Good Question

From my chairman, Don Boudreaux:

This afternoon you interviewed a pundit who claims to be "inspired" by the way that Bill and Hillary Clinton, having been so critical of Barack Obama during the presidential primary campaign, now work so agreeably with him.  I'm not inspired; I'm suspicious.  Were the Clintons lying during the campaign?  Or are they lying now?

This is one of the many questions I'd like to pose to folks like Brad DeLong, who spent years pointing out Bush's dishonesty as if the man was some kind of pioneer. I'll admit that politicians lie to different degrees. Maybe Bush was a bigger liar than most; if 25% of Republicans said so, I'd believe it. But all successful politicians are big liars by the absolute standard we routinely apply to the people we personally know.

CATEGORIES: Behavioral Economics and Rationality

COMMENTS (9 to date)

Latest Comment

david writes:

Perhaps there is a difference in the kinds of things they lied about.

Besides that, even if most politicians on both sides of the fence lie until their tongues turn blue, it's still worth calling them out for it.

Posted June 2, 2009 11:49 AM

fundamentalist writes:

Bryan doesn't understand the rules of the game. For the left, Republicans are liars by definition. Democrats cannot be liars, by definition even if they tell lies. For example, former CBS anchor Dan Rather said of Clinton after his perjury before a grand jury that Clinton had told lies, but that didn't make him a liar.

Posted June 2, 2009 12:36 PM

JH writes:

With the Clintons, I think it's safe to assume they are always lying.

Posted June 2, 2009 1:10 PM

Greg Ransom writes:

It's important to make the vital distinction between liars and BSers -- see philosopher Harry Frankfurt's famous essay "On Bullshit".

Obama is a BSer -- Bush, not so much. Bush, well, not even a good liar.

Obama -- awesome BSer, which means he's rarely a liar at all.

Posted June 2, 2009 1:11 PM

Matt writes:

I don't think the Clinton's are being disingenuous. While the Obama administration is in office they'll be loyal, ignoring differences in public, and afterward they'll admit what those were. I'm not any more suspicious now that they've seemingly forgot their objections to him.
I'm not inspired either. Working well with the man in power is self interested.

Posted June 2, 2009 1:50 PM

John writes:

The Clintons weren't lying - they were just "framing" the truth differently. :)

Posted June 2, 2009 5:28 PM

Methinks writes:

Gentlemen, I can't possibly be asked to answer the question until the meaning of "is" is finally and conclusively determined.

Posted June 2, 2009 7:26 PM

Dave writes:

The real question should be, "Why do people continue to vote for people they know are liars?" Obama is Bill Clinton 2.0 - totally inept and in over his head, but loved by the media and good performer on TV. Every word that he reads off his teleprompter is either a lie or a half truth. But the media loves him so he is never called on anything. Also he is untouchable because of his race.

Posted June 3, 2009 10:27 AM

JackofSpades writes:

As the writers of South Park so perfectly stated through the specter of Rob Reiner, "Sometimes lying is okay, like when you know what's good for people more than they do."

There is no denying that Obama lied through his teeth during the campaign regarding his intentions toward NAFTA. But, so be it, because what mattered was that he gained the support needed to get elected and can now get to the important work of blah blah blah...

I think 90% of the reason why politicians lies are forgiven is based on the ends justifying the means. The left supports Obama's ends so they turn a blind eye to his means, even though they scream bloody murder when Republicans do the same thing (and they do).

The Bill Gates Mystery

Not long after I started at GMU, Tyler approximately remarked that, "Bill Gates is just crazy - he works like a dog despite his billions." I don't remember how I responded at the time. But when I'm trying to understand the behavior of people whose circumstances are drastically different from my own, I find that a little empathy goes a long way. How does life look through the eyes of Bill Gates?

My old conversation with Tyler came back to me a couple of days ago when I was reading Sloan Wilson's The Man in the Gray Flannel Suit (1955). Here's a dialogue that almost seems like it's ripped straight from a GMU lunch. Tom, the lead character, is talking with his friend, Bill, about Tom's new boss, Hopkins:

Bill sipped his drink thoughtfully. "What do you already know about Hopkins?" he asked.

