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The Left and Economics

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"The Left and Economics"

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According to Zeljka Buturovic and Dan Klein, people who self-identify as “progressive” have low levels of economic knowledge whereas those who self-identify as “libertarian” or “very conservative” rank very highly. For reasons suggested by Tyler Cowen, I think that conclusion is nonsense. But I do think they have the goods on the fact that people who self-identify with the left have some trouble grasping the interplay of prices and supply restrictions. Todd Zywicky pulls out these facts:

—67% of self-described Progressives believe that restrictions on housing development (i.e., regulations that reduce the supply of housing) do not make housing less affordable.
—51% believe that mandatory licensing of professionals (i.e., reducing the supply of professionals) doesn’t increase the cost of professional services.
—Perhaps most amazing, 79% of self-described Progressive believe that rent control (i.e., price controls) does not lead to housing shortages.

Zywicki, trying to make mountains out of molehills, calls the results “startling.” Speaking as someone who doesn’t believe any of those things and who actually writes on two of these issues frequently, I’m not even slightly surprised. I find the situation unfortunate, which is one reason I write on these topics. He then gets sarcastic and says “Apparently the existence of a ‘consensus’ among trained scholars on certain policy issues is less important on some issues than others.”

As best I can tell, his argument is that because many rank-and-file progressives have mistaken ideas about economics, it’s okay for conservatives to have wrong ideas about climate science. But I don’t understand why anyone would think that. It’s important for people to have the right ideas! Inability to see that supply-restrictions on housing raise the price of housing is a big problem. Inability to see that carbon dioxide emissions are leading to ecological catastrophe is a big problem. The good news about progressives is that actual policymaking in, for example, the Obama administration is not based on elementary errors of economic policy. Larry Summers, Peter Orszag, Tim Geithner and their key deputies all understand the situation perfectly well as do leading progressive political commentators like Paul Krugman. Unfortunately, the situation with climate science and the right is by no means parallel in this regard.

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