Arithmetic as Magical (Policy) Thinking*

You’ve been warned: this repost from my personal blog, pasted below the horizontal rule, is too politically loaded for the content to be required for this class.

I’ve included this here because of the current controversy over Obamacare’s forecasted effects on unemployment, and the difficulty of understanding the implications of means-testing and marginal tax rates.

No one, anywhere, would settle for a discussion of policy that was illiterate. But all too often we settle for policy discussions that are innumerate.

I don’t want to come across as a math ogre, but as a student you’ve got to get in the habit of crunching the numbers. It matters.

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From John Hinderaker writing at PowerLine:

… On the Left, a “wonk” is any liberal who can multiply and divide. But liberals often trip over even that low threshold.

This regards a proposal to address income inequality by seeding everyone with a small taxpayer-funded trust fund at birth.

This actually is a pretty good idea (and one that has also been made in different formats on the left and right). The difference is that the people on the left do the math wrong, and then run with it.

Then he quotes from a reader’s contribution about widespread innumeracy on the political left:

But, as our reader says, this kind of magical thinking on the Left is not unique to Ornstein. On the contrary, an inability to understand the most basic principles of arithmetic constantly dogs liberals. How else did we get Obamacare? Moreover, Ornstein was not alone. Didn’t National Journal have an editor who read the piece and said, “Whoa! $3,500 to $700,000 at 5%? Did you check the math?”

Please note that the current version of the linked article does acknowledge the math mistakes in a footnote.

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* Magical thinking — thinking that if a person hopes for something enough or performs the right actions that an unavoidable event can be averted — is a good concept to learn about in a well-rounded college education. One of the things that I’ve found as a macroeconomist, that makes teaching macroeconomics difficult, is the extent to which students (on the left and right) maintain macroeconomic views are studded with the magical thinking of folk economics.

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