"Not much," Tom said. "I've hardly heard of him. Somebody told me he started with nothing and he's making two hundred thousand a year now. That's about all I know - I don't think I've ever even seen a picture of him."

"Precisely," Bill said professionally. "Precisely."

"What the hell do you mean by that?"

"I mean it looks like the public-relations boys have cooked up a big deal to put Hopkins on the map, and you've stumbled into it."

"I don't get it," Tom said.

"Figure it out for yourself. Here's Hopkins, about fifty years old, and the president of the United Broadcasting Corporation... Inside the company, he's the biggest deal in the world... But outside the company he's nothing. Taxi drivers don't call him 'Sir.' Waiters more than five blocks from Radio Center don't give him a special table... Don't you see how tough it must be?"

"I'm weeping," Tom said.

"All right. Here's a guy who works fifteen or twenty hours a day - inside the company he's famous for it... And people like him - he knows how to drive people and still make them like him. But what's he get out of life?"

"Money."

"Of course! But if he made only a quarter as much money, he'd still be able to buy everything he wants. Hopkins is a guy of simple tastes... So what's he keep working fifteen or twenty hours a day for?"

"Must be nuts," Tom said.

"Nuts nothing! The poor son of a bitch wants fame! And he's in a position to buy it. So he calls Ogden and Walker and says, 'Boys, make me famous. One year from today I want to be famous, or you're fired!'"

"Oh come on," Tom said, laughing. "You know damn well that's nonsense."

"Perhaps he wouldn't word it that way exactly... He'd say, 'Gentlemen, I believe that for the sake of the company, the major executives must direct more attention to their personal public relations...'"

"I doubt like hell that a man in his position would say that either."

"Okay - be a stickler for detail. What would really happen is that somebody would suggest that Hopkins head a committee on mental health - these guys are asked to do that sort of thing all the time. Usually they refuse. But this time Hopkins figures he's got a chance for the national spotlight. You're right about one thing - he'd never have to say anything about it. He wouldn't have to..."

The whole book is filled with gems like this. If you're short on time, try the movie - it's a great adaptation, and the dialogue is right out of the book.

Hope His Top Advisor Sort of Believes In

Is it just me, or does Larry Summers damn his boss with faint praise?

"When I've heard him talk about economic issues--with the exception of NAFTA, where I just hope he doesn't believe what he says--he seems intelligent and serious. I wouldn't say I'm bowled over by the brilliance of anything I've heard, but everything has a kind of thoughtfulness to it that's sort of impressive."

Let me put it this way: If Summers put these sentences into a letter of recommendation for a job market candidate, he probably couldn't get an interview, much less a job.

I suppose that Obama's defenders might hail his willingness to employ non-sycophants like Summers. And I guess that Summers might say that he's happy to raise the probability that this "intelligent and serious" leader will act as if he were brilliant. But both of these observations strike me as the flip side of sour grapes: Since this is what we've got, it must be pretty good. Isn't "Even his top economic advisor doesn't think much of him, so he's probably a borderline economic illiterate" the more reasonable lesson to draw?

Cruel Caring in Breaking Bad

Breaking Bad is a show about a terminally ill high school chemistry teacher who starts cooking meth to build up a bequest for his family. You see a lot about the economics of drug prohibition in the show, but you're probably already familiar with it. What's original about Breaking Bad is its highly Hansonian take on the economics of health care. [Warning: Mild spoilers follow.]

Robin Hanson doggedly argues that health care is more about "showing that you care" than about improving health. Breaking Bad shows us the dark side of caring. When Walt finally tells his family about his illness, he gets almost no genuine sympathy. Instead, his family bullies him into accepting painful, expensive treatments that are almost certain to fail. It's all about them and their feelings; both objective statistics and the feelings of the man with two years to live count for nothing. Indeed, it's precisely because his family insists on expensive treatments that Walt keeps making meth even though he's in way over his head.

The main problem with Robins' signaling model of medicine is that (unlike the signaling model of education) it's counter-intuitive. Breaking Bad brings the Hansonian critique of medicine - and "admirable activities" generally - to life.

CATEGORIES: Economics of Health Care

COMMENTS (9 to date)

Latest Comment

drobviousso writes:

I don't know how they did it, but they managed to get both the science and economics fairly correct in this show. I've really enjoyed it.

