Joe: You are right to say "economic eggheads" should play a limited role in
policy questions about inequality. In fact, one of the first things they teach
you at economics school is the difference between normative economics
(involving moral and philosophical issues) and positive economics (efficiency
issues), and about how little economics can contribute to the former. Sadly,
many economists pretend to be proffering economic wisdom when it really they
are only dishing out personal opinion or political bias in an economic wrapper.
You probably won't like this but I'll say it anyway: On most major policy
issues there is not enough economics in the debate. Economists--who fear being
called names like "egghead"--will often limit discussions to what they think
are politically realistic possibilities. They don't want to be considered
irrelevant.

(I can remember former Ways and Means Committee Chairman Thomas chastising
policy wonks for not offering proposals he could actually use.) But the job of
the economist should not be to pre-filter the message for political relevance.
That's the politicians job.

The economist should educate to the point of nagging: The mortgage interest
deduction should be repealed, the gasoline tax should be one or two dollars a
gallon higher, etc. Sorry, nobody wants to hear things like that. But
unpleasant truths are still true. If economists don't continue to beat on
gross inefficiencies in our system, they give sleepy politicians an easy out
and they deny the few dynamic ones the opportunity to challenge of the status
quo. Of course public opinion and popular politics will--and should-- prevail.
But the public and politicians should always be reminded that much of what they
consider sacred comes at an economic cost.

Posted by Marty Sullivan on May 16, 2009 at 06:02 AM