Can America’s failing economic policies be fixed? This answer depends on how willing economists and politicians are to work together, according to a new publication by Princeton’s Alan S. Blinder.
In his latest book, Blinder explains how economists sometimes overlook the human costs of best economic policy, while politicians often go to economists to reinforce their own preconceived ideas. But if politicians and economists could better work together, it could result in better policies the country so desperately needs.
A renowned economist, Blinder is the Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at the Woodrow Wilson School. He served as a member of President Bill Clinton's original Council of Economic Advisers and then as vice chairman of the Board of Governors of the Federal Reserve System.
His book, “Advice and Dissent: Why America Suffers When Economics and Politics Collide,” was published in March 2018.
Q. Why did you write this book?
Blinder: I was motivated by the “lamppost theory” and how politicians use economics the way a drunk uses a lamppost: for support, not for illumination. In brief, politicians from both parties routinely ignore the best economic advice, but sometimes accept the worst — if it accords with their political positions. This is not a recipe for success, to put it mildly. And fixing it requires many changes on both sides.
Q. What are the main takeaways of the book?
Blinder: There are many. One is that the worldviews of economists and politicians are so different that they can rightly be said to live in two different civilizations — civilizations that don’t communicate with each other very well.
Another is that the solution is not to (somehow!) get politicians to act like economists. First of all, they can’t and won’t. But perhaps more deeply, they shouldn’t and for many reasons. Among these is that economists dote on efficiency rather than fairness (whereas public attitudes are just the reverse). Another is that while politicians’ time horizons are too short, economists’ time horizons are too long. The book includes many other takeaways.
Q. What are the policy implications?
Blinder: The main implication is that society loses when good economic remedies are discarded and bad economic remedies are accepted. The book is replete with examples. Here’s one: Essentially all economists, whether Democrats or Republicans, think we need to tax carbon emissions to combat global climate change. But essentially no politicians, whether Democrats or Republicans, support the idea. So guess what happens!