Don’t Know Much About…Much of Anything, Really

Mackenzie Weinger at Politico has latched onto a point that I’ve been making for years, now—the educations and backgrounds of our elected officials are inadequate, severally or corporately, for doing their jobs:

Almost 80 percent of lawmakers might need to crack open an economics textbook before the congressional recess ends, a new study on Tuesday suggests.

The vast majority of members lack an academic background in business or economics, according to a study by the Employment Policies Institute, a nonprofit group that takes a conservative stand on fiscal issues. Only 13.7 percent majored in business or accounting, and 8.4 percent have an economics degree.

“How many members of Congress have an academic background that provided them with a basic understanding how the economy works? The answer, it turns out, is not many,” the report concluded.

I’m afraid that the reality is much, much worse than the study finds or is being recognized. I think there’s very little reason to believe that many of our elected officials have taken math beyond high school trig (and that was a generation or so ago). I don’t believe that most of them have any clear idea of the difference between a million and a trillion. I don’t believe that they know the difference between the median and the mean. Not only have they no feel for business or economics, they’re lacking a feel for numbers or the workings of the natural world.

Most of the lawyers we’ve elected to office haven’t even practiced law to any great extent. Check my analysis of the Illinois Congressional delegation for reference. By and large our Congressmen and Senators are career politicians and apparatchiks. We shouldn’t be surprised that they know little else and treat their jobs as lifetime appointments. It’s really all they know.

36 comments… add one
  • Icepick Link

    “How many members of Congress have an academic background that provided them with a basic understanding how the economy works? The answer, it turns out, is not many,” the report concluded.

    Given how poorly the economists have been doing with the predictions the last several years, what makes this group think that an ‘academic’ understanding of economics is worth a small pile of pig shit, much less anything more desirable? How many times just this year have pretty much ALL the economists missed the downward moves in the economy? (Zero Hedge has fun with this just about any time something ‘unexpectedly’ comes in lower than EVERY forecast.)

  • Drew Link

    You seem to be in one of your “funks,” Dave. Look, Reynolds has no facility with numbers or practical business experience other than the – as I call it – “rock star” economics. Very specialized stuff that comprises .0001% of the economy. But making a widget – the vast majority of the economy? Good luck; he has no clue. Yet you fancy him.

    Its time we jettison ideology and get to the practicality of the issues we as a nation confront. Do we want to grow the economy and employ people…….or give platitudes to “fairness,” while raping the rich in the name of the poor for political gain and feeling good that we played Robin Hood for a day……..while it just doesn’t work over time in the real world. It just doesn’t work.

    So we can put our best dress on, go to church, the club, the local watering hole or whatever and tell everyone who will listen that we are “good,” because we “care” for the poor and are going to punish the job creators in the name of said. Or we can get our heads out of our ass and realize that the the dependance is a manifest and enduring characteristic of our society. Its inevitable, but it shouldn’t be encouraged.

    It reminds me of a line from some Jack Nicholson movie………”you can’t handle the truth.”

    No we can’t, at least the left. And convenient fiction has its attendant problems. We are now broke.

  • Damn, Drew. That sounds like Gilded Age rhetoric.

    Where’s my company store? Let me sign up.

  • You seem to be in one of your “funks,” Dave.

    Part of it is being forced to deal with lawyers with room temperature IQs. I’m used to cleaning up other people’s messes—it’s a lot of what I do for a living. I’m not used to paying for the privilege.

    Going back to the material in the body of the post, I don’t think that everybody in the Congress needs to be an economist or a Fortune 500 CEO. But a little more diversity of experience would be nice and we’re altogether over-represented with lawyers and lifelong politicos in the Congress these days.

  • michael reynolds Link

    We have the pols we’ve chosen to deal with the issues we’ve promoted to the top spots on the agenda.

    Economics doesn’t get headlines until something goes wrong. So long as we were floating on bubbles no one cared. (That certainly included me.) The country has been obsessed with social issues — abortion, gay rights — and foreign policy — wars, terrorism. Even environment has outranked economics.

    We elect people we think will represent our points of view on the hot button issues. Change the hot buttons and eventually we’ll swap out the old crew for a new one — too late to do any good, of course. So it goes back to the voters, inevitably.

