Category Archives: Media

Economics Can Help Explain Conspiracy Theorists

There is a lot of conspiracy theory garbage floating around. On January 6, it took a violent turn. Five people died in a coup attempt at the U.S. Capitol, over obviously false claims of a stolen election. It is important to understand what causes this behavior in order to prevent future violence, and to prevent a future breakdown of liberal institutions. Over at Fortune, I explain that a little bit of basic price theory can improve our understanding:

If you think of irrationality as a consumer good, much like a car or a television, you can better understand why people sometimes say and do crazy things. Think of it like this: People buy more cars and televisions when they are cheap, and fewer when they are expensive. 

This logic applies to conspiracy theories.

Read the whole thing here. For readers interested in further exploring the economics and evolutionary psychology of conspiracy theories, I recommend Bryan Caplan’s book Myth of the Rational Voter and Michael Shermer’s book The Believing Brain.

Politics by Meme

Here is a political meme that has been making the rounds on social media:

No photo description available.

I agree with this one of this meme’s main points–the federal government spends too much on corporate welfare. But its numbers are way off.

  • The biggest tax most $50,000 earners pay is the 15.3 percent FICA tax, which pays for Social Security and Medicare. That’s $7,650 on a $50,000 income, and it isn’t in the meme’s list.
  • Medicare, at 2.9 percentage points of the 15.3% FICA tax, costs $1,450 on a $50,000 income, not $235.81–plus premiums, if applicable. The meme is wrong here by more than six-fold. Not six percent, six-fold.
  • Spending $4,000 on corporate welfare implies that about 8 percent of national income goes to corporate welfare, or about $1.7 trillion. The actual figure is likely between $100 and $200 billion–a precise figure is impossible due to a lack of government transparency, and disagreements over definitions. Even allowing for substantial wiggle room, here the meme is off by as much as 10-fold. That is an entire order of magnitude.
  • A $50,000 earner spending $247.75 on military spending implies a military that spends more than $1 trillion. That is about $300 billion higher than the actual figure. The meme is wrong here by almost half. Though to be fair, much military spending is corporate welfare, and is unnecessary for national security besides.

Again, this meme makes a point I agree with about corporate welfare. It confirms my priors. But it does so dishonestly. Its numbers are wrong, often by multiples. And its errors all favor the point it tries to make. That one-sided tilt means its mistakes are probably not just random error. Whoever made it is hurting a good cause.

I’ve said it before, and I’ll say it again. Politics-by-meme is harmful. Do not engage in it. Political memes are as bad as cable news. Their numbers are often dodgy. Their primary accomplishments are feeding confirmation bias while intensifying people’s unhealthy tribal tendencies to affirm one’s in-group affiliation while vilifying out-groups. Political memes add heat without light at a time when the opposite approach is badly needed.

James Grant – Bagehot: The Life and Times of the Greatest Victorian

James Grant – Bagehot: The Life and Times of the Greatest Victorian

Grant finally settles the question of how to pronounce Walter Bagehot’s name (BADGE-it). Maddeningly, he does not do this until the end of the book, leaving the reader unsure to pronounce it in their head for more than 300 pages. Even so, he has written an excellent biography of Bagehot, a prominent 19th-century English banker and economist who favored free trade. He was not the founder of The Economist, though he became its longtime editor and made the newspaper (actually a magazine) into the prominent, and generally classically liberal publication it remains today.

At times Grant seems more interested in the history of English banking than in his ostensible subject, and at times the text bogs down because of it. But he still finds the time to give a good sense of what Bagehot was like as a person. His family life was mostly happy, though not entirely so. He also worked long hours at a frenetic pace, often writing 5,000 words or more per week, every week, on a wide variety of topics. This was in addition to editing and managing a newspaper, commissioning articles, and trying to have some semblance of a home life.

Unlike some of the grandiose, difficult personalities whose biographies I’ve been reading lately (Frank Lloyd Wright, Thomas Edison, Jay Gould, et al), Bagehot seems to have been a good person. He was overworked and often frazzled, but he was a decent family man and didn’t have an extravagant lifestyle, outsize ego, or a need to create drama.

Grant also puts Bagehot in his place as an important figure in the birth of modern finance, journalism, and economics; Bagehot had a place in all three. Only with the beginnings of the industrial revolution did the population become wealthy enough to support full-time journalists. Before, say, Samuel Johnson, writers typically required aristocratic support. They also wrote for a mainly aristocratic audience, spoke to their concerns, and often echoed their points of view. They also did not produce fresh product every week.

Johnson was one of the first to write for a lay audience, and one of the first to make a living from them. This meant smaller per-copy revenues, made up for by selling more copies. This required the ability to print at an industrial scale, and a large middle class that can afford pamphlets and newspapers. This stage of economic development also required modern finance to capitalize. Bagehot began as just such a banker, became a journalist struggling to generate enough copy to print The Economist regularly enough to pay the bills, and to sell it to as many subscribers as possible. Even in London, the financial capital of the world, Bagehot could only wrangle a few thousand subscribers.

Bagehot was also one of the most prolific and eloquent voices in the era’s defining economic debate—free trade vs. protectionism. Bagehot took the free-trade side alongside Richard Cobden and John Bright, and it is for this that Bagehot is chiefly remembered today. The Economist, which more than a century later flourishes on a global scale, still retains Bagehot’s mostly market-liberal editorial voice, and even has a weekly column named after him. In today’s tide of rising tide of protectionism, nationalism, and populism, the world could use more Bagehots advocating for free trade in both quality and quantity.

