One-handed economics

Harry Truman once begged for a one-handed economist. “All my economists say, ‘on the one hand…on the other’” When a president bills himself as a plain-talkin’ no-nonsense kind of guy, you could be understandably sympathetic to the president. When you’re an economist you know that no president is really that no-nonsense. It’s not simply that economists don’t know what they’re doing; some of that is true, but it’s a small part of the story. The main part of the story is that there’s not one clear goal for an economist serving in an advisory capacity.

On the one hand, presidents ultimately make the decisions, and economists know what their goals are. Call me cynical (and I’ll call you naive) but the goals that presidents work towards are not in general “good” goals. The banking-financial lobby, the military-industrial complex, and other similar groups are generally higher on the list of priorities than ordinary citizens. I don’t think most presidents do this out of malice; it’s just that they conceive the interests of the country in general to be served by promoting powerful groups. That’s how their vision of society works. Economists tell presidents how best to implement the goals they (presidents) have.

On the other, economists have a better idea than politicians do about what is going to promote the general welfare, so after telling presidents one thing they do the responsible thing and tell them another. I’m not saying economists are always right. They have limited knowledge of the state of the world just like everybody else does. (They have theories to tie the bits they do have together better than most people, but they can still make mistakes.) Moreover, many economists—especially the ones in political circles—drink the same Kool-Aid that politicians do and identify the interests of the politically-powerful classes with the interests of the country as a whole. But I am saying economists are more likely to know how to better serve the general welfare than presidents, better equipped to judge the real effects of government policies, and less influenced by poll numbers to make rosy predictions.

Frankly, the one-handed economist might be the last thing politicians want.

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