    People aren’t generally good at numbers. (They aren’t actually any good at more philosophical issues, either, but they think they are.) The situation isn’t helped when any random assortment of economists appearing on any random TV show will give us a range of opinions from which no consensus may be determined. Of course we rely on experts –and when the experts don’t know, we’re adrift.

  • michael reynolds Link

    Drew:

    I’ll bet I can guess why Dave “fancies” me: Dave already knows how to think like Dave Schuler; he doesn’t know how to think like Michael Reynolds. (That and we share a certain strangeness of experience.) It happens to be the exact reason I fancy Dave and his blog. It’s interesting, it’s educational, it’s kind of exciting to encounter bright minds who have a different perspective. He makes me think and I like being surprised by new ideas.

    I have never denied my innumeracy. In fact I’ve equated my number skills with those of house plants and Labrador Retrievers. The vast majority of Dave’s economics posts go right past me. Zoom. But they leave a residue behind. Whether that will ever translate into a deeper level of understanding on my part, I don’t know. I suppose if I ever had some free time (scheduled for late 2014) I could wrap my head around some of it. Am I ever going to know what Schuler knows about economics? God no. He’s beyond book learnin’, he’s off into the realm of natural talent and the kind of love I’ll never have for the subject. (Then again, he’s probably not going to suddenly know how to build a 3000 page book series, nor want to.)

    I know I come across too often as tendentious, and that’s fair enough. But that’s not my purpose. I’m educating myself, and not always in the most polite way. I’m sure most people assume that my work revolves around a lot of boy meets girl and familiar plot tropes. Of course that’s true in part. But I also feed on ideas and transmit those ideas to readers. I’m almost absurdly hungry for data, for ideas, for unexpected views. The bitch is there’s no way for me to know what, exactly, will be useful, so I troll. I’m writing three book series simultaneously and working on a fourth. Round numbers that’s about 1,200 pages a year actual edited book — not counting intersticial material, promo material, presentations, supervising transmedia elements, doing interviews, pitches, touring, even designing logos. That’s what’s coming out one end of the pipe. Something has to go in the other end of the pipe.

    So I’m using this blog and Dave’s good offices to learn. From my perspective he’s teaching an extended course and I’m a not-terribly-adept student, but for my purposes I don’t need deep knowledge just abstractions, concepts, prods. At the same time I don’t want to absorb bullshit, I want to test ideas, like a guy smelling the oyster before he eats it.

    This may irritate you, but you and Verdon and others contribute to my selfish educational process, too, both as sources of ideas, as testing grounds for rhetoric, and as characters. So with Dave’s kind indulgence I’ll keep coming here, innumerate as I am, and occasionally see whether I can find holes or weaknesses in other people’s thinking.

    By the way, Drew, you and Verdon have long-since become contributors to a character named Albert. (He’s not a bad guy, mostly. None of my characters are ever all good.) And Dave is a part of a guy named Vincent — he’s not in print yet. Beware writers: we use everyone we meet.

  • Beware writers: we use everyone we meet.

    Funny you should mention that. One of my wife and my dear, old friends (I was her husband’s best mine, he was mine, we are godparents to one of their children) has become a rather popular romance novelist. Not up at the highest echelons of the field, the next niche down.

    My wife has always been reluctant to read one of her books for fear of encountering herself or me in its pages.

  • Laurie Link

    Michael,

    As a fan of your blog comments I am curious about your work. I struck out on my 2 minute prework search. What books have you written?

  • Along with his wife Michael wrote the long-running series of young adult Animorph novels. Under the pseudonym “Michael Grant” he is presently writing the Gone series of young adult novels.

    His wife has a notable and award-winning writing career of her own.

  • PD Shaw Link

    I think the “study” is a bit unfair; it doesn’t include people who have actual experience in running a business. Plus, my Congressman has a business degree (BS-Finance) and I’m not terribly convinced that he has any greater economic insights than the average member of the professional class.

    Anyway, I’m reminded of Bastiat’s critique of social democracy (progressivism), as being premised on the infallibility of the legislator:

    “The strange phenomenon of our times — one which will probably astound our descendants — is the doctrine based on this triple hypothesis: the total inertness of mankind, the omnipotence of the law, and the infallibility of the legislator.”

