

How Obama used behavioral economics to win the election, and how he's using it to govern - gabrielroth
http://www.time.com/time/printout/0,8816,1889153,00.html

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bk
This is a peeve of mine: It's not "behavioral economics". It's social and
organizational psychology. Virtually all the research has been done by
psychologists. For example, Daniel Kahneman, Economics Nobel Laureate, is a
_Psychologist_.

"Smart" people and the media have been obsessed with "rationality",
(pseudo-)math and quantitative research, until it finally emerged in the
economistic world view that people are - surprise, surprise - not that
rational; something that psychologists have known for ages.

Right now, economics is sort assimilating a lot of psychological insights,
which is good for humanity, but it's not economics, the original creativity
stems from psychology.

~~~
nazgulnarsil
you're working off the strawman version of rationality. people are are
perfectly rational...from the perspective of small hunter gatherer tribes
inconstant conflict for status and resources.

~~~
jaytee_clone
I totally agree with you.

We were evolved to be rational, but only in the environment that we evolved
from. The environment we have now is far from small hunter-gatherer tribes,
yet we are still equipped with the same rationale mechanisms. Hence, it's not
working out perfectly.

Maybe if we restructure our society to simulate what it once was or at least
some parts of it, we can better utilize our rationale mechanisms.

~~~
nazgulnarsil
I shouldn't say we evolved to be _perfectly_ rational of course. it's more
that we evolved to approximate rationality in a manner more efficient than
actually calculating everything. see "how outfielders catch fly balls" as an
example of a rationality shortcut.

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sachinag
It's like they respect science and the notion of evidence-based decision
making or something.

~~~
jaytee_clone
More than they used to, so that's a step up.

Still, I'd rather see these resource being spent on educating the public on
behavioral economics as suppose to using the knowledge to manipulate the
public.

It's true that in most situations, indirect persuasion is more effective at
influencing someone's behavior than direct preaching. However, at some point,
the public needs "grow up" too, and always treating us like five year olds
certainly won't stimulate this process.

I hope these guys see that.

~~~
garndt
"However, at some point, the public needs "grow up" too, and always treating
us like five year olds certainly won't stimulate this process."

The public always has the ability to "grow up" as you put it but they do not
want to. People are not motivated to take action if there isn't an immediate
risk to their own personal well being. Risk has been taken out of many things
that we do so now we can make ignorant choices without immediate consequences.

We keep falling off the bike, but instead of scraping our knee and learning
not to fall, we have a security net there to save us over and over again.

I don't blame the government for treating us like 5 year olds when that is how
a majority of people act.

~~~
jaytee_clone
I agree with you completely.

But I also think it is possible to train yourself to manage your emotions
better despite how strong our instinctual wiring is. This is evident in the
long history of meditation practices.

So, it's good that the government is nursing us. And it will be even better
if, in addition to that, they integrate meditation, behavior economics,
entrepreneurial training courses, etc, into our education system. However, the
current education system is far from that.

------
ams6110
Summary: people are irrational and make stupid decisions. The government knows
better. Typical Time Magazine.

~~~
jacoblyles
Is this what normal people read all the time? I mean, they make statements
like this with no clarification at all:

"Our emissions are boiling the planet, and most of our energy use is
unnecessary."

What's "unnecessary"? Energy drives modern technology, from your desk to your
home to your doctor's office. Sure, if you don't care about quality of life,
then energy use is unnecessary.

And while most scientists think our emissions are going to cause an increase
in mean global temperatures over the next few centuries, "boiling the planet"
is a long way off.

That's just one example out of a dozen. Is Time an editorial magazine, or is
it supposed to be some sort of objective journalism?

That's not entirely a rhetorical question, I honestly don't follow dead tree
media and never got into it much as a kid.

~~~
mkn
_"Our emissions are boiling the planet, and most of our energy use is
unnecessary."_

 _What's "unnecessary"? Energy drives modern technology, from your desk to
your home to your doctor's office. Sure, if you don't care about quality of
life, then energy use is unnecessary._

Really? This is your complaint? By 'unnecessary,' we can reasonably presume
that the author means 'needlessly inefficient.' That much is evident to any
sincere reader of the article who cares enough about the pursuit of knowledge
to abide by the principle of charity: Put the best face on the argument before
you refute it, otherwise you are not contributing.

The straw-man argument, "Sure, if you don't care about quality of life, then
energy use is unnecessary," is wholly beside the point.

