Scary stuff. These economists sound like De Long, just a bit further
right.
Gene Coyle
On Feb 28, 2008, at 7:46 PM, ravi wrote:
<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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