Posted July 23, 2009 11:23 AM

Steven writes:

If you're looking for more examples from literature supporting Hanson's view, start with War and Peace. I apologize for the length of the quotation, but the whole chapter is worth reading, and it was hard enough to limit my selection to two paragraphs.

From: War and Peace, Book 9, Chapter 16, http://www.gutenberg.org/files/2600/2600-h/2600-h.htm#2HCH0183

"Natasha's illness was so serious that, fortunately for her and for her parents, the consideration of all that had caused the illness, her conduct and the breaking off of her engagement, receded into the background. She was so ill that it was impossible for them to consider in how far she was to blame for what had happened. She could not eat or sleep, grew visibly thinner, coughed, and, as the doctors made them feel, was in danger. They could not think of anything but how to help her. Doctors came to see her singly and in consultation, talked much in French, German, and Latin, blamed one another, and prescribed a great variety of medicines for all the diseases known to them, but the simple idea never occurred to any of them that they could not know the disease Natasha was suffering from, as no disease suffered by a live man can be known, for every living person has his own peculiarities and always has his own peculiar, personal, novel, complicated disease, unknown to medicine—not a disease of the lungs, liver, skin, heart, nerves, and so on mentioned in medical books, but a disease consisting of one of the innumerable combinations of the maladies of those organs. This simple thought could not occur to the doctors (as it cannot occur to a wizard that he is unable to work his charms) because the business of their lives was to cure, and they received money for it and had spent the best years of their lives on that business. But, above all, that thought was kept out of their minds by the fact that they saw they were really useful, as in fact they were to the whole Rostov family. Their usefulness did not depend on making the patient swallow substances for the most part harmful (the harm was scarcely perceptible, as they were given in small doses), but they were useful, necessary, and indispensable because they satisfied a mental need of the invalid and of those who loved her—and that is why there are, and always will be, pseudo-healers, wise women, homeopaths, and allopaths. They satisfied that eternal human need for hope of relief, for sympathy, and that something should be done, which is felt by those who are suffering. They satisfied the need seen in its most elementary form in a child, when it wants to have a place rubbed that has been hurt. A child knocks itself and runs at once to the arms of its mother or nurse to have the aching spot rubbed or kissed, and it feels better when this is done. The child cannot believe that the strongest and wisest of its people have no remedy for its pain, and the hope of relief and the expression of its mother's sympathy while she rubs the bump comforts it. The doctors were of use to Natasha because they kissed and rubbed her bump, assuring her that it would soon pass if only the coachman went to the chemist's in the Arbat and got a powder and some pills in a pretty box for a ruble and seventy kopeks, and if she took those powders in boiled water at intervals of precisely two hours, neither more nor less.

What would Sonya and the count and countess have done, how would they have looked, if nothing had been done, if there had not been those pills to give by the clock, the warm drinks, the chicken cutlets, and all the other details of life ordered by the doctors, the carrying out of which supplied an occupation and consolation to the family circle? How would the count have borne his dearly loved daughter's illness had he not known that it was costing him a thousand rubles, and that he would not grudge thousands more to benefit her, or had he not known that if her illness continued he would not grudge yet other thousands and would take her abroad for consultations there, and had he not been able to explain the details of how Metivier and Feller had not understood the symptoms, but Frise had, and Mudrov had diagnosed them even better? What would the countess have done had she not been able sometimes to scold the invalid for not strictly obeying the doctor's orders?"

Government Health Insurance and Pseudocertainty

One of the most appealing arguments for government health insurance is the perception that it's "a sure thing." No matter how powerful reputational incentives are, a private health insurance might go out of business, or fall into the hands of a myopic CEO. With government health insurance, on the other hand, you know that you're covered, right?

This is a prime example of what psychologists call a pseudocertainty effect. Tversky and Kahneman originally explained it using two hypotheticals (my paraphrase):

Hypothetical #1: You play a two-stage game. There is a 75% chance that the game ends in stage 1 and you win nothing. However, if you make it to stage 2, you get to choose between $30 with certainty, or an 80% of $45.

Hypothetical #2: You choose between a 25% chance of $30 or a 20% chance of $45.

