How am I supposed to know whose economic plan is best?

Escape Artist · Sep 6, 2012

I know zip about economics - I absolutely loathed that class in high school - so how the heck am I supposed to know who to vote for?

In the past, I've always voted Republican, mostly because my parents did and because I agreed with them on social issues - I thought abortion was wrong, that marriage should be defined as man and woman, etc. but now my views on those things have changed. I no longer feel I have a right to tell another woman what she can and cannot do with her body. I no longer feel it's fair to deny homosexuals the same right to marry as I've got. So, on the social front, I align much more easily with the Democratic party, as they are usually the party associated with pro-choice and equal rights for homosexuals. I've also come to realize that environmental issues are important, and not just something to be swept under the rug. (By the way, much of these dramatic changes in my thinking have come as a result of my recent stepping away from any and all religion, just to give you guys a little background as to why I've had such an about-face from my previous beliefs...)

That being said, when it comes to money, I have no idea whose plan is best. To me, if the wealthy are taxed more heavily (and those wealthy own a large company) then it'll just mean that they'll pass the cost on to me as the consumer. They're used to living a certain lifestyle, so they'll just jack up their prices to maintain that level.

Sure, in the abstract, I think it's only fair that they're taxed a little more since they can afford it, but I just don't see how it'll have the results promised. Am I misguided in this thought process?

Can anyone explain to me in prole terms why Democrats feel that taxing the wealthy more heavily will help me? The little man? Er, woman?

Thanks!

Escape Artist · Sep 6, 2012

I hope this post doesn't count as wanting to be spoonfed, ala the "Read This" sticky above. If so, let me know. I've just never seen anyone on TV or anything bring up this thought I've had as far as businesses just passing the cost on to consumers...

Xelebes · Sep 6, 2012

Vote with what you know and not what you don't know. Right now the economic plans being offered up are both rough-shod and incomplete. Someone believes taxes cut will suddenly create jobs. Someone believes tax raises will make the revenue side of government sound. Truth be told, they know as much about economics as you do.

What folks in the finance sector tell me: the investment side needs a haircut to cut the vacuous sloshing (remember Facebook's IPO fiasco?) and get people demanding stuff that they need (food, clothing, shelter.)

What folks in the real estate sector tell me: build rentals. Too many mortgages, not enough mobility.

What folks in the construction sector tell me: go where the jobs are. Always has been the motto of the construction industry.

kuwisdelu · Sep 6, 2012

I just vote by the shades of their ties.

Al Stevens · Sep 6, 2012

You'll learn more about the opposing sides to the economic debate from history than you will from speeches and commercials. What worked in the past? What didn't? What were the relevant circumstances? How does that relate to what's happening today?

I've always favored the candidate whose agenda was more about creating jobs than that of the opposition. None of the other recovery strategies mean squat if people aren't working, spending, investing, and paying taxes. Start by treating the cause, not the symptom.

JoyceH · Sep 6, 2012

Escape Artist said:
That being said, when it comes to money, I have no idea whose plan is best. To me, if the wealthy are taxed more heavily (and those wealthy own a large company) then it'll just mean that they'll pass the cost on to me as the consumer. They're used to living a certain lifestyle, so they'll just jack up their prices to maintain that level.

Sure, in the abstract, I think it's only fair that they're taxed a little more since they can afford it, but I just don't see how it'll have the results promised. Am I misguided in this thought process?

Can anyone explain to me in prole terms why Democrats feel that taxing the wealthy more heavily will help me? The little man? Er, woman?

Thanks!

Okay, look at your premise. When the wealthy are taxed more, prices go up. When they are taxed less, presumably, prices go down.

Thing is, that's a premise that can be subjected to proof, because we've tried it both ways. Bill Clinton raised taxes on the higher brackets. Did prices go up? Did unemployment increase, as the GOP swore would happen? George Bush lowered taxes on the higher brackets. Did prices go down? Did unemployment go down?

The answer is no, the GOP premise is FALSE. Prices and unemployment didn't go up under the Clinton era tax schedule, nor did they go down under Bush's tax cuts.

The only outcome of the rich having more money is that the rich have more money. And when you cut taxes to make that happen, you either have to go into debt or reduce services. If you reduce services, that causes hardship in the lower income brackets, and those are people who spend every dollar they receive because they have to. So reducing those services actually creates more unemployment, as the seniors and the disabled and all the people who depend on those services tighten their belts.

kuwisdelu · Sep 6, 2012

More seriously, I wouldn't trust either of them on the economy. No one really knows how it works. People pretend they do, but no one does, because it's based on human behavior, which has no natural laws, only tendencies which are inherently chaotic. Don't trust anyone who claims to "understand" the economy. Ever. And I would never trust any economic "theory" that's based on philosophy and assumptions and qualitative observations about human behavior rather than actual data and it's analysis. As for tax policies and the such? Ehhh, just look out for yourself and your own pocket. It's what everyone else does. The rich, in particular.

