January 16, 2008

Economic Illiteracy


How much of what people currently believe the role of the government should be is based on a faulty sense of economics?

For example, I have a friend who will admit that raising the minimum wage will likely raise unemployment as well. It's a simply economic principle. But, his contention is that it is still worth it.

I can appreciate that viewpoint even though I disagree with it, because it's honest. It's the people who say we can raise the minimum wage, and everyone will make more money with no consequences that drive me crazy.

Why are most economists conservative? Are they all inherently greedy? Or are they simply more aware of the effects of fiscal policy?

3 comments:

Steve said...

Maybe certain professions attract people who think in certain ways to start with. While it's a small sample, most of the sociology majors I knew were on the other end of the spectrum.

Sabai said...

i think you're probably right, steve. I heard a funny quote recently that said that there's more communists on Harvard's faculty than in all of Eastern Europe. Much of higher academia is indeed liberal.

But, my point is, that those who study the effects of money, monetary policy, and federal regulation, tend to favor the benefits of a limited, conservative policy.

Just as I give biologists the benefit of the doubt when they're telling me about a study of mitosis, why do we listen to politicians over economists when they talk about fiscal solvency?

chris said...

Maybe they are conservative and/or greedy because on the whole they make three times as much as the blue-collar guy?