Liberals flunk economics

MenInTights

not a plastic bag
#1
Daniel Klein: Are You Smarter Than a Fifth Grader? - WSJ.com

Sorry liberal friends. According to gallup the liberal group does not perform well on basic economic test. The questions were:
Restrictions on housing development make housing less affordable.
People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.
Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree).
Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree).
Rent control leads to housing shortages (unenlightened answer: disagree).
A company with the largest market share is a monopoly (unenlightened answer: agree).
Third World workers working for American companies overseas are being exploited (unenlightened answer: agree).
Free trade leads to unemployment (unenlightened answer: agree).
Minimum wage laws raise unemployment (unenlightened answer: disagree).
Do you think these questions were fair? Do they truly represent economic understanding or is this a biased survey?
 

CaptainObvious

Son of Liberty
V.I.P.
#2
These questions seem pretty basic and fair to me, I don't see any bias in them. I also think they are representative of basic economics, they're not questions that only an economist could answer.
 

Curious_Yellow

Registered Member
#4
Restrictions on housing development make housing less affordable.
People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.
Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree).
Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree).
Rent control leads to housing shortages (unenlightened answer: disagree).
A company with the largest market share is a monopoly (unenlightened answer: agree).

Minimum wage laws raise unemployment
(unenlightened answer: disagree).
So far so good.

Third World workers working for American companies overseas are being exploited (unenlightened answer: agree).
This is not so clear cut. If by exploited you mean working for really long hours in relatively unpleasant conditions to make about as much money per day as the average American has between the pillows of his couch, yes, of course. If by exploited you mean held there against their own will and prevented from obtaining more gainful employment by a nefarious conjuration of evil transnational coroporations and perhaps corrupt local officials, then no, of course.

Free trade leads to unemployment
(unenlightened answer: agree).
Well, economic theory tells us that free trade leads countries to specialize. However, economic theory does not exactly cover the complexity of the real world, where some countries may or may not engage in mercantile practices, say by making their nationalized banks give very cheap loans to favored companies for as long as it takes to get them profitable and bury international competition, or when another nation has a basically endless supply of cheap labor at all skill levels. I don't think this question is as cut and dry as they suggest. I would answer "don't know."
 

CaptainObvious

Son of Liberty
V.I.P.
#5
This is not so clear cut. If by exploited you mean working for really long hours in relatively unpleasant conditions to make about as much money per day as the average American has between the pillows of his couch, yes, of course. If by exploited you mean held there against their own will and prevented from obtaining more gainful employment by a nefarious conjuration of evil transnational coroporations and perhaps corrupt local officials, then no, of course.
I agree with you that question is not so clear cut but the problem is also the generalization you just made. Just across the river from where I live are many maquiladoras, American factories in Mexico. And while they are paid much less than an American worker would be paid (thus many would deem them to be exploited) they are paid more than the average Mexican is paid and are given a job in an otherwise woefully crappy economic condition could ever provide. And the working conditions are comparable to the US.
 

Curious_Yellow

Registered Member
#6
I agree with you that question is not so clear cut but the problem is also the generalization you just made. Just across the river from where I live are many maquiladoras, American factories in Mexico. And while they are paid much less than an American worker would be paid (thus many would deem them to be exploited) they are paid more than the average Mexican is paid and are given a job in an otherwise woefully crappy economic condition could ever provide. And the working conditions are comparable to the US.
Agreed, but keep in mind that by World standards, Mexico is an upper-middle income country. Not exactly woefully crappy, but still, I suppose, poor compared to the US. What I had in mind were Cambodian girls of 15 who work long hours in some sweatshop sewing baseballs for $2/day for a company that is a subcontractor for Walmart. Exploited? Sure. But the alternatives for many them are to pick trash at the dump or to be a prostitute. I'd rather have the baseball, thanks.
 