Most people take the first choice in Hypothetical #1, and the second choice in Hypothetical #2, even though they are mathematically identical. T&K's explanation: Hypothetical #1 looks better due to a "pseudocertainty effect." People are misled by the fact that the P(A|B)=1, even though B itself is far from certain.

What does this have to do with health care? Well, government health care is a sure thing conditional on (a) getting high-quality care for (b) a treatable ailment (c) in a timely manner (d) without getting a secondary infection... etc. In other words, like private health care, government health care isn't a sure thing at all.

Now you could object, "It's not about a pseudocertainty effect. It's about a higher likelihood of good health with government health insurance." If you go down that route, however, you've opened yourself up to a barrage of tough questions. What evidence is there that government health insurance raises life expectancy - or any other major measure of health? Even if it does, is the extra cost worth it? As Tversky and Kahneman showed, people will pay a lot to go from near-certainty to perfect certainty. They're far less eager to pay an arm and a leg to go from a 45.3% chance of living to 80 to a 45.5% chance living to 80.

My point: While "certainty" is of the most appealing arguments for government health insurance, it's silly. But if proponents stop using it, it's going to be a lot harder to win over public opinion. It's a choice between persuasion and honesty. Take your pick.

The Economics and Philosophy of the Wall

I usually dislike movies based on true stories. But The Tunnel, a tale of five heroes who tunnel under the Berlin Wall to rescue their family and friends, is excellent. We don't just vicariously enjoy the excitement of digging to freedom. We see the tyranny of Communism in its most visceral form - "No one gets out of here alive."

For libertarians, morality doesn't get much clearer than this. But almost all non-libertarians will be equally certain that the tunnelers are good and the East German border guards and secret police are evil. My question is: Why, on this one issue, do non-libertarians so readily accept the stereotypical libertarian position?

Consider: Most East Germans who wanted to flee to the West were probably "economic refugees." Take a look at the emigration numbers. If people were going West for freedom, they might as well have left ASAP in 1949 or 1950. Many did, of course. But the outflow continued year after year. The most obvious explanation: The West's living standards kept pulling further and further ahead of the East's, attracting emigrants who cared a lot more about prosperity than freedom.

So what? Well, conservatives are notoriously hostile to "mere" economic refugees. And if you point out that these economic refugees were selfishly trying to escape redistributionist policies, it's hard to see why liberals would cheer them on. Again, I'm not denying that conservatives and liberals are confident that people trying to escape from East Germany were in the right. I just don't understand the reason for their confidence.

A few possibilities:

1. It's OK to flee from a dictatorship, even if your motive is economic gain and your action undermines redistribution. Question: What if the Berlin Wall enjoyed democratic support? Would it have been OK then?

2. It's OK to keep people out, but not to keep them in. Question: Suppose the Berlin Wall had been erected by West Germany to keep out illegal immigrants. Would it have been OK then?

3. When a nation has been "artificially" divided, it's OK to ignore restrictions on freedom of movement within the nation's "true borders." Question: Where in the world do "true borders" come from? Philosophers may say "the social contract," but it's obvious that almost all real-world borders have been set by force. See for example what happened to Germany after WWI and WWII.

4. It's OK to ignore restrictions on freedom of movement if they split up families and close friends. Question: Doesn't this mean that current family reunification quotas are actually monstrously strict? If this seems like hysterical libertarian rhetoric, watch the scene in The Tunnel when people explain who they want to smuggle out. People weren't just willing to risk their lives for their children, spouses, parents, and siblings. They also risked their lives for boyfriends, girlfriends, friends, family of friends, and more.

Frankly, this is yet another issue where I have trouble even imagining what an intelligent, thoughtful non-libertarian would say. Can anyone help me out?

Sumner Digest

Sumner's latest mini-essay is a thing of beauty. Highlights:

1. Sumner on the Fundamental Attribution Non-Error:

I think we all listen to our friends, relatives, and colleagues complain about their predicament, and then silently think, "Well what do they expect? Their predicament perfectly reflects their character." If they are a lazy spendthrift, then they will go through life thinking that adverse circumstances are always denying them the money they need. If they are envious, then their colleagues will be unfairly promoted ahead of them. Etc, etc.