 _And while most scientists think our emissions are going to cause an increase
in mean global temperatures over the next few centuries, "boiling the planet"
is a long way off._

Again, this cannot be a serious complaint. The phrase 'boiling the planet' is
clearly a metaphor. A surface reading would be that we're just raising the
temperature of the planet to an unhealthy extreme. A more nuanced reading
reveals that the author means that we are raising the temperature of the
planet to such a high temperature that we are going to cause irreversible
change, such as when one boils food and finds that no amount of refrigeration
will bring it back to it's former state. More simply, we are doing something
analogous to sterilizing the planet, though to a lesser degree, in that many
species may ultimately be made extinct.

 _That's not entirely a rhetorical question, I honestly don't follow dead tree
media and never got into it much as a kid._

This is evident from the shallowness of your misguided critique. More practice
at reading, dead-tree media or otherwise, might have made you a skillful
enough reader to have been able to follow the plot here.

~~~
jacoblyles
There's no need to be so aggressive. And I think I made it clear that the
example I excerpted was only one of many offending sentences. I could easily
pull others, if I were motivated to use my time in such a way. The piece in
question made a quantity of assumptions that I normally only associate with
activist literature, and not supposedly objective journalism. I don't consider
that to be a hallmark of quality news.

~~~
DTrejo
He is reacting to a perceived attack on global warming.

There is no need attack the language as activist, which you do even in this
post.

The goal of the green movement, at its heart, is greater efficiency in all
walks of life. I think we all agree that efficiency is good.

So why does word choice matter if motivates us to become more efficient?

~~~
anamax
> The goal of the green movement, at its heart, is greater efficiency in all
> walks of life.

Except that it's not about efficiency. It's often about a suggested lifestyle.
(Hint - efficiency doesn't imply minimal.)

And, the "efficiency" arguments are often false and or irrational. (Nuclear
power anyone?)

~~~
ensignavenger
> Nuclear power anyone?

Yes please. You can build the plant in my backyard, I'll donate the land.

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jessep
Often when I'm confronted with a policy suggestion I think, "I can't possibly
know enough about the ecosystem that policy impacts to say whether the policy
would succeed." Not being a domain expert in most issues, I reserve judgement
on them. In this case, though, I don't.

As someone who obsesses about product design, usability etc., I just think
accounting for real world factors of human behavior is always a good idea. I'm
very happy to read this, and if you've ever noticed the difference between two
layouts for conversions on your site (or any small detail that makes a huge
behavioral difference), you should find this heartening too. Unless, of
course, you oppose the goals of the policy or policymaker.

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gills
And here I thought they were all just incredibly stupid.

But this is worse, they've ejected rational thought entirely from the policy-
making process.

We. Are. Doomed.

------
mklurfeld
Sort of fitting that a man who taught at the University of Chicago and who has
Larry Summers for an advisor would use economics for more than just balancing
a national budget.

~~~
patrickg-zill
Wow, the Hopeychange flavored Kool-Aid hasn't run out yet!

~~~
kirse
I agree, people want change but they hardly know what they're in for,
especially with universal healthcare "reform"... Some other recent notable
changes...

\- push to eliminate US nuclear weapons

\- encouraging an international currency and removing the US dollar from a
position of power

\- spending $3.55 trillion for 2010 ($400bn over '09), when we've already
committed $12.8 trillion to the recession

\- increasing the marginal tax rate to the highest levels since Clinton

\- letting North Korea get away with launching missiles over Japan

\- taking over private businesses and forcing out their CEOs

I guess you always need a Carter to usher in a Reagan.

...And bring on the drive-by downmods with no responses.

~~~
gabrielroth
OK, here's a response:

> push to eliminate US nuclear weapons

I have seen no evidence of anyone in the administration suggesting any such
thing.

> encouraging an international currency and removing the US dollar from a
> position of power

Ditto.

> spending $3.55 trillion for 2010 ($400bn over '09), when we've already
> committed $12.8 trillion to the recession

What's the problem with that? Be specific.

> increasing the marginal tax rate to the highest levels since Clinton

'to the highest levels since Clinton' means 'to a higher level than after
Bush's tax cuts.' Was the economy, and the federal treasury, in better shape
in 2000 (when Clinton left office) or eight years later?

> letting North Korea get away with launching missiles over Japan

Given that this happened two days ago, it's a little early to assess the
administration's response.

~~~
catz
> > push to eliminate US nuclear weapons

> I have seen no evidence of anyone in the administration suggesting any such
> thing.

Really? What about: "Obama Calls for Nuclear Free World, Says U.S. Will Lead"
([http://english.chosun.com/w21data/html/news/200904/200904060...](http://english.chosun.com/w21data/html/news/200904/200904060004.html))

Search Google news for US nuclear weapons.

> > spending $3.55 trillion for 2010 ($400bn over '09), when we've already
> committed $12.8 trillion to the recession

> What's the problem with that? Be specific.

