Thursday, December 15, 2011

Progressivism and the "Expert" problem

Perhaps the central conceit of the Progressive movement is that people can be manipulated to behave better (aka incentivized) and that experts know how to do this.  Much of what has passed for 'Liberal' legislation and education over the past century has been based upon this central assumption.

Here, from Andrew Ferguson is the latest example of why Progressivism simply does not work using the 'Behavioral Economics' of Richard Thaler and Cass Sunstein as the example.  Disclosure:  Dick Thaler was a prof of mine at Chicago.  Money Grafs:

Behavioral economics is très chic. All the coolest economists are into it. It partakes of the obsession with social science that has lately gripped the country’s smart people, who exhibit a grinding need to quantify human behavior so that it will become more predictable, describable, and controllable. To meet demand, a steady flow of “studies” in human behavior passes through the sluice gates of university departments of accounting, psychology, marketing, sociology, business, and of course economics. From these the behavioral economists build vast edifices of theory and now, thanks to President Obama, public policy too.

The most salient of these policies was the Making Work Pay tax credit of 2009 and 2010. It was an essential element of the president’s famous $250 billion “middle-class tax cut,” which was slapped like a defibrillator onto the limp and supine figure of the American economy a couple years ago. The MWP was carefully designed according to the principles of behavioral economics, and now it seems not to have worked the way it was supposed to.

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