But when we think about ourselves, well then things are very different. If only we could get out from under burden X, our life would be so much easier... While reading the Portuguese writer Pessoa, I recently came across this quotation:

Whenever I've tried to free my life from a set of the circumstances that continuously oppress it, I've been instantly surrounded by other circumstances of the same order, as if the inscrutable web of creation were irrevocably at odds with me.

%$@#& that inscrutable web of creation.

2. Sumner on the Political Corollary of the Fundamental Attribution Non-Error:

When we form a mental image of another democratic country, we don't typically think in terms of the current leader, but rather a much deeper set of characteristics, what you might call the character of a country. France, Italy, Switzerland, Japan; the names of each of these countries trigger complex mental images for most of us, but how many readers of this blog could even name the leaders of Switzerland and Japan?...

For our own country things are much different... [D]on't we all tend to exaggerate the importance of who is elected? I think this is especially true when the leader is someone you don't like. Deep down, conservatives feel they have never been given a chance; that the liberal elite runs the media, courts, colleges, and there are enough squishy Republicans that nothing substantive gets accomplished. I think this excuse is hogwash, but I am pretty sure it is widely held. In contrast, left-leaning intellectuals often refer to "Reagan's America," or "Thatcher's Britain." But I've never heard the phrases "Jimmy Carter's America," or "Gordon Brown's Britain." Why not? Because if the more liberal candidate is elected, the country will still face the same problems as before, just as Switzerland and Japan will still be Switzerland and Japan regardless of which non-entities happen to hold their highest offices.

3. Sumner on the Power of Zeitgeist (Auf English, daß ist "public opinion.")

Elections are very important, but mostly because of the fact that we have them. The real action is in changing the zeitgeist, not who ekes out an election victory. In some ways we will become much more like France, for instance I think we will move closer to universal health insurance. And in some ways France is becoming much more like the US, as when they deregulated the commercial airline industry and privatized lots of big companies. But none of these long run trends will be determined by who wins elections.

4. Sumner on Leaders Who Make a Difference

In the 1960s most Americans knew that Mao was leader of China, whereas today very few can name Hu Jintao. Does that mean we are less well informed? No. There was good reason to know who Mao was, he was one of the most important figures in world history, and his decisions greatly affected the lives of millions. There is no need to know who Hu is (pun intended.) Fortunately for the Chinese people, Hu could not launch a Great Leap Forward or Cultural Revolution even if he wanted to.

If you can't imagine how one short essay can stitch all these topics and much more together without leaving a visible seam, read the whole thing.

What Would Happen If the Median Economist Controlled Health Care Policy?

Arnold writes:

On health care, the irrational public--the ones that want government to keep its hands off their Medicare--is helping to fight the Progressives who want to impose a health plan that is based on what I see as a failed model--the Massachusetts plan. In Bryan's ideal world, wouldn't our health care system be run by the wise technocrats of the Obama Administration?

In my ideal world, we'd recognize that economists' textbook arguments against free-market health care are largely bogus (a vestigial reflection of anti-market bias) and respond by abolishing Medicare and Medicaid, medical licensing, and all the other health care regulations on the books. But Arnold still suggests an interesting hypothetical: What would happen if the typical economist controlled health care policy?

Contrary to Arnold, I think it would be a vast improvement over the status quo. I've talked to plenty of left-wing economists about this topic. On balance, their views are much more reasonable than the median non-economist's. Yes, most economists probably favor universal coverage, and I don't. But few economists want a government monopsony. And they're on board for three major reforms that I support:

1. Denying care to people on Medicare and Medicaid when their treatment is expensive and the actuarially predicted benefit is small.

2. Substantially raising deductibles for people on Medicare and (maybe) Medicaid.

3. (Moderately) deregulating medical licensing to allow a greater role for doctor's assistants, nurse practitioners, etc.

In fact, since the typical economist's argument against means-testing Medicare is that it would undermine its popular support, I think that in this hypothetical scenario that I could convince the typical economist to accept a fourth wise reform:

4. Means-testing Medicare.

So answer me this, Arnold: Isn't universal coverage bundled together with these four reforms an improvement over the status quo? And isn't the status quo (or worse) exactly what we're likely to see as long as the median voter has his way?

