This is not a question, although i will pose one at the end for people to answer, as much as it is an attempted exposure of actual, purposeful obfuscation taking place in a textbook at IU in the economics department. The author sets up very flimsy arguments and then treats them as if they are scientific problems than only government economists can see and fix. The class is E308, and “NOT INTENDED FOR ECONOMICS MAJORS.” The class is given early on in the education and economics curriculums.
Here is the book:
Chapter 1, Section 1. Political Obfuscation
Believe it or not it starts with politics on page one. The author begins by giving his account of the 2008 financial panic and the subsequent political reaction. This whole two page explanation is riddled with what I consider to be lies and purposeful distortions. At first, i gave him the benefit of the doubt in that he may have been trying to simplify the given reactions and interventions, but this is doesn’t hold up towards the end of the several paragraphs.
First, he says that the issue divided the politicians straight down party lines and that the republicans were resistant to the bailouts and that the democrats had pushed for large interventions. He wrongly credits the Obama administration and congress for passing the initial 787 billion dollar stimulus. He says that the bill was passed by a, “Strong Democratic Congress and the newly elected President Obama.” “The final stimulus,” had more Democratic influence. I find this to be a lie because it was passed in September 2008 and anyone who was paying attention would know that September comes before November and even if it didn’t Obama would not be getting credit until the end of January when he took office. He quotes Harry Reid, “Our entire country will suffer and the world will suffer.”
He takes a quote from John McCain way out of context. the quote is this, “We’re laying out multi trillions of dollars of debt on future generations of Americans. I cannot support such a thing.” We all know that McCain flew home from the campaign trail to vote FOR the bill. My estimation is that this quote was taken, not only after the election, but about a different bailout; Obama’s $800bn dollar program. The author is lying and selecting false and misleading quotations.
He then says that the public had a 59% approval rating of the passage of the bill, an un cited statistic. My question here is, if the congress didn’t pass it and had to be threatened and coarsed (as well know they were) to pass it and the people wanted it so badly, why was the congressional approval rating in the single digits immediately after the passage of the bill?
I submit, this has been written firmly to plant false ideas and progression of events in naive readers. The intended result is to further polarize the economic understanding of those inclined towards education and the public sector (something they don’t need any more of!)
Chapter 1, Section 4. Something For the Whole Family
Here the author discusses the merits of, you guessed it, Flu Vaccinations. He starts by saying there are 45 million Americans without health insurance. He says that people who do not take flu shot increase the risk of contaminating others. This carries more negative externalities in the form of causing a rise in medical costs and, because the author is a professor, students grades drop. These are not argument that anyone would make using verbal logic.
-If i get my flu shot i do decrease the risk of others getting it, assuming i am around people who do not have the vaccine, but i do not cause a rise in medical costs in general. After all, if I don’t get my vaccine then i do not consume a unit of it. This technically will drop the price because I’m leaving my unit on the market for others, effectively ensuring that the market is +1 unit no matter what because i am not buying one. Costs lower here.
-My flu shot has nothing to do with other students grades, regardless of the complications of externalities. This is not an economic argument that one would make with verbal logic. His logic says that by my getting a flu shot that other’s school performance would rise and would lower the costs associated. He is supposedly an economist, are we not considering correlation and causation? (the author uses the technique of leading questions, meaning in a court one could object to almost every premise.)
The bulk of these pages were written as evidence that mandatory vaccines are beneficial and perfectly “rational.” Economics says so.
The definition of a negative externality (from the book): “When a decision imposes on others costs that I don’t bear.”
Chapter 11, Section 1. Productivity through
In this section the author intends to confuse and distort the economic distinctions between wealth creation and wage distribution. This is the worst of all in my opinion. He thinks that since the public funds education system that the public must receive (tangible) benefits in return…dangerous stuff we get into this book.
The story is about Stacy, who goes to college, gets a higher education and therefore, becomes more productive in the workforce. (It should be pointed out that this chapter is about “Education and Productivity” and from the perspective of teachers) A.K.A. a more productive teacher.
Right away the author says “…higher standard of living that comes with increased productivity.” But right after this he changes means to the end. “However, this higher standard of living is not an externality if the worker is the only one who reaps the benefit from her higher productivity.” He goes on, “For example, if more education raises Stacy’s Marginal Product of Labor (MPL) but the increase is fully reflected in her receiving a higher wage from her employer, then there is no positive externality to society from Stacey’s education.”
-Her education need not ‘benefit’ anyone but her. It looks like this is an example of a negative externality for paying taxes, no?
The positive externalites he manages to make up are: a. – She encourages others to work harder (haha not likely) and b. The government can tax her in a higher bracket…
This is naked Marxism.
If we think of Stacy as a table maker (something tangibly productive) and she goes to college and becomes more productive at making tables, IE. less materials, less time, etc., then we would say that the marginal cost (MC) of producing the tables have dropped. This allows the seller to sell for less. This encourages more people to buy the tables as a new market has open up, the lower price market, and as more and more people accumulate tables in their houses (something they would not stockpile or buy repeatedly; Diminishing Returns) this is the wealth that is being added to society. When more people have the ‘luxury of the table’, does that not constitute a raised standard of living? The author overlooks the fact that you do not increase wealth in society by buying things, you increase it by creating them. Therefore, wealth is created while you are working and being paid in wages. Wages (or consumption) show where productivity is further desired by society.
Since when is an ‘increase in productivity’ NOT mean wealth creation? Her working harder (improving efficiency) DOES add wealth to society.
The book also stresses the difference in EQUITY AND EFFICIENCY. I find this, also, to be a misnomer. TIME IS MONEY. I do not expect equitable results from a project that i put no effort, time, labor, or money into.
Chapter 11, Section 2. Active and Informed Voters
P.293 - Citizenship (Public Education) The author suggests “State funds” be used to encourage “Informed and active voters” in the form of public schools. He is at this point literally calling for the education of immigrants in public schools so that they may be “INFORMED AND ACTIVE VOTERS.” He says this will, “improve the democratic process” and is “fairly compelling.”
i am starting to get mad.
Later on P. 293 Failure to maximize FAMILY UTILITY. The author implies that parents may not know the right ‘level’ of education to provide for their child. He looks at the parents concerns for present consumption vs. the child’s future income. (when deciding on a money level for education). In other words, the author assumes that parents aren’t smart enough or responsible enough to make these decision, they could be too selfish to think of the child as well, but the government econometricians sure know what’s right! He overlooks the quantity mechanism of having too many degrees in the job market diluting each others value.
The simple question for those who read the whole thing: I am crazy?