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Tuesday, June 8, 2010

Econ 101 "Are You Smarter Than A 5th Grader?"

As the nation faces major economic challenges, and chooses leaders it sees as best suited to address these issues, one wonders how well informed the public is on basic principles of economics. To answer that question, Dr. Daniel Klein professor of economics at George Mason University, teamed with Zogby researcher Zeljka Buturovic and asked eight basic economic questions of 4,835 adult respondents (all adults). They then asked the respondents to identify themselves as to political persuasion.

The participants were asked the following questions:

True or False
1) Restrictions on housing development make housing less affordable.
2) Mandatory licensing of professional services increases the prices of those services.
3) Overall, the standard of living is higher today than it was 30 years ago.
4) Rent control leads to housing shortages.
5) A company with the largest market share is a monopoly.
6) Third World workers working for American companies overseas are being exploited.
7) Free trade leads to unemployment.
8) Minimum wage laws raise unemployment.

(See below for answer key).

Democrat respondents averaged 4.59 incorrect answers out of the eight. Republicans averaged 1.61 incorrect, and Libertarians 1.26 incorrect.

Wow.

Broken down into ideological groups that resulted in the following: Very conservative, 1.30; Libertarian, 1.38; Conservative, 1.67; Moderate, 3.67; Liberal, 4.69; Progressive/very liberal, 5.26 incorrect answers out of eight questions asked.
"On every question the left did much worse than the right. On the monopoly question, the portion of progressive/very liberals answering incorrectly (31%) was more than twice that of conservatives (13%) and more than four times that of libertarians (7%). On the question about living standards, the portion of progressive/very liberals answering incorrectly (61%) was more than four times that of conservatives (13%) and almost three times that of libertarians (21%)."

Hmmm.
"Adam Smith described political economy as "a branch of the science of a statesman or legislator." Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us."

Dr. Klein hails from the same school as blog favorite Walter E. Williams, who chaired the Economics department at George Mason for many years.

(Answers: T, T, T, T, F, F, F, T)

13 comments:

  1. Not surprising. Most of my liberal friends have no clue of basic economics.

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  2. That's a problem, Mr. A.

    And yet even so everyone in the country has a sneaking suspicion that the President's notion about spending our way out of the economic downturn is off, and in a very unsettling way. For his part he blames the economic woes on George Bush, which is utterly species, but that's a whole nother explanation.

    Thanks for your comment.

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  3. Nicely done, you showboat!

    : )

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  4. Actually I was pretty confident that you and Wakes would be unable to resist taking the test - and I was equally confident you both would ace it.

    So what, that puts you ahead of the Very Conservatives and the Libertarians.

    Nice.

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  5. I nailed them, but then I KNOW (and you do too) the comeback for all this.

    First, let me preface this by saying that free-marketeers (sorta has the alleterative jive of Three Muskateers, eh?) ALWAYS win on technical merits of their work.

    That is for certain. Even people who HATE capitalism will grudgingly say this. What they do NOT win, is empathy for being a smartass, or more importantly in the socio-economic-political context.....VOTES!

    The Left responds by saying these are E-Z Simple Simon questions and set-ups, sort of like Push-Polling, where the obvious answer his hinted by the nature of the question.

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  6. As to standard of living, that is true so far as it goes for our current level of fripparies and pleasures.

    Bet your bottom dollar though, in an age when all manner of things are blamed on "the free market" (such as it is with numerous and onerous controls and regulatory oversights and corruptions from union to boardroom political levels--see BP on this one) we'll see the "free market" blamed for the almost inevitable downturn when the nation goes semi-Eurosocialist in the upcoming decades. See Greece and Germany and the UK for more on this.

    In other words, we can always throw a wrench into that standard of living thingy.

    Well not "us" and in you and me and most of your visitors to this site. Rather, government largess and its many supporters.

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  7. Wakes, the point is that if there is a large voting block that does not understand basic economic principles, and they are choosing candidates to lead them based on what the candidate proposes and in fact does when in office, and the fix is worse than the problem (Hello FDR. Hello Barrack Obama) the nation will be in serious jeopardy, just as we are today.

    Educating the people on basic economic principles, and arguing for those policies that will operate successfully because of those principles has the possible benefit of keeping a people free.

    If basic economics were more widely understood, and the shenanigans that Christopher Dodd and Barney Frank pulled were more widely known, we'd have a chance to help this nation return to prosperity.

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  8. if there is a large voting block that does not understand basic economic principles, and they are choosing candidates to lead them based on what the candidate proposes and in fact does when in office, and the fix is worse than the problem (Hello FDR. Hello Barrack Obama) the nation will be in serious jeopardy..

    Agreed, of course. That day is here again, and this time we're apparently poised to have another wave of socio-economic Change We Can Get Discombobulated By, and the effects will be wide-ranging and certainly deleterious to the economy.

    We're now in the age of the Jobless Recovery, Orwell is spinning in his grave, and the culture is unfortunately shifting to a new ethos where people desire comfort and a type of Euro-cosseted poverty, as George Gilder called it, and politicians and governing elite have us at what some pundits would say is approaching a "tipping point."

    A point, that is, where it would no longer make much difference in voting trends and patterns. The reason being that with this kind of massive glop and handout, the bureaucracy defends itself.

    As Charles Murray said, we'll have that peculiar Euro disease of ignorance (as you described above just on the basics) combined with an infantilized populace.

    And all that goes with that kind of problem.

    ("Don't call me, I'm at the beach sucking down wine on vacation again.")

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  9. Don't you dare drop well reasoned, pithy retorts on my blog and escape to the beach, Wakefield, you wine swilling scrub!

    ; )

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  10. Ooh, wine! I knew I was forgetting something!

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  11. And as for you, young lady, sasheying about on vacation while we poor souls toil away with no end in sight...

    ... you have been missed.

    : )

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    ReplyDelete