CATEGORIES: Economics of Health Care

Why Do People Oppose Organ Markets?

It seems that Bryan thinks most opposition to markets in organs is a function of either ignorance of the likely consequences or perverse and exotic moral premises. This makes me wonder if he has ever debated this issue with anyone? Lots of people understand the economics well enough but continue to believe that markets in organs ought to be illegal.

I have debated the legalization of organ selling with quite a few people over the years. In my experience, 100% of people who can correctly explain economists' standard case for legalization favor legalization, and 100% of people who can't correctly explain the case oppose legalization.

I'll grant that my sample is a little unrepresentative. I suspect that with a little legwork, Will could find a hundred Leon Kass-types who understand the economics of organ selling but still oppose legalization. But I still think that at least 90% of people who can correctly explain economists' case are on board. Am I wrong?

Against Human Weakness

Whenever a politician is exposed as an adulterer, the same meme always resurfaces: "We're all human, we shouldn't have 'unrealistic' expectations, everyone has moments of weakness, so let's forgive and move on..." Micha Gertner gives an eloquent version over at Distributed Republic:

[T]here is clearly something wrong with the social expectation of life-long monogamy. It is totally unrealistic to the point of being laughable, and seems to lead to more frustration and family disintegration than if the expectation didn't exist at all. I understand some people have trouble dealing with their petty jealousies, but maybe they should try a little Don't Ask, Don't Tell instead of the nuclear option?

I'm not a principled advocate of monogamy; it's not for everyone, and I am after all a fan of Big Love. I am however a principled advocate of honoring your contracts and promises. If you don't want to practice monogamy, here's an idea: Don't agree to it. If you want a non-traditional marriage, write a contract for it. Don't accept the standard-issue version, then pretend that you didn't have a choice.

But aren't monogamous contracts "unrealistic"? This claim makes no sense. If 50% of people who vow life-long monogamy keep their promise, what's "unrealistic" about it? Monogamy is no more unrealistic than hundreds of promises that we expect people to keep - to show up for work on time, buy lunch next time, pay their workers, or give dissatisfied customers their money back. In each instance, if you think the terms are onerous, refuse them. Don't say yes, then blame the fates.

But what about human weakness? Here I take a hard line: Human weakness is a choice, and it should be criticized, not excused. I'm particularly baffled when economists say otherwise. In what economic model is "lots of people feel tempted to do it" a reason to turn a blind eye? I embrace a simple alternative: Do the right thing all day, every day.

Now I know what you're thinking. "Bryan's holding himself up as a saint, but if I spied on him, I'm sure I could dig up all kinds of dirt on him." Perhaps you're even hoping I'll issue a hubristic Gary Hart-style challenge to follow me around. My response:

1. I do many embarrassing things every day. I sing off-key, dance badly when no one is watching, say things about people that I wouldn't say to their faces, and much more. I'd rather not see any of this on Youtube. Still, I insist that my behavior is merely embarrassing. If I thought it was wrong, I would cease and desist - not plead human weakness.

2. Public defenses of human weakness are part of an insidious pooling equilibrium. Someone fails to live up to their marriage vows or other solemn agreements, and bystanders are supposed to either invoke human weakness or stay quiet. What happens if you condemn the guilty party? You risk being singled out for hyper-scrutiny, and harsh condemnation for the smallest stain on your record. (Or alternately, you single yourself out as a bitter, pathetic victim). As a result, wrong-doers caught red-handed deflect attention from their own bad behavior onto those who vocally disapprove of what they've done. What kind of incentives are those?

3. Doesn't this contradict my earlier attack on hypocrisy? Not at all. Adulterers who publicly attack adultery are indeed worse than garden-variety adulterers, for the reasons I've previously offered. But people guilty of minor offenses who criticize major offenses are not worse than people who commit major offenses.

My friends often chuckle at my puritanism, but it's a tolerant puritanism. I'm not telling anyone what kind of contracts and promises to make, but merely to honor the contracts and promises they've made. That's not too much to ask of human nature.

CATEGORIES: Economic Philosophy

Does Personality Matter? Compared to What?