  • Matt Link

    I think the main area of “expertise” the pols are lacking is in the practical, hands-on experience of having your own hard work and expectations thwarted by reality.

    This is part and parcel of learning almost any other craft—rejection letters, failed auditions, casual plumbing disasters or mild electrocutions, and running almost any small business come to mind—and provides a learning incentive like no other. Naturally, the ability to spin the blame to others dilutes this learning incentive to meaninglessness.

    Theoretical expertise, be it economic or otherwise, just isn’t sufficient to eliminate the real-world need for robust resilience in the design margin, and too many who place their trust in “experts” (including many self-described experts!) and who have been insulated from the personal consequences of their actions have lost sight of this perspective.

  • Maxwell James Link

    I think the professionalization of politics is a natural outcome of increasing division of labor. Everything else gets professionalized, so why not that too?

    Unfortunate in my opinion, but I’m skeptical much can be done about it.

  • sam Link

    @Drew

    Its time we jettison ideology and get to the practicality of the issues we as a nation confront. Do we want to grow the economy and employ people…….or give platitudes to “fairness,” while raping the rich in the name of the poor for political gain and feeling good that we played Robin Hood for a day……..while it just doesn’t work over time in the real world. It just doesn’t work.

    Cross-posted, and slightly edited, from OTB:

    I’ll tell you what I and many (most) others really think about that “philosophy”. Suppose Drew’s ideal were instantiated, and we returned to a pre-New Deal state of affairs. Many (most) of us think we’d also return to pre-New Deal levels of poverty and misery. But this would not faze Drew one whit. Oh, I’m sure he will deny it, but I don’t believe him. In his heart of hearts, he genuinely wouldn’t care. Nothing he has ever written in comments here or at OTB would lead me to believe otherwise. After all, he believes in the “laws of economics”, and under that intellectual regime, there are winners and losers. Far, far more losers than winners, truth be told, but, hey, that’s the natural state of affairs.The losers lose because they just can’t cut it. And it would be immoral for the government to attempt to help those losers by any “re-allocation of resources from the private sector to the state.” Sauve qui peut (rough translation: I got mine, fvck you).

  • Icepick Link

    Suppose Drew’s ideal were instantiated, and we returned to a pre-New Deal state of affairs. Many (most) of us think we’d also return to pre-New Deal levels of poverty and misery.

    Hate to tell you this, but this is happening UNDER the regime started with The New Deal. Or perhaps you have not noticed the last few years?

  • sam Link

    “Hate to tell you this, but this is happening UNDER the regime started with The New Deal.”

    Really? If you believe that, you are woefully ignorant of the history of that era.

  • Icepick Link

    If you believe that, you are woefully ignorant of the history of that era.

    Not really. And I think you are woefully ignorant of what’s going on now. People cramming in five to a car to “live” – in the summer, in Florida – is becoming more common. People reduced to living in de facto flop houses is becoming more common. Families doubling and tripling up is becoming more common. If you don’t believe me you are welcome to come to Pine Hills and I’ll give you the Grand Tour.

  • Drew Link

    Albert, er, uh, Drew, here.

    Michael, that was a fabulous comment. You see (get ready to cringe) you and I both come here to test ideas, to get faux bombastic and faux cross with commenters in an attempt to challenge and elicit the full views of others; have them hurl their best invective – and perhaps reasoning – against us, to test our assumptions. I’m a believer in getting past the nicey-nice….and taking the gloves off. Its a byproduct of my business and the decisions we face. But in the end its just mental gymnastics. Why on earth would one come here, otherwise?

    Dave runs a great site. I agree with him often, and am challenged and educated by him often. I disagree, at times violently……. sometimes. But I never leave this site feeling my time was wasted…………………except for the comments of small s sam.

  • Drew Link

    PS – and I wish I could say same about OTB. But it appears to me to be drifting into oblivion and irrelevancy.

  • sam Link

    @Icepick

    Let me understand you. You think that a world sans any safety nets — no Social Security; no Medicare; no Medicaid; no guaranteed emergency health care; very, very little in the way of any government assistance — is comparable to where we are now?

