August 3, 2016

A DUBIOUS DEFENSE OF THE BLUE MODEL:

Wealthy coastal states tend to vote for Democrats. Therefore, Democratic economic policies are superior.
If this reasoning sounds fallacious, that’s because it is. And yet it is the main argument of a widely-praised New York Times op-ed published last week by two of America’s leading political scientists, Jacob Hacker and Paul Pierson. . . .

Put aside the fact that blue states have higher levels of economic inequality than red states, and that blue state spending has been fueled in part by massive public sector pension deficits (Hacker and Pierson mention this but brush it off). Put aside the fact that, according to Richard Florida, “red states, like Texas, Georgia and Utah, have done a better job over all of offering a higher standard of living relative to housing costs.” And put aside the decision to depict “Red America” as a monolith rather than a demographically, culturally, and historically diverse grouping of regions ranging from Appalachia (a major source of red state economic underperformance) to the more prosperous Great Plains and Mountain West.

The fatal flaw with Hacker and Pierson’s effort to demonstrate the fundamental defectiveness of Republican economic policies is even easier to spot than these objections: It doesn’t distinguish correlation from causation. We are supposed to assume that states like New York have high per capita incomes because they are governed by Democrats, and that states like Kentucky have lower per capita incomes because they are governed by Republicans. In fact, it may be that there is some third unaccounted-for variable (like geography or birthrate or immigration) or even that the causation runs in the opposite direction: That New York prefers Democrats because it is wealthy, and that Kentucky prefers Republicans because it is not.

It’s like what Nassim Taleb says about higher education — people think it’s a cause of wealth, but actually it’s a symptom of wealth, because only wealthy societies can afford extensive higher education.

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