Tuesday, May 06, 2008

Dissing the Dismal Science

The internet is overflowing with people who are outraged at Hillary Clinton (what else is new). Hill's latest Big Sin is seen as this:

* Her gas-tax-holiday proposal hasn't been endorsed by any economists.
* When asked about that on This Week with George Stephanopoulos she said, "Well, I'll tell you what, I'm not going to put my lot in with economists" - which has been interpreted as a complete dismissal of their input.

I agree that Hillary's response to George Stephanopoulos was a poor sound bite, but when you hear it in context you can see that what she's saying is essentially what we all should have learned in Econ 101: Economists provide input to policy-makers, but the discipline of Economics is not about policy making. In other words: we thank economists for their input, but economic considerations are only part of what policy-makers use to make decisions.

Furthermore, if you take the time to listen to her talking about her proposal, her focus is all about market manipulation by the oil companies that is responsible for nearly half of the current price of a barrel of oil, and the need to do something about that.

I am not a supporter of lowering gas taxes. I argue all the time that we need greatly higher gas taxes. Insofar as there is any justification for reducing the gas tax for the summer, I'd say that it would be a way to counter the recession by reducing consumer pessimism. For example, Americans might decide not to cancel their summer holiday when they see that the government has reduced the price of gas. (And Hillary has said over and over that her proposal is a temporary measure aimed at current market conditions.) It is not a disadvantage of the proposal, but an advantage, that it might bolster the economy while not greatly changing the price of gas.

CNN and other media outlets are going on about the gas tax holiday as if it were the only thing she's proposed. Media - both traditional and new - is failing us.


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