Government by Fallacy

Columnist E.J. Dionne in the Washington Post:

Yet the drumbeat of propaganda against government has made it impossible for the plain truth about the stimulus to break through. It was thus salutary that Douglas Elmendorf, the widely respected director of the Congressional Budget Office, told a congressional hearing last week that 80 percent of economic experts surveyed by the University of Chicago’s Booth School of Business agreed that the stimulus got the unemployment rate lower at the end of 2010 than it would have been otherwise. Only 4 percent disagreed.

So when conservatives say, as they regularly do, that “government doesn’t create jobs,” the riposte should be quick and emphatic: “Yes it has, and yes, it does!”

The first problem with Dionne’s argument here is that it is what I call an expert fallacy. Just because a majority of a group of experts believe something, it doesn’t make it so. Majorities of experts have been wrong many, many times. I’m more interested in the actual case. Why do some experts believe it and some don’t?

On the Mercatus Center blog at George Mason University, Matt Mitchell posts more problems with Dionne’s argument. Doing his homework on the survey, something Dionne and his editors should have done, Mitchell finds that the survey responses aren’t as clear-cut as Dionne suggests.

On February 15, they [Booth Survey] put two statements to the panel and asked them to respond. The first statement reads:

Because of the American Recovery and Reinvestment Act of 2009, the U.S. unemployment rate was lower at the end of 2010 than it would have been without the stimulus bill.

It is true that, of those surveyed, 51 percent agreed and 29 percent strongly agreed with this statement. Some of the comments from those who agreed with this statement are telling. Anil Kashyap of Chicago for example wrote, “But this is an incredibly low bar.” And Darrell Duffie of Stanford wrote, “Subsidizing employment leads employment to go up, other things equal. Adverse impacts through growth incentives might take time.” These statements (and others) suggest that perhaps the question was overly-narrow.

Thankfully, IGM probed further. They asked the economists to weigh in on a second statement:

Taking into account all of the ARRA’s economic consequences — including the economic costs of raising taxes to pay for the spending, its effects on future spending, and any other likely future effects — the benefits of the stimulus will end up exceeding its costs.

This time, when the economists were asked about the longer-run, total effects of stimulus, they were much more equivocal. Less than half agreed or strongly agreed with the statement, 27 percent were uncertain, and the rest either disagreed or had no opinion. A number of respondents noted the uncertainties involved. Nancy Stokey of Chicago summed it up nicely, writing, “How can anyone imagine this question is answerable, given the current state of economic science?”

Problem 1: The statement that Dionne refers to may have been too narrow. Even some of those who agreed with it may not agree with for the reasons Dionne supposes.

Problem 2: Dionne didn’t mention the results of the second statement of the survey. When asked if the benefits of the stimulus will end up exceeding the costs, less than half agreed. Had Dionne presented the result of this question as well, would it have helped or hurt his point?

We should expect better from folks like Dionne. Not doing your homework and presenting a slanted and narrow view of a survey is lazy, especially for a professional.

I encounter bad form in my part of the political spectrum as well. I’m going to make a point to try to remember to post something about it when I see it.

But, I do have a double standard. I am pickier about the logic of the other side. I have a very good reason to be.

I ask nothing of Dionne, except to use better logic. But that’s only a request. He’s free to ignore it.

Yet, Dionne asks a great deal from us. He wants to force us to approve handing over very large sums of our money to bureaucrats so they can spend it how they see fit, based on his fallacious and narrow argument.

When people want to force me to do something that I don’t believe works, I’d like them to take the time and care and build a sound case.

When someone on my side of the political spectrum uses fallacy, it’s not usually to rationalize handing our freedoms over to bureaucrats.

(H/T to Russ Roberts at Cafe Hayek for the Dionne article and the Matt Mitchell blog post).

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