Q&A Friday #13: Why Doesn’t Bush Use More “Economic Arguments?”

Question: Along with border security/immigration, I think economic issues are the hot potato that Bush won’t touch. If his position can be framed as liberal, he’ll talk about and even take real and good action – eg social security, but he must pretend to be a fiscal liberal (“we must save social security!”)

My question: any 5th grader can understand basic economics, they are really common sense concepts. Why is it such a taboo to make economic arguments in the political sphere?

Did the Reagan / Newt revolution end? Are people no longer willing to listen? Are politicians just scared of it? Did the 1980s tell people it was not true? Or the 1990s tell them the democrats were right? Are there not enough entrepreneurs and investors among the voting masses? Are tax cuts the only economics people care about?

I have not heard Bush make one economic argument about pharmaceutical price controls, about the minimum wage (eg during the debates when Kerry was pushing it), about why private accounts and smaller government are good for the economy as well as good for long term returns; I’ve not heard him push economic reforms on the basis of the great success that former communist countries are having, economic arguments for the flat tax, etc.

I do give Bush credit for tackling some of these issues or taking the right stand even quietly, particularly as he has enough on his plate in foreign policy to keep anyone busy… but why is it so dangerous to make the economic arguments?

I think Bush could understand and explain them if he was willing to; my question is why its too taboo for him to take on? (or would it just ruin his cowboy image?)” — liberty

Answer: If you’re President Bush, you can’t rely on “economic arguments” because they’re not necessarily intuitive to most people, they can’t be adequately explained in 15-20 seconds, the mainstream press #1) isn’t going to take the time to explain it and #2) isn’t going to fairly represent what he’s saying to the public, and of course, the Democrats are going to try to demagogue what he’s saying.

Adding to that, you may think economics is “common sense concepts,” but that’s not true. A lot of economics is counterintuitive.

For example, take price controls (which I’m adamantly against). The reason they’re implemented again and again despite the fact that they lead to disaster is because at first glance, they APPEAR to be a good idea.

Take rent control for example. Who wouldn’t love the idea of not having to pay market value for a place to live? And isn’t shelter a “right?” I mean you need some sort of shelter to live, correct?

But what happens in areas with rent control? At first, landlords may stop doing repairs and cleaning either because they’re losing money or because the cheap price of their accommodations can lure in renters even without basic maintenance.

But over time, buildings are boarded up and allowed to become vacant; rent control means they are guaranteed to lose more money by renting out the buildings. Furthermore, new developers either don’t build because of the rent control or find a way to get around it, by let’s say building expensive luxury housing that isn’t covered by the rent control laws. The result is that rent control actually leads to HIGHER RENTS overall & shortages of housing.

So does rent control make sense? No, but trying to convince people who think they’re going to get cheap housing out of it isn’t necessarily an easy proposition. Blogs, magazines, and talk radio may be able to do so by going into detail on economic arguments, but it’s tougher for politicians to make their case given the circumstances they have to deal with…

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