<http://www.tnr.com/politics/story.html?id=4d40a39e-8f57-4054-bd99-94bc9d19be1a
>
As it happens, Thaler is revered by the leading wonks on Barack
Obama's presidential campaign. Though he has no formal role, Thaler
presides as a kind of in-house intellectual guru, consulting regularly
with Obama's top economic adviser, a fellow University of Chicago
professor named Austan Goolsbee. "My main role has been to harass
Austan, who has an office down the hall from mine, " Thaler recently
told me. "I give him as much grief as possible." You can find subtle
evidence of this influence across numerous Obama proposals. For
example, one key behavioral finding is that people often fail to set
aside money for retirement even when their employers offer generous
401(k) plans. If, on the other hand, you automatically enroll workers
in 401(k)s but allow them to opt out, most stick with it. Obama's
savings plan exploits this so-called "status quo" bias.
And, yet, it's not just the details of Obama's policies that suggest a
behavioral approach. In some respects, the sensibility behind the
behaviorist critique of economics is one shared by all the Obama
wonks, whether they're domestic policy nerds or grizzled foreign
policy hands. Despite Obama's reputation for grandiose rhetoric and
utopian hope-mongering, the Obamanauts aren't radicals--far from it.
They're pragmatists--people who, when an existing paradigm clashes
with reality, opt to tweak that paradigm rather than replace it
wholesale. As Thaler puts it, "Physics with friction is not as
beautiful. But you need it to get rockets off the ground." It might as
well be the motto for Obama's entire policy shop.
<snip happens>
==============
--ravi
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