Don’t Trust Political Memes, and Don’t Share Them

Think of this post as a public service message.

In some ways, memes are the 21st century version of the comic strip or the political cartoon. They can be quite funny, and they make their point in just a second or two. Memes have been a boon for comic-strip-style humor. Someone needs to fill the void left by Calvin and Hobbes and The Far Side, and a lot of people have ably volunteered. Anyone with a joke and basic computer skills can make a funny meme, and millions of people can share the fun. National distributors no longer serve as gatekeepers and censors, allowing some unique talents to shine that would have remained dark just a decade or two ago. This has been a wonderful development.

But for many reasons, political memes are typically riddled with factual errors and offer little more than confirmation bias. They should be shunned, not shared.

Here is a quick statistics lesson from one political meme I saw making the rounds recently. That’s not to pick on this meme specifically. There are millions like it, just as bad, floating around the Internet. This is just one I happened to see, though I should note that Turning Point USA has a poor reputation, even by its genre’s low standards.

Also keep in mind that this meme is on the correct side of its issue. Imagine how wrong the wrong ones can be! As Frederic Bastiat wrote, “The worst thing that can happen to a good cause is, not to be skillfully attacked, but to be ineptly defended.”

Here is the meme:

turning point meme

Here is a list of things it gets wrong.

1: This meme is undated and cites no sources.

2: There is no publication titled “World Economic Freedom Index.”

3: For indexes that do exist, their data do not go back 60 years. They go back to 1970 for the Fraser/Cato index, and 1995 for the Heritage/WSJ index.

4: Venezuela does rank 179th in the 2018 Heritage/WSJ index. But it gives no rankings from roughly 60 years ago. If the 4th place figure comes from a different index, that is not a valid apples-to-apples comparison. But we don’t know where that figure comes from. None is cited. Google doesn’t turn one up, either. For all we know, some intern could have just made it up, and now people are sharing it.

5: Hugo Chavez was first elected in 1998. His brand of socialism was 14 years old when Turning Point USA was founded in 2012, not 10 years before this undated meme was created.

That’s five errors in one meme that took less than ten minutes to dig up. That says more about Turning Point USA and political memes in general than it does about Venezuela’s ongoing tragedy.

Don’t trust unsourced political memes, don’t share them, and take people who heavily rely on them as seriously as they deserve–even, or especially, if they share your ideological priors.

Breaking News

The Hill: John Bolton: ‘I will not be shaving my mustache’

Breaking News

Politico: Trump says he will hold press conference soon

A Really Slow News Day

Headlines from some of today’s most-read stories at Politico:

Bo Obama turns 7! A look inside the first dog’s fetching life

The GOP Is Throwing Away Millions of Dollars
(trillions is more accurate – ed.)

And one story that would make for a rather speedier news day if the headline was literally true:

Chris Christie returns from the dead

The Politics of SpongeBob

Two unrelated news stories caught my eye this morning that capture the depth of today’s political discourse. The first is a Politico story explaining, apparently in all seriousness, why SpongeBob Squarepants is becoming a Republican icon. In the name of balance, the story even includes a negative quote from Al Sharpton, presented without irony.

In the second story, a wit presented HHS Secretary Kathleen Sebelius with a copy of Websites for Dummies at an event, as a tactful reminder of the difficulties her department has had getting various insurance exchange websites to work properly.

This is why I work in policy, and not politics.

How Not to Write a Lede

In journalism, the lede is the first sentence or two of a story. It’s spelled that way to disambiguate it from the various meanings of the word “lead.” The lede’s job is to summarize the story as succinctly as possible while inviting the reader to read further. Some ledes, however are better than others:

SPOKANE, Wash. — The Spokane City Council will discuss a proposed ordinance that would make unlawful public exposure a criminal misdemeanor on Monday night.

Taken literally, if you feel like engaging in some good-old-fashioned public nudity in Spokane, don’t do it on a Monday. Wait until Tuesday. Or, if it’s Sunday night, hurry up and get out there! Unfortunately for exhibitionists, one doubts this was the reporter actually meant to say.

Getting Buchanan Wrong

The New York Times obituary for James Buchanan is up. The opening paragraph contains a whopper of an error:

James M. Buchanan, a scholar and author whose analyses of economic and political decision-making won the 1986 Nobel in economic sciences and shaped a generation of conservative thinking about deficits, taxes and the size of government, died on Wednesday in Blacksburg, Va. He was 93.

The author of the piece, Robert McFadden, might be surprised to learn that in 2005 Buchanan wrote a book titled Why I, Too, Am Not a Conservative: The Normative Vision of Classical Liberalism. McFadden also might be surprised to learn that there are more than two political philosophies. Just because someone is not progressive doesn’t mean, therefore, they are conservative. Buchanan self-identified as a classical liberal, which is a philosophy distinct from both progressivism and conservatism, and has roots reaching as far back as ancient Mesopotamia.

The strict binary view of politics held by most journalists might be convenient for creating compelling election campaign stories. But it is sorely incomplete, and does readers no favors as far as imparting any actual understanding of the issues.