How the Other Half Thinks – June 14, 2010

I confess, recently I’ve spent some time in the other team’s locker room, so to speak.  I stumbled upon the local “progressive talk radio” station, and I’ve given it a listen, just to see if I could find anything illuminating.

You might say I did.
For one thing, it is clear (as if I needed any evidence), that progressives have a phobic distrust of profits and of the private sector in general.  For all that President Obama says he wants to help small business (I think in his mind that means find way of shoveling taxpayer money their way), when it comes down to the gritty business of selling wares and getting paid for it, many liberals seem to think that way lies corruption, selfishness, cheating, and worse.
For instance, this*, from a caller on the topic of health care:  “I’d much rather have a government bureaucrat making health care decisions – someone who has a comfortable salary and benefits, who is not being pressured every day to squeeze more profits out of me or lose his job, someone who only has my health interests in mind.”  Needless to say, this childlike faith in the benevolence of government is totally without substantiation, and clearly untempered by any real life experience, unless this caller has never had to go to the post office or the DMV.  But health care is no more a limitless good with Obamacare than without it, and the bureaucrats will be making their decisions on the basis of a set of rules that have been established in some office a thousand miles away from this guy’s doctor’s office.  And I promise you, the patient’s health interests will not be driving the decisions.
*I will of necessity be paraphrasing these verbatim comments, because it’s hard to run a recording device while you’re driving; but I promise to be true to the substance of the comments.
And then there was this, from one of the talk show hosts: “I believe in capitalism; I just don’t believe in monopoly capitalism.  When you have all the oil in this country controlled by seven corporations, from the drilling to the gas stations, or when all of the thousands of magazine titles on the news stands are owned by seventeen huge media companies, that’s monopoly capitalism.  And once they have a monopoly, they can do whatever they damn well please.”  Well, of course, the economic ignorance in this statement fairly pours from every word.  Monopoly, as the term “mono” implies, means there is one provider.  If you’ve got seven, or seventeen, competing providers, you have cutthroat competition in which a few well-financed adversaries try to take market share from each other, usually with a vicious cost-cutting campaign.  And who benefits from the lower prices?  The consumer – quite the opposite of the situation in a monopoly.
How about this one, from another talk show host: “We can’t have our jobs being shipped overseas every day.  We need to get back to the kind of tariff-based economy that helped build the middle class in this country in the ’30’s, ’40’s and ’50’s.”  As I listened to this, a refrain seeped into my head, a refrain that echoed all the way back to my first class in 20th-century US history in high school: Smoot-Hawley, Smoot-Hawley, Smoot-Hawley.  I suppose there is no law against anyone saying anything they want to on the air, as long as there are people willing to pay for it by listening to the ads.  But, seriously, shouldn’t a modicum of history be a pre-requisite for anyone discussing politics?
Of course, listeners to this station gleefully piled on when the subject turned to BP and the oil spill.  But again, the remedies seemed so foolish – based, as I’m convinced so many progressive arguments are, on emotion rather than reason.  For example, one caller suggested that Obama “take over BP and break it up.  I’m sure he has the power if he wants to do it.”  As if that would do anything to solve the problem.  How would a weaker, more splintered BP be more effective at either stopping the oil or cleaning up the beaches?  (By the way, that is a dangerous side-lesson of the feds’ takeover of the auto companies, riding roughshod over the legal property rights of the bondholders in the process – certain people now think that’s OK, and the government need only keep its collective eye open for the next opportunity.)
Another suggestion was this: “We ought to put the whole oil industry under government control.  They did it in Norway, in Mexico, in Venezuela; we can do it here.”  There is no better example in the world of how political control of a resource like oil leads to destruction of the asset than Petroleos de Venezuela.  Pemex is not far behind, but it does have the benefit of being owned by a democracy which puts some constraints on the government’s ability to loot the company.  Chavez has poured oil money over everybody he wanted to favor and has done zippo to develop Venezuela’s oil wealth.  This is why production has been declining steadily for years, and even though oil prices remain high, the regime is running out of money.
Good idea.  Let’s see if we can do that, too.
Finally, one talk show host, who really should know better, fairly blew up at the microphone a few days ago at the demands of Gulf state politicians to resume offshore drilling.  “What are they thinking?!!” he demanded.  “The oil is still gushing and they want to go drill more!”  Well, yes, otherwise we will be replacing Gulf oil with imported oil, which is less environmentally safe than domestic, which once more will feed the coffers of those who wish us ill, and which in the bargain will put hundreds of thousands of industry workers out of a job.  Jobs, I need hardly point out, are not just the country’s most plentiful commodity these days.
So, with all this economic nonsense coming from progressive talk radio, I asked myself, is it just me, or do they just not get it when it comes to numbers and money?  Turns out, it is not just me, and I have documented proof.
In a study published by Daniel B Klein of George Mason University, and Zeljka Buturovic of the Zogby polling company, researchers asked a series of economic statements of nearly 5,000 people.  The statements touched on some contentious aspects of economic policy, but the generally accepted verity of them is not in dispute among economists.  The respondents were asked to rate each question from one to five (strongly disagree to strongly agree), and also to describe themselves on a six-point scale from very progressive through conservative to libertarian.
The researchers looked for those respondents who gave wrong answers, agreeing with false statements and vice versa.  To avoid ambiguity and guessing, they eliminated the “not sure” answers as well as the correct ones.
The questions included these:
“Restrictions on housing development make housing less affordable.”  (They do.)
“Mandatory licensing of professional services increases the prices of those services.”  (It does.)
“Overall, the standard of living is higher today than it was 30 years ago.” (It is.)
“Rent control leads to housing shortages.” (It does.)
“A company with the largest market share is a monopoly.” (see above.)
“Third World workers working for American companies overseas are being exploited.” (which is why they line up at the gate by the hundreds to get the jobs.)
“Free trade leads to unemployment.” (see above comment about tariffs.)
“Minimum wage laws raise unemployment.” (They do.)
The researchers then tallied the average number of incorrect answers (disagree/strongly disagree, or the opposite, as they case may be) and sorted them among the different self-declared sets of political views.  Here are the results out of eight questions:
Very Conservative: 1.3 wrong answers
Libertarian: 1.38 wrong answers
Conservative: 1.67 wrong answers
Moderate: 3.67 wrong answers
Liberal: 4.69 wrong answers
Progressive/very liberal: 5.26 wrong answers
This goes a long way to explain not just what I heard on Chicago’s Progressive Talk Radio, but also why the Obama Administration thinks it can add tens of millions of consumers of health care to the system, provide disincentives for doctors to enter or continue in the profession, and at the same time bring costs down.
For liberals, serving the public good means repealing the law of supply and demand.  Regularly.
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