/cynic

rwam · Sep 6, 2012

It could be a moot point. The two candidates can talk all they want about their policies, but - unless the winner of the election enjoys a super-majority in Congress - it's highly doubtful said policies will ever materialize.

So, it basically comes down to deciding which power-hungry lobbyist-kissing multi-millionaire you think has a better shot at pulling this ox out of the ditch.

Don · Sep 6, 2012

kuwisdelu said:
More seriously, I wouldn't trust either of them on the economy. No one really knows how it works. People pretend they do, but no one does, because it's based on human behavior, which has no natural laws, only tendencies which are inherently chaotic. Don't trust anyone who claims to "understand" the economy. Ever. And I would never trust any economic "theory" that's based on philosophy and assumptions and qualitative observations about human behavior rather than actual data and it's analysis. As for tax policies and the such? Ehhh, just look out for yourself and your own pocket. It's what everyone else does. The rich, in particular.

/cynic

F.A. Hayek said:
The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

Or then there's Bastiat's long version.

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause - it is seen. The others unfold in succession - they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference - the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee.

LAgrunion · Sep 6, 2012

I think economics is one of those fuzzy areas where many people think they know what they're talking about, but they really don't. An economy is so complicated, with so many factors and causations in effect, that it seems like a chaotic system (similar to the weather). I don't know if we can ever figure it out in any meaningful way.

The economy is cyclical; it goes up and down. There are long term structural issues. Sometimes it takes a long time for effects to be played out.

Unlike many folks, I don't link the economy to politicians like the President. I don't credit Bill Clinton for the good economy; I don't blame Obama for the bad economy. Credit or blame really comes down to accidents of history. When a new President comes in, the economy for the next four years is largely on a trajectory shaped by events prior to inauguration. There is only so much a President can do to alter course.

Strictly speaking, we don't live in a democracy, but a republic (i.e. the populace votes for representatives who run the country). I find it overwhelming to understand all the issues. My preference is to vote holistically. Find someone who seems smart, makes good judgments, and shares your values, then vote for him/her. Let them figure things out and make decisions - that's their job.

I guess that is a long-winded way of saying that, like you, I can't figure out all the economic issues either. Vote for whom you trust and hope for the best. Probably not a very useful or wise answer, but it's all I can muster.

ETA:

I just realized that, while I was busy writing my post, kuwisdelu already said what I wrote. Damn, I'm so slow that my posts often become obsolete. Sorry about the redundancy.

MattW · Sep 6, 2012

Coin flip.

except that no matter heads or tails, you cut the coin in half and send it to Washington.

kuwisdelu · Sep 6, 2012

Don said:
Or then there's Bastiat's long version.

I take issue with the notion that there exists such a thing as a "good economist."

kuwisdelu · Sep 6, 2012

I can't speak for anyone else, but I should note that I was using the mathematic definition when referring to the economy and human behavior as "chaotic."

rwam · Sep 6, 2012

LAgrunion said:
I think economics is one of those fuzzy areas where many people think they know what they're talking about, but they really don't. An economy is so complicated, with so many factors and causations in effect, that it seems like a chaotic system (similar to the weather). I don't know if we can ever figure it out in any meaningful way.

The economy is cyclical; it goes up and down. There are long term structural issues. Sometimes it takes a long time for effects to be played out.

Unlike many folks, I don't link the economy to politicians like the President. I don't credit Bill Clinton for the good economy; I don't blame Obama for the bad economy. Credit or blame really comes down to accidents of history. When a new President comes in, the economy for the next four years is largely on a trajectory shaped by events prior to inauguration. There is only so much a President can do to alter course.

Strictly speaking, we don't live in a democracy, but a republic (i.e. the populace votes for representatives who run the country). I find it overwhelming to understand all the issues. My preference is to vote holistically. Find someone who seems smart, makes good judgments, and shares your values, then vote for him/her. Let them figure things out and make decisions - that's their job.

I guess that is a long-winded way of saying that, like you, I can't figure out all the economic issues either. Vote for whom you trust and hope for the best. Probably not a very useful or wise answer, but it's all I can muster.

ETA:

I just realized that, while I was busy writing my post, kuwisdelu already said what I wrote. Damn, I'm so slow that my posts often become obsolete. Sorry about the redundancy.

This is probably the best, most honest and non-partisan post we'll see in this thread.

Zoombie · Sep 6, 2012

I'm not sure if a political party can "fix" an economy, but I have seen them ruin it...

Diana Hignutt · Sep 6, 2012

A vote for either party is a vote for more bank fraud, and the destruction of the global economy...maybe....

Don · Sep 6, 2012

kuwisdelu said:
I take issue with the notion that there exists such a thing as a "good economist."

That's sorta Bastiat's whole point. It's impossible, particularly at the macro level, to foresee all the potential negative consequences of what appears to be a benign act, since that act forestalls literally millions of other individual choices.