CaptainObvious

Son of Liberty
V.I.P.
#7
Agreed, but keep in mind that by World standards, Mexico is an upper-middle income country. Not exactly woefully crappy, but still, I suppose, poor compared to the US. What I had in mind were Cambodian girls of 15 who work long hours in some sweatshop sewing baseballs for $2/day for a company that is a subcontractor for Walmart. Exploited? Sure. But the alternatives for many them are to pick trash at the dump or to be a prostitute. I'd rather have the baseball, thanks.
I don't know about the comparison with other countries but in going across the border often ever since I was a kid I can say it is horrible. And it's getting worse.

I agree with you in that respect though, there certainly are examples of exploitation around the world.
 

Gavik

Registered Member
#8
Since we all seem to be taking this "poll" seriously, let's break it down.

We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.
Right here we're off to a bad start. Did they administer a test to categorize the participants into political groups? It sure doesn't sound like it from the sub header of "Self-identified." Such a quiz, while most likely unable to accurately portray political feelings, would at least give a standard for the labels.

The system used here though, is completely trivial. Political leanings are dependent a number of non-economic issues. Asking respondents about their "economic leanings" would have helped accuracy. Even then though, feelings on economic policy are not a linear spectrum, and the labels given as choices can mean any number of things to anyone.

Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.
What the hell does "flatly unenlightened" even mean? According to who? When? Where?

And then there are the actual questions:

Consider one of the economic propositions in the December 2008 poll: "Restrictions on housing development make housing less affordable.

Basic economics acknowledges that whatever redeeming features a restriction may have, it increases the cost of production and exchange, making goods and services less affordable. There may be exceptions to the general case, but they would be atypical.
Restrictions? What? Did you mean building codes? Standards? Regulations? Words that are actually used when talking about the government passing laws on housing?

Word play aside, what is included in their definition of Restrictions? Not building on unstable ground? Not using lead paint? Making the ceiling a certain height? I fail to see how any of the demands an increase in cost. Perhaps zoning issues could force a developer to develop more expensive land, and of course there are other issues as well. Fact is though, the question is poorly worded and thus misleading.

A better thing to ask would be "Do government mandated quality standards increase cost?"

Therefore, we counted as incorrect responses of "somewhat disagree" and "strongly disagree." This treatment gives leeway for those who think the question is ambiguous or half right and half wrong. They would likely answer "not sure," which we do not count as incorrect.
If this was their grading standard, then the answers should have been limited to "yes," "no" and "not sure."

Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree).
This is a history question. It has nothing to say on a person's understanding of economics.

3) Rent control leads to housing shortages (unenlightened answer: disagree).
This question might be legitimate if "leads" was changed to "contributes."

5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree).
I'm gonna skip past the the fact that this is not an economics question and is completely subjective to opinions on things like the definition of "exploited" and simply ask: What planet are they living on?

6) Free trade leads to unemployment (unenlightened answer: agree).
Would the right answer be that it completely eliminates unemployment? Ridiculous question.

7) Minimum wage laws raise unemployment (unenlightened answer: disagree).
No, Minimum Wage just binds companies to spend more on salaries. It says nothing about how they have to deal with this new budget factor. Firing some people is simply a typical response, as is raising prices or cutting other costs.

These questions are either misleading, irrelevant or woefully over simplistic - sometimes all 3.

Take the logic of the minimum wage question and apply it to a health care topic. It could asked, "Does a single payer system increase taxes?" They'd say that since such a system requires the government to spend more, it would necessarily have to tax more to make up for it. The reality is that such a scenario is grossly over simplified and ignores not only other factors but other options, such as not paying to jet "terror suspects" to third world dictatorships and torture them. But of course, for answering "no, it does not raise taxes," I would be labeled "flatly unenlightened." Charming.

The terminology used in this article is dripping with bias and self-righteousness. "Enlightened?" Was I asleep when Jesus came back and gave the secrets of economic success to libertarians?

Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.
Translation: "The people I disagree with are idiots and cause all the problems. If people like me ran things the world would be perfect."

Finally, the Headline and picture have literally nothing to do with the topic, study or article. 5th graders aren't mentioned once. It's simply there to hint that the intelligence of these "liberals," who are "flunking" economics is below that of a 5th grader's.
 
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