Everyone Is Smart At Something?

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Posted on : 6/08/2010 07:48:00 PM | By : Dann | In : ,

I guess some folks just aren't good at economics.

Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.
I'm not real keen on the use of gratuitous pejoratives to describe other groups.  We libertarians take more than our fair share of dirt in that regard.

And I think I would challenge the bias of the survey.  The questions were somewhat loaded to get a particular response.  More enlightened respondents might have more readily acknowledged that increased regulatory burdens must increase business costs and thus increase the costs to consumers.  The question is whether or not those increased costs result in other benefits to citizens.

Mandating the use of pollution control equipment on smoke stacks keeps our air clean.  There are obvious costs and obvious benefits.

Mandating state licensing of barbers restricts the number of new barbers.  Moderate competitive protections for existing service providers increases costs while occasionally providing negligible public benefits.

At the same time, the story does highlight one of the troubles with engaging some leftists in a conversation about sound public policy.  For some people, the word "corporate" is synonymous with "evil", "corrupt", and a host of other pejoratives.  The same folks generally do not understand that government regulations cost money and that it is consumers that end up paying for those regulations in the end.

This is the group that advocates a luxury tax on yachts and jewelry and then is surprised when American yacht builders lay off their workers and close their doors.  Then they complain when yacht building businesses blossom all across the Caribbean. 

Some level of regulation is clearly needed in the world.  There is no level of regulation that will result in the fantasy world that the economically illiterate believe will result from just the right level of stifling regulations and confiscatory taxation.  A modest amount of economics literacy would make it easier to discuss the former and dismiss the latter.

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