A perceptive principles of macro student (DN) wondered why so much policy discussion has so little to do with what’s in texts:
It doesn't have a lot to do with macro … People say we should give up things we like in order to live better, or do things in a harder way, but they mean for other people, or people in general, not necessarily themselves.
This is very common. It is a combination of two things: self-selection bias, and what I call "residual puritanism".
Self-selection is the idea that we select which groups we want to join. Self-selection bias is that we tend to see the groups that we join as a moral improvement over the ones we didn't join. Many people interpret membership in the right group as a sufficient reason to claim the moral high ground: the "right" choice is what's important, not the actions you take. Once you make this distinction, it's easy to require a higher level of moral action on the part of people who "failed the first test" by not making the same choice that you did.
Residual puritanism is related to the idea that America's self-image sees us as primarily descendants of the Pilgrims who settled New England, rather than any of the other colonies (English or not). The Puritan movement that birthed those colonies was composed of people who thought the medieval Catholic Church — which featured fun stuff like Inquisitions and the burning of heretics — wasn't eschatologically serious enough. In short ... all the really crazy types emigrated from England to eastern New England, and from there to inland New England and upstate New York. Two parts that this group retained from Catholicism are the middle-eastern belief that asceticism will make you more worthy, and the Benedictine idea that labor is inherently virtuous (which many people extend to viewing toil as inherently virtuous). For people who have been raised in an environment where this is part of family and societal values, it is an easy step to see something bad happen, and to lay blame on someone who hasn't given up enough stuff, or who has too much free time on their hands.
This actually has a huge amount to do with macro, but it isn't politically correct to talk about in class.
Democrats and liberals tend to think "the rich" ought to live more ascetically so that the rest of us can live better. But this tends to apply to people who get rich only through certain avenues — like business — rather than more noble pursuits ... like, say, being a Hollywood star. So, if you're in the right group, the moral problem of being rich is not quite so serious (this is how Bernie Madoff got away with so much ... he was viewed as a "good" person who didn't require monitoring). This is not that much different than the late medieval idea that the newly wealthy craftsmen and merchants simply could not be part of the pre-existing nobility. Today, only some of the rich get a pass from the Democrats.
On the other hand, Republicans and conservatives tend to think that the "less fortunate" get that way by succumbing to vices. If they only gave up more of the things they actually enjoy, they'd have a better life. But again, those things that people are supposed to give up don't include certain things that conservatives self-select for — like riding motorcycles without helmets. And ... since we're talking about morals here ... this is why Republicans and conservatives tend to be caught more often intentionally hiding their vices from others. Contemporary Republicans tend to self-select into groups with 1) tight moral codes, but 2) not necessarily a huge amount of help for people who succumb to life's moral hazards.
When you put this together, you get Democrats being in favor of taxation as a form of punishment, and government spending as a reward for good behavior, while you get Republicans opposing spending that encourages vices and/or the taxation that supports them. Neither of those visions is coming from macroeconomics, but they both end up leading to macroeconomic effects through policy choices.
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