what helped lead to these deficits. We can’t do it again.

In reality, of course, the Bush-era GOP greatly expanded government control of the economy, including major increases in spending, regulation, and federal “investment” in education. I discussed this at some length here, here, and here. Far from “maintain[ing] the status quo in health care,” Bush established the Medicare prescription drug benefit, the biggest new government program since the 1960s. Ironically, Obama referred to the prescription drug program and other Bush-era spending increases as contributing to the deficit earlier in this very same speech.

The Bush as free marketeer meme is an important prop in the Democrats’ case for massively expanding government control of the economy today. Logically, of course, it is possible to argue for such an expansion even if Bush did it too. Maybe he just didn’t go far enough, or didn’t [...]

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The Libertarian Vote

David Kirby and David Boaz have published a new Cato Institute study estimating the size of the “libertarian vote.” They conclude that about 14% of American voters are libertarian in the sense of broadly opposing government regulation in both the economic and social realms. As a libertarian think tank, Cato obviously has a strong interest interest in coming up with a high estimate of the number of libertarian voters. However, Boaz and Kirby rely on polling questions from the National Election Study, a widely respected comprehensive survey of American political opinion developed by primarily liberal political scientists. They also note that other research by Gallup and Zogby comes up with higher estimates for the number of libertarian voters (20 to 25 percent). Other recent surveys show that the vast majority of Americans prefer smaller government with fewer services to larger government with more services (58 to 38 percent), and that trust in government is generally low.

Obviously, most libertarian voters in the general population are not as radical in rejecting government intervention as many libertarian intellectuals are. But they do seem to favor substantial reductions in the size and scope of government relative to current levels. We intellectuals should not be too troubled by this. Conservative and liberal voters aren’t as ideologically consistent as their intellectual counterparts either.

Kirby and Boaz point out that libertarian voters generally lack a strong sense of identification with either party, and therefore are often a swing vote in elections. Obviously, very few of these voters identify with the tiny Libertarian Party either. It is true, of course, that most of these voters may not think of themselves as “libertarian” and many of them probably don’t even know the word. They are like the proverbial man who has been speaking prose all his life [...]

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Coakley vs. Curt Schilling

Former Boston Red Sox star Curt Schilling has been campaigning for Republican Massachusetts Senate candidate Scott Brown. In response, Democratic candidate Martha Coakley called Schilling “another Yankee fan.” Schilling responds here:

I’ve been called a lot of things….

But never, and I mean never, could anyone ever make the mistake of calling me a Yankee fan. Well, check that, if you didn’t know what the hell is going on in your own state maybe you could….

Score one for Schilling here, with the minor caveat that ignorance about pro sports teams doesn’t necessarily equate to general ignorance about the state they’re in.

On a slightly more serious note, I don’t see why anyone should pay any particular attention to the political views of Schilling and other celebrities. As a longtime Red Sox fan, I yield to no one in my admiration for Schilling as a pitcher. I also think he’s an interesting commentator on baseball issues. But if you read his blog (which I very much like for the sports content), I think it’s clear that his expertise on political issues is not much greater than that of the average voter. I would say the same thing for most of the other sports and entertainment industry celebrities who make political endorsements and expound on political issues. Voters should generally discount such statements, except in the rare instances where the celebrity in question has some genuine insight into the subject. That’s not a criticism of Schilling and the other celebrities. He has his field of expertise, and he’s certainly been more successful at his profession than 99.9% of the rest of us have been in ours (myself included). And of course celebrities are entitled to their political opinions. The real fault lies with the voters and media who pay much [...]

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