I finally found the time to read "The Power of Personality: The Comparative Validity of Personality Traits, Socioeconomic Status, and Cognitive Ability for Predicting Important Life Outcomes." [new working link!] It's a meta-analysis, so you've really got to trust the authors to be confident in the results. But if the world works the way the authors say it does, all social scientists ought to be paying attention.According to this article, you can measure personality with a simple survey, then use it years or decades later to make good predictions about mortality, divorce, and occupational status. The research team usually reports results from studies with decent control variables, but of course the quality of past research varies. The paper ends with three key graphs.The first shows correlations between mortality and (a) socioeconomic status, (b) IQ, and (c) four of the Big 5 personality traits:

In The Bell Curve, Herrnstein and Murray showed that IQ almost always out-predicts SES. If this paper is right, conscientiousness alone out-predicts IQ for mortality.The second key graph shows the correlation between divorce and (a) SES, and (b) three of the Big 5 personality traits:

Many of us (Arnold for example) think of divorce as a low-SES problem. If this paper is right, though, divorce is much more of a low conscientiousness, high neuroticism, low agreeableness problem.Finally, in the last graph, we see the correlation between occupational status and (a) SES, (b) parental income, (c) IQ, and (d) various personality traits

The specific personality traits are unspecified because the desirability of traits varies from job to job - think salesmen versus librarians. I do wonder, though, why they didn't show a separate bar for conscientiousness, which is supposed to predict job performance in almost any line of work.Overall, I'm inclined to believe these results. In my experience, people are highly yet predictably different in their preferences. Since luck usually averages out in the long run, it seems like these predictable differences should lead to large average differences in people's lives. The fact that prominent personality specialists will stick their necks out and make these generalizations makes me marginally more confident in my initial intuitions. Does anyone else want to read the whole piece, and tell us how convincing you found it - and why?

The Shield: Social Intelligence Gets Ugly

Bryan Caplan
I just finished the final episode of The Shield, FX's drama about a squad of corrupt LA cops. I loved every episode. At risk of alienating people who will share my evaluation, The Shield is like The Wire, except it's fun to watch.During the final season, I noticed the centrality of social intelligence to the show. While there's a lot of violence, there's a lot more persuasion - and the lead characters are very good at it. What's striking, though, is that the lead characters are particularly good at deception and intimidation. What lie will X believe coming from Y? What threat can X hang over Y's head to make him take some unpleasant action?An example that won't spoil the plot: In one episode, Detective X is on the run from the police, and Detective Y is trying to locate and kill him before the honest cops do. Detective X knows this, so he calls Y to tell him that he's sending a blackmail parcel to the station's captain. As a result, Detective Y has to divide his attention between searching for X, and intercepting X's blackmail parcel in the mail. But then the captain gives Y a street assignment. He doesn't have any trusted confederate to cover for him at the station. So Y goes to detective Z, a divorced cowardly nebbish, and tells him the perfect lie: "I was dating someone on the force, she got mad, and now she's sent a letter badmouthing me to the chief." And of course Z says, "Don't worry, the chief will never get that letter."A key element of The Shield's major characters' social intelligence: Knowing whose opinion counts. Out on the street, the central characters' corruption is common knowledge. There are hundreds of eyewitnesses to their heinous crimes. But since the witnesses are gang members, prostitutes, illegal immigrants, etc., they're either untrustworthy, easily threatened, or both. The upshot: Their testimony isn't much of a check on official abuse. At the same time, of course, there are respected citizens who want to crack down on corruption, but they can't prove a thing in a court of law - and won't act until they can.Outside a game of Diplomacy, deception and intimidation play no role in my life. Not only are they wrong; at least in my social niche, they're highly imprudent. In repeated games, deception quickly backfires; see the proverb "Fool me once, shame on you; fool me twice, shame on me." Intimidation often backfires as well, inspiring anger instead of fear. Indeed, in the absence of high exit costs, intimidation is pointless - people respond by running away instead of knuckling under. Still, I have to admit that I'm fascinated by The Shield's depiction of finely honed social skills so far outside my repertoire. Give it a try - I know of no more entertaining way to learn about the ugly side of social intelligence

