Max,
I was thinking of their solid marriage to neo-classical economics --
just tweaking it with a little behavioral adjustments. The following
quote is what scares me -- what put the kibosh on the Notre Dame econ
department, to all of our loss:
Like their intellectual godfather Thaler, the Obama wonks aren't
particularly interested in tearing down existing paradigms, just
adjusting and extending them when they become outdated. (Thaler
urges his students to master the same traditional, mathematical
models their colleagues do if they want to be taken seriously.)
It is true that to be "taken seriously" you need to demonstrate that
you won't think much about the theory, but when is CHANGE going to
happen?
Gene
Pragmatism and automatic 401k enrollment with voluntary opt-out is
scary?
You need to start every morning with some Wheaties.
Eugene Coyle wrote:
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>
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