Some concepts I think that it would be useful for reporters to know:
"broken windows" fallacy. Wars don't create jobs on net--war-related jobs supplants jobs that would've been created by providing non-war related goods/services.
"seen vs. unseen"
How FDA regulations actually harm health by preventing drugs/products that would otherwise be developed but aren't because of the costs involved. The asymetric incentives faced by regulators -- if they allow a drug that causes "babies with flippers", they face lot's of political flack; whereas, if they approve a drug that saves millions of lives, they don't participate in any of the upside. Therefore, their incentive is to be excessively conservative. In addition, the people harmed by FDA regulation may never even be aware that they were harmed so no consituency for political reform doesn't develop.
"rational ignorance/irrationality" -- why it doesn't pay voters to be informed
"unintended consequences/secondary effects"
-- Child labor laws in developing countries doom children to prostitution, starvation.
-- Minimum wage laws originated in the South to keep newly freed blacks from competing with whites--why should we expect them to have a different effect now?
-- ADA law makes it more difficult for handicapped to be hired, because it's easier to refuse someone a job in the first place, than risk getting sued if you fire them.
-- Rent control laws doom poor to expensive/crowded housing by destroying builder's incentive to create new housing.
-- Drug laws resulted in increased overdose death due to higher potency drugs, non-uniform doses, and inability of users to sue bad drug makers.
-- Anti-immigration laws result in sweatshops because illegals can't get other kinds of jobs due to fear of legal persecution.
-- "conservation of risk" -- Airbags didn't decrease fatalities as much as was expected because driver's took greater risks in cars in airbags than in cars without.
-- Banning alar and other pesticides may result in more deaths as fresh fruits and vegetables cost more without them, and therefore people will eat fewer.
Chris
Alex Tabarrok wrote:
I will be giving a 15-20 minute talk to a bunch of journalists and proto-journalists ( most of them are editors of student university newspapers) about what economics has to offer journalism. I am interested in the suggestions of list members as to what the most important lessons economics has to teach. I have a number of thoughts myself, of course, including
comparative advantage (veneer of competition hides much cooperation)
public choice (qui bono? look for the organized exploiting the unorganized)
tradeoffs/all good are economic goods (e.g. safety)
amazing economic/business stories that are not told (I have in mind here "I Pencil"/"How Paris is Fed" stories about the great complexities of modern markets that people take for granted.
Other ideas? Thoughts? Specific examples?
Alex