The Nuances of EU Unemployment

When I compare U.S. and European unemployment, critics often object that Europe is heterogeneous. Fair enough, but you can make the same objection to any generalization. The U.S. is diverse, too. How often can you silence critics of the U.S. by pointing out American diversity?Still, I'm happy to be more nuanced. The EU-15 is Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom. According to my stereotypes, the countries with less regulated labor markets will have relatively low unemployment during normal times, but sparker spikes during crises. This table shows unemployment now versus a year ago. What's going on?1. High-population France, Germany, Italy nicely fit my stereotypes. So do Belgium, Greece, and Portugal. They've all got high unemployment during normal times, but relatively small spikes.2. A year ago, the EU-15 countries best-known for lower labor market regulation - the UK, the Netherlands, and Denmark - had unemployment well below European norms. The increase in unemployment in the UK and Denmark - but not the Netherlands - has been unusually sharp. Ireland - also known for its relatively free-market policies, looks just like the UK and Denmark - low unemployment a year ago, and a sharp spike since.3. The outliers: Austria, Finland, Luxembourg, Spain, and Sweden. Austria and Luxembourg were low and only rose a little; Finland and especially Sweden started low-moderate and rose fairly sharply. Spain had high unemployment a year ago, but a huge spike since then. The lesson I draw: Noting European diversity makes the case against stereotypical European labor market policy even stronger. European countries that don't act like France, Germany, and Italy do much better. While there are outliers, they're no reason for Euro-optimism: Spain, which manages to have high unemployment and a big unemployment spike, has a bigger population than all of the positive outliers put together.Questions for people who know better than me: What's going on with Finland and especially Sweden? Are their labor market policies closer to Denmark's than I've been led to believe? And what's the deal with Spain? Why do they have high regular unemployment and a big recession spike?

How I Raised My Social Intelligence

Bryan Caplan
My social intelligence is a lot higher than it used to be. I stillwouldn't say that I'm "good with people." But in my youth, I wastruly inept. In junior high, I had one real friend, and many overtenemies. Since then, I've at least managed to claw my way up tomediocrity.A lot of social intelligence is in details and practice. If I couldtravel back in time and spend five minutes advising myself, though,here are the principles I would try to teach myself.1. Good conversation is an exchange. The most basic form of socialineptitude is to say what's on your mind, even though you have noreason to believe your listeners are interested. Even more cloddish:Saying what's on your mind, even though you know that your listenersare not interested.In a useful conversation, in contrast, there is a double coincidenceof wants. You have to be interested in what I have to say; I have tobe interested in what you have to say. This is an important reasonwhy people with conventional interests seem more socially intelligent. Even if they don't check whether their audience cares, it probablydoes.I imagine that my teenage self would immediately object, "But no one'sinterested in what I have to say." My two replies: (1) If that'strue, it's still better to keep your thoughts to yourself thanantagonize people you're going to see repeatedly. (2) People will bemuch more interested in your thoughts if you make marginal adjustmentsin topics and presentation.2. Be friendly. It's not just good advice for libertarians; it's goodadvice for people. A strong presumption in favor of kindness andrespect almost never hurts you, and often helps you. Note that I say"presumption." Don't "wait and see" if people deserve friendlytreatment. Hand it out first, no questions asked. You will makefriends (very good), avoid making enemies (good), and occasionallyshow undeserved kindness and respect (only mildly bad).3. Keeping friends is more important than getting your way. Youshould think twice before asking anyone for help. If you still thinkit's a good idea, try to make your request easy to refuse. "How wouldyou feel about..." is much better than "Please, please just do me thisone favor!" In the short-run, of course, the pushy approach is ofteneffective. But life is a repeated game, pushing leads to resentment,and your relationships are more valuable than almost any specificvictory.The world often perceives economists as low in social intelligence.Maybe we are, but there's no reason for it to be that way. Theinsight that good conversation is an exchange should come naturally tothe economically literate. A policy of blanket friendliness ought tomake sense to anyone familiar with weakly dominant strategies. Andonce you realize that asking for help is an implicit intertemporaltrade, the wisdom of restraint and delicacy is easy to see.Admittedly, if your social intelligence has always been high, myrecommendations will strike you as obvious. If they're so obvious,though, why do so many smart people act like don't know them?CATEGORIES: Behavioral Economics and Rationality.