  • sam Link

    “But I never leave this site feeling my time was wasted…………………except for the comments of small s sam.”

    Well I can live with that.

  • Given how poorly the economists have been doing with the predictions the last several years, what makes this group think that an ‘academic’ understanding of economics is worth a small pile of pig shit, much less anything more desirable?

    Prediction and understanding how things work are not the same thing. This is part of the problem Dave is highlighting IMO. Does a biologist have much ability to predict what new species we’ll see? I’m extremely doubtful.

    Also, you might want to see some of the research on things like asset bubbles, predicting them is problematic. Predicting their behavior even more so.

    as I call it – “rock star” economics.

    You mean guys like Roubini who has predicted 48 of the last 4 recessions?

    Its funny how much traction these guys get when they get one correct, but then nobody bothers to check their overall track record. We had the same thing with that pollster…crap name escapes me. He got it right on the Bush-Gore election and on that single datum people thought he had some special prediction abilities.

    Actually that is how people think. The most recent data is given all the weight. If I were to accurately predict several stock prices for tomorrow people would think I’m great, would hang on my every word for days, probably weeks, maybe even months. Then they’d realize that one highly accurate prediction was a fluke and start ignoring me. If I were smart, I’d milk that “15 minutes of fame” for all it was worth. Going on talk shows, speaking here and there for money, and so forth. If I was completely lacking in scruples I’d then remake myself into a patron saint of not relying on people that get one hyper accurate prediction correct and try to grab another 15 minutes and more money. People are really, really crappy at collecting information, properly weighting it and then updating their beliefs based on empirical observations. We tend to rely on rules of thumb that when you are running around an African plain trying to dodge lions and leopards works well, but in our current society with more complicated information problems tend to stump most people (see for example things like the Allais paradox, Simpon’s paradox, the Ellsburg paradox, and the St. Petersburg paradox).

    Many (most) of us think we’d also return to pre-New Deal levels of poverty and misery.

    What does this mean? Are you talking recession levels of poverty and misery, or a more average concept. The New Deal was not implemented until well after the recession/depression was under way.

    And on what data are you basing this on? Data prior to WWII is hard to come by, and I’m thinking poverty data will be one of the hardest to find.

    So, I find the above comment not only full of ideology, but also quite possibly lacking in any empirical underpinnings.

    After all, he believes in the “laws of economics”, and under that intellectual regime, there are winners and losers. Far, far more losers than winners, truth be told, but, hey, that’s the natural state of affairs.

    One of the underpinnings of economics is that trade is mutually beneficial. As such the above claim strikes me as unsupportable without some sort of data.

    The losers lose because they just can’t cut it. And it would be immoral for the government to attempt to help those losers by any “re-allocation of resources from the private sector to the state.” Sauve qui peut (rough translation: I got mine, fvck you).

    Ahhh, this old chestnut. Here I’ll do my childish and petulant version of your philosophical world view:

    I can’t get mine, so I’m going to fvcking steal yours.

    There, now we are even. Since you can’t bring yourself to actually think I really believe that having a smaller government footprint would be, on the whole, welfare enhancing, I’ll just go ahead and assume the worst motivations your part too.

  • Dave…I really need a preview button. :p

  • PD Shaw Link

    @Maxwell James, I agree about the increasing specialization of labor creating a professional political class. I often wonder if you take the typical path to Washington D.C. (law school, a few years at the D.A.’s office, elected to small office and climb the ladder as opportunity arises), if you would have any socially valuable skills in the private sector after about say 10 years in Congress?

  • I think I’m more in agreement with Chesterton who wrote something to the effect that unimportant things can be left to experts. Really important things like marrying, child-rearing, and government we can only entrust to amateurs.

  • Icepick Link

    Let me understand you. You think that a world sans any safety nets — no Social Security; no Medicare; no Medicaid; no guaranteed emergency health care; very, very little in the way of any government assistance — is comparable to where we are now?

    What makes you think those safety nets are going to be their much longer? (Check out the downward trajectory in UE benefits in Florida, for example.) Or that they are effective? A helluva lot of people live in all kinds of crappy circumstances who either aren’t getting much help, or for whom the help is worthless.