Uhm... Spending huge amounts of money that the USA doesn't have isn't such a
good idea?

> > increasing the marginal tax rate to the highest levels since Clinton

> 'to the highest levels since Clinton' means 'to a higher level than after
> Bush's tax cuts.' Was the economy, and the federal treasury, in better shape
> in 2000 (when Clinton left office) or eight years later?

When Clinton left office there was a recession (in 2000 and 2001). It was
called the dot com bubble.

Oh. Also take into account that the Democrats controlled Congress the past few
years. So maybe it is the Democrat's fault for the current mess?

> > letting North Korea get away with launching missiles over Japan

> Given that this happened two days ago, it's a little early to assess the
> administration's response.

Didn't Obama want to cut ballistic missile defence?

~~~
mattobrien
There is a lot of parroting of talking points to unpack here. First, you
assume that drawing down our nuclear program is a priori bad. This is clearly
not so. Consider that the greatest threat of terrorists gaining access to
nuclear weapons comes from so-called looses nukes in ex-Soviet states. If
eliminating some of our weapons will induce them to do the same, this would
seem to lessen the chance that apocalyptic weapons will fall into the hands of
people who would use them. We could eliminate 9000 nukes and still have more
than enough to kill all life on the planet several times over. If the Russians
and other ex-Soviet states eliminate a commensurate number of weapons, I think
that'd be a good trade.

As for $3.55 trillion for 2010 - unfortunately, I think it's probably
necessary. Global manufacturing and trade are falling at rates faster than any
seen during the Great Depression. Debt levels are higher now than back then.
Deleveraging will take quite awhile. And while some have claimed Japan's
deficit spending during its lost decade failed, since growth petered out at
1%, Richard Koo of Nomura makes a fairly convincing case that this was
actually a success: they averted a full-scale depression, after all.
([http://paul.kedrosky.com/archives/2009/04/richard_koo_on.htm...](http://paul.kedrosky.com/archives/2009/04/richard_koo_on.html))

Saying that Obama has increased marginal tax rates to the highest level since
Clinton is a cheap rhetorical trick. I don't think top rates going from 36% to
39.6% represents the tipping point between capitalism and socialism. And lower
top marginal tax rates under Bush certainly didn't create a booming economy.
This is the worst economy in 80 years. Also, remember that under Eisenhower,
top rates were as high as 90%. However, those top rates only applied to
individuals with incomes around $75 million in today's dollars. I think
there's a convincing argument to be made for introducing more brackets at the
top of the tax bracket - lumping in people making 300k with people raking in
several million a year makes little sense. Nate Silver made this case a few
weeks ago.
([http://www.fivethirtyeight.com/2009/03/missing-1000000-tax-b...](http://www.fivethirtyeight.com/2009/03/missing-1000000-tax-
bracket.html))

Forgive me if I'm not scared about Obama firing CEOs of bailed out firms. Like
it or not, certain companies are judged to be too economically, socially, and
politically important to fail. If we're going to bail out these firms, getting
rid of the incompetents who brought them onto the dole seems like the obvious
first step. I wish Obama would get rid of Ken Lewis and the other banking
geniuses who played such a large role in bringing on this collapse.

Letting North Korea "get away with firing a missile over Japan." This is
disingenuous on so many levels. First, it was a dud, not a missile. Second,
it's not as if George W. Bush or Clinton was able to deter North Korea either.
Kim Jong Il is determined to starve his people to develop weapons. Short of
going to war - which would devastate Seoul and kill millions - there are no
good options aside from pressing the Chinese to press North Korea more
forcefully.

And finally, you are aware that ballistic missile defense does not actually
exist, and likely won't exist in the near future, right? It's something Reagan
made up and threw untold billions of dollars into to scare the Soviets. What's
the point of pouring money into a nonexistent technology - especially when we
are going bankrupt? Ballistic missile defense might be a bigger scam than
Bernie Madoff.

~~~
anamax
> Forgive me if I'm not scared about Obama firing CEOs of bailed out firms.
> ... If we're going to bail out these firms, getting rid of the incompetents
> who brought them onto the dole seems like the obvious first step.

Getting rid of incompetents sounds like a great idea. Too bad that Obama isn't
interested.

We're still waiting for the politcal class to take a hit. (Barney Frank
anyone?)

Heck - we're still waiting for Obama to fire advisors who ran Fannie Mae and
Freddie Mac into the ground.

> What's the point of pouring money into a nonexistent technology

It's unclear how being able to hit and destroy ballistic missles in certain
cases is "nonexistent technology".

Nope - it's not deployed, but ....

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Kyderdog
ha I tricked Obama.. I had our accounted take out extra money so I will get my
tax rebate in one big chunk when I file taxes.

