Saturday, December 12, 2009

Most people have good intentions

One thing I have a hard time tolerating is when I hear an activist speak about the secret evil intentions of their opposition.

How many times did I hear that George W. Bush was making all of his policy decisions to help the oil companies? What about Republicans who were "obstructing" the government health care plan in congress to help the insurance industry. From the right we hear people say President Barack Obama is purposely trying to destroy the American economy with welfare state programs.

The big assumption these people make is that the opposition agrees with them on economic matters. For example, that President Obama believes a government-run health care program would cripple the American economy and drive up costs because he wants to orchestrate a post-America totalitarian state. Perhaps he also dons Abe Lincoln's hat and twirls his mustache while tying women to train tracks.

But here's the rub - reasonable people disagree on some pretty big subjects. Economists are split pretty close to the middle on the impact of minimum wages. About half believe they help poor people by raising their income, the other half believe they destroy jobs that unskilled, impoverished people can hold.

But outsiders - most of whom haven't bothered to learn the issue in any great detail - say the other side is lying to cover a hidden agenda. The anti-minimum wage economists were bribed by corporations, they may say, or the pro-minimum wage economists are part of a secret socialist cabal.

Look at the rancor around the reputations of John Maynard Keynes and Milton Friedman in political discussions. Conservative activist David Horowitz includes Keynes' book "The General Theory of Employment, Interest and Money" on his list of 50 worst books of the 20th century. Conversely, the mere mention of Friedman's name is enough to bare the teeth of any sociology grad student.

But the economists aren't on board for either of those extremes.

Bradford Delong and Greg Mankiw identify themselves as students of both Keynes and Friedman, saying that although the two economists disagreed on some policy directions, both shaped our understanding of modern economics. Friedman picked up where Keynes left off and you need to read both to understand the world.

While Keynes and Friedman disagreed on a lot of policy decisions, they both shared the scientist's role of trying to find the truth. Both of them made political recommendations that they thought were in the best interest of everyone.

But sometimes good intentions aren't enough. The law of unintended consequences shows that very good people, with the noblest of intentions, can do some pretty terrible things.

Take socialist Julius Nyerere, the first president of
Tanzania. Nyerere, a former teacher, was a wise man of great integrity. His priority was to help the people of his nation - a rare leader in the corrupt African political world. Unfortunately, his collectivist policies destroyed the Tanzanian agricultural industry.

Nyerere is best remembered by his send-off from The Economist following his death in 1999:

“He was a magnificent teacher: articulate, questioning, stimulating, caring. He should never have been given charge of an economy.”
My favorite line from the 2008 presidential debates is when Barack Obama said that his opponent John McCain really does think his policies would help America, but "He just doesn't get it."

Funny, that's exactly what I think about President Obama.


  1. Which of Obama's policies, specifically, do you disagree with the most? (Just curious.)

  2. Instead of a specific worst one, let me give a typical one. Yesterday President Obama chastised banks for not loaning to enough poor people - people they have deemed too risky. This includes private individuals and small businesses.

    I'm not going to win any creativity points here, but this was one of the problems that caused the recession - the government commanding banks to make charity loans to people who can't pay them back.

  3. Any of the above mentioned paranoid wing nuts can also make a legitimate observation that Obama received hefty campaign contributions from the banks that he gave the most money to. "Obama is an evil corporate banker u guys!!!11!"

    It's awesome how vague figures and half truths can make up an entire movement. =/