    Not to mention that government isn’t the only safety net, then or now. I’ve been helped far more by family )& friends) than by the crooks running DC and Tallahasee. It’s not even close. But the guys running BoA? They’ve gotten PRIMO help from government.

  • Icepick Link

    Prediction and understanding how things work are not the same thing. This is part of the problem Dave is highlighting IMO. Does a biologist have much ability to predict what new species we’ll see? I’m extremely doubtful.

    Also, you might want to see some of the research on things like asset bubbles, predicting them is problematic. Predicting their behavior even more so.

    I’m not buying this. My wife and I knew there was a property bubble of epic proportions in 2005. We went house shopping, and in the process saw how much property had appreciated since 2000. That didn’t take a genius, or even an education in economics. But how many economists were running around saying “It’s different this time!”?

    More importantly, if economists can’t be expected to make predictions that have any predictive power, why do they have so much say-so on policy based solely on their models?

  • Icepick Link

    And I believe you’re thinking of pollster John Zogby, Steve.

  • Drew Link

    Stevie Ray, uh, Verdon….

    The “rock star” invokation has to do with the very specialized niche of commerce occupied by Reynolds, along with actors, sports icons and, well, rock stars……. I suppose they know their business.

    Don’t much care what they have to say about making plastic injection molded bottles and caps, steel axles……..or about 98% of the economy.

    I’d like to “do” Cameron Diaz. But do I care what the sweet young thang has to say about politics, business or finance? Nope.

  • Drew Link

    “I think I’m more in agreement with Chesterton who wrote something to the effect that unimportant things can be left to experts. Really important things like marrying, child-rearing, and government we can only entrust to amateurs.”

    Then I’m flummoxed. Our governmental finances are in such a state of shambles that they could hardly be described as anything but unimportant. Yet you openly associate yourself with political candidates who got us here.

  • Icepick Link

    Our governmental finances are in such a state of shambles that they could hardly be described as anything but unimportant. Yet you openly associate yourself with political candidates who got us here.

    And which third party candidate have you been voting for?

  • PD Shaw Link

    Drew, I think Dave is just restating his dislike of progressive Democrats, not all Democrats.

    It seems to me like we could be doing better with our elected officials, but that’s not the root of the problem: If we are going to operate under the (mis)assumption that the government runs the economy, then some knowledge of economics seems to be in order. If we are electing our legislators to handle more generalist concerns of public interest, then maybe a phonebook would work. There is probably some balance needed between pointy-heads and random schmucks, but its probably closer to random schmucks. I guess it depends on what you think the role of government is.

  • PD Shaw Link

    While I think Congress should be more diverse, let me make the case for the legislator-lawyer:

    1. The primary duty of the legislator is to pass laws, so understanding how laws are interpreted and evaluated by courts is an important skill. This is the reason why McCain is not a great legislator.

    2. Legislators are also representatives of their constituents. One description of a lawyer is legal representative. We’ve had some unique voices in Congress over the year that seem detached from this role.

    3. Legislators need to have people skills. Lawyers are practiced in the art of persuasion; I’ve seen too many masters of their business domain crash and burn at the simple task of pleading for a vote from the people. Would John Edwards ever say that was a stupid @$$ question?

    The downside to lawyers:

    1. They are professional generalists overconfident in their ability to master the important elements of other specialties.

    2. They are masters at finding, picking and using experts to advance their p.o.v.

    *3. They can also be overconfident in the role of the law to control outcomes in the real world. I’ve put an asterisk by this one since it may depend on area of practice. For example, I suspect Prof. Bainbridge has a well-developed sense of the shortcomings of law because the law of business organizations is premised on the notion that the rules need to make practical sense.

  • In all honesty I agree with you, PD. Right at the moment there is no lack of lawyers in the Congress. Whether they’re actually lawyers at this point or just lawyers by virtue of having graduated from law school and passed the bar sometime during the Carter Administration is another question.

  • Icepick Link

    The primary duty of the legislator is to pass laws, so understanding how laws are interpreted and evaluated by courts is an important skill. This is the reason why McCain is not a great legislator.