We understand weather, but we sure can't control it. Does that mean there are no good weather analysts? No. It simply means there are no weather magicians.

There are no good economic magicians, either, but there are good analysts, who recognize that economic magicians are impossible. Bastiat was one. Hayek was another.

kuwisdelu · Sep 6, 2012

Don said:
We understand weather, but we sure can't control it. Does that mean there are no good weather analysts? No. It simply means there are no weather magicians.

I'd say weather is easier. It may also be inherently complicated and chaotic, but for the most part it's based on deterministic systems. Modeling the interactions of that complex of systems is quite difficult, but it they still obey natural laws. Humans, by contrast, are inherently non-deterministic.

There are no good economic magicians, either, but there are good analysts, who recognize that economic magicians are impossible. Bastiat was one. Hayek was another.

I also don't trust any analyst who doesn't have a solid understanding of probability theory and stochastic processes.

LAgrunion · Sep 6, 2012

kuwisdelu said:
Humans, by contrast, are inherently non-deterministic.

I'd argue that the entire universe, including human actions, is deterministic.

But I understand that, since most people believe in free will, few will agree with my extremist, hard-determinism philosophy (also precluding randomness).

RichardGarfinkle · Sep 6, 2012

LAgrunion said:
I'd argue that the entire universe, including human actions, is deterministic.

But I understand that, since most people believe in free will, few will agree with my extremist, hard-determinism philosophy (also precluding randomness).

Except that current theory is that the underlying physical structure of the universe (quantum mechanics) is probabilistic not deterministic.

Escape Artist · Sep 6, 2012

So probably I'm best off just sticking with what I know, and I know where I stand on the social stuff. It's how I've always voted before.

Well, like I said, I started out voting GOP just 'cause my parents did and then I realized I really did agree with the Republican stance on social issues so that then became the reason I voted GOP. It's just that my stance has changed.

As LAgrunion noted, I try not to associate a certain President with the state of the economy as I've been told by quite a few people, that often, it takes quite a while for a President's policies to go into effect, and that what that often means is that the President in office may be benefiting from (or taking credit for) the previous President's policies. But I was never sure how true that was.

As a side note, and completely off-topic, kuwisdelu, when I see "arbiter" in the little blurb below your username, I think of this guy, lol...

If ever we are invaded by an alien species, I hope they resemble these guys. He's quite attractive, imho. :e2kissy:

If that doesn't convince you that I'm a nerd, I don't know what will.

Xelebes · Sep 6, 2012

MattW said:
Coin flip.

except that no matter heads or tails, you cut the coin in half and send it to Washington.

So it's good to have yourself a half-penny because the IRS, for all its menace and tyranny, doesn't want to do anything with anything smaller than a penny.

LAgrunion · Sep 6, 2012

RichardGarfinkle said:
Except that current theory is that the underlying physical structure of the universe (quantum mechanics) is probabilistic not deterministic.

Yes, that's part of quantum mechanics (which I really don't understand).

My stubborn and perhaps unreasonable response is that humans think the universe is probabilistic only because, due to our finite intelligence and imperfect knowledge, we are not yet able (and may never be able) to understand all the rules that affect causation. Thus, what we see as randomness or probabilistic is really not.

What really, what do I know?

kuwisdelu · Sep 6, 2012

LAgrunion said:
Yes, that's part of quantum mechanics (which I really don't understand).

My stubborn and perhaps unreasonable response is that humans think the universe is probabilistic only because, due to our finite intelligence and imperfect knowledge, we are not yet able (and may never be able) to understand all the rules that affect causation. Thus, what we see as randomness or probabilistic is really not.

What really, what do I know?

Well, you wouldn't be without lofty company in that opinion. Einstein thought the same.

But for the moment, at least, quantum behavior is still best modeled by probability distributions.

RichardGarfinkle · Sep 6, 2012

LAgrunion said:
Yes, that's part of quantum mechanics (which I really don't understand).

My stubborn and perhaps unreasonable response is that humans think the universe is probabilistic only because, due to our finite intelligence and imperfect knowledge, we are not yet able (and may never be able) to understand all the rules that affect causation. Thus, what we see as randomness or probabilistic is really not.

What really, what do I know?

It has seemed to me the opposite that determinism is closer to our usual experience of the world. We formulated the idea of cause and effect by observation of the world at our level of perception (what Richard Dawkins calls the Middle World).

The world of cause and effect is easy to perceive and comprehend. It also fits the human psychology of wanting to use narratives to explain what happens and how it happens.

The probabilistic world of quantum mechanics is not visible to human experience and therefore we did not evolve to deal with it nor did we need to generate, until recently, models of the world that employed this understanding.

Note that the most common challenge to the idea of determinism is that of free will (wherein humans are exceptional beings in a universe of determinism). This is radically different from the challenge of a probabilistic universe wherein what we think of as the deterministic outcome is only the most likely outcome in a field of possibilities.

How am I supposed to know whose economic plan is best?

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