    This speaks more to the idea that each Member of Congress should have a lawyer on staff.

    More generally, why would we expect lawyers to do anything other than write laws that benefit lawyers? I linked to a story earlier discussing how we’re getting buried under laws and regulations in this country to the point were no one even knows what the Hell is legal anymore. We’re rapidly approaching the point where everything not outlawed will be mandatory. In other words, the lawyers are failing as legislators by writing too many crappy laws.

  • michael reynolds Link

    Drew:

    Don’t much care what they have to say about making plastic injection molded bottles and caps, steel axles…

    I am hurt that you don’t care about my opinions on plastic injection molded bottles. As it happens I had something really brilliant to say on the subject. But now, to hell with it.

    No! Too late. You had your chance.

  • I’m not buying this. My wife and I knew there was a property bubble of epic proportions in 2005.

    Icepick,

    Yes, I agree. But read what I wrote again. My comment can be restated as:

    1. We don’t know when an asset bubble will occur…except when we are in one and when most people realize it, the party is just about over.

    2. Once we are in one it is hard to predict what will happen. Many people think the following, “We are in a bubble, it will soon burst, asset prices will plummet, I could make alot by selling short.” Problem with this is that the market can stay “irrational” longer than your wallet–i.e. selling short in the middle of a bubble is not without its risks. Or to put it another way, the bubble can last longer than you think. Bubbles are non-standard market behavior, as such the old guide lines, rules, measures are no longer applicable, or hard to interpret. Case in point, many people probably felt that there was a bubble in 2005/2006, but it wasn’t until 2008 when the stock market took a nose dive.

    More importantly, if economists can’t be expected to make predictions that have any predictive power, why do they have so much say-so on policy based solely on their models?

    I’d argue that economics can really help with incentives. Much of economics today is about incentive problems. For example, what kind of incentives does a program like Medicare put into place? Does it depress savings, reduce healthy behavior earlier in life, does it increase risk taking in terms of retirement investments, particularly later in life?

    Predicting where the overall economy is going to go is just one small part of economics. Also, consider the difficulty in prediction for economists: suppose you develop a model and it tells you how things will look in the future with some degree of error built into the model. A policy maker type comes along sees the model notes that if you change variable X it has impact Y. So the policy maker advocates a policy that will “exogenously” change X. Problem is that such a policy might change the underlying model meaning that the expectation of an impact of Y no longer holds. This sort of endogeneity in a model makes prediction at the macro level tricky at best.

    Also, alot of macro models rely on historical data and a regime shift can make previous data of questionable worth. And by regime change I’m not talking about a political coup, or going from Democrat to Republican, but an exogenous shift in one of the underlying fundamental aspects of the overall economy. For example, in the post WWII period up until, the late 1990’s maybe the 2000’s recessions were often characterized by a sudden drop in employment (conversely a spike in unemployment) and then an off setting shift in the other direction. The last 2-3 recessions have not seen that. Unemployment remained stubbornly high and only gradually trended downwards. Why? I have no clue. Is it a technological innovation that allows a firm to lay off an employee and replace them with technology? I don’t know.

    So when one is doing modelling and forecasting it is probably more likely one will be behind the curve than ahead of it. I find this to be true in my own work which is much more narrow. I see something odd in a data series, call up another department, “What are you guys doing? Will you keep doing it? What is the ultimate goal?” Use that non-data information to adjust my forecast. Then the other department changes behavior–i.e. their initial answers to my questions no longer apply and my forecast looks like shit. In other words, the underlying data generating process is no longer the same as the one that gave you the historical data, and you don’t often notice until you see your forecast and reality diverging by a certain amount.

    TL;DR: take an forecast of the economy with a shovel of salt, alot can go wrong that renders that forecast suspect even 2 minutes after it is done.

    And I believe you’re thinking of pollster John Zogby, Steve.

    Yep, that is the one.

    I am hurt that you don’t care about my opinions on plastic injection molded bottles. As it happens I had something really brilliant to say on the subject. But now, to hell with it.

    No! Too late. You had your chance.

    Heh, thanks for the chuckle Michael.

Leave a Comment