[WS:] Yup. What surprises me is how little can economic theories (rational self interests yada yada yada) can explain of human behavior and how persistently folks stick to it despite this abysmal failure. I can understand neoliberals - they have vested interest in maintaining this science fiction - but liberals? Why on earth do they expect the grunts to "rationally act in their interests" and rebel against the elites. This is not how most people think.
I am quite impressed by the insights into this issue offered by George Lakoff (_Moral Politics_ , _The Political Mind_). In essence he argues that there are multiple rationalities that people employ to explain different situations (even the same person can have different rationalities for different situations) and these rationalities are framed by apriori beliefs that are not rational but rather based on values, beliefs etc. that come from metaphorical thinking. He argues that most people conceive politics in metaphorical terms as an analogy to the family, and different people use different family models to conceptualize politics.
Clearly, notions such as 'fiscal responsibility', 'frugality' "ability to pay for oneself" "irresponsible spending" are metaphors lifted from family finances and make little sense in macroeconomics (government deficit spending is NOT the same as mom and pop maxing out their credits cards!) Yet this metaphorical framing affects how most people think of political and economic issues and this kind of thinking is spoon fed to the public discourse by neoliberal and conservative shysters. That explains why, say, "hard working" Germans are though of as "frugal" and "responsible" while "laid-back" Greeks are seen as "wasteful" and "financially irresponsible." It is really only a notch above the most hackneyed ethnic stereotypes.
To understand how people actually think and make economic and political decisions you need to to turn to cognitive science, put the "rational self-interest model" into the rubbish bin where it belongs and disregard anything that economic has to say outside compiling national accounts and kindred macroeconomic statistics.
Wojtek
On Wed, Sep 7, 2011 at 11:44 PM, SA <s11131978 at gmail.com> wrote:
> On 9/7/2011 11:08 PM, Marv Gandall wrote:
>
>> An interesting chart...
>>
>>
>> http://www.economist.com/blogs/dailychart/2011/08/americas-fiscal-union?page=2
>>
>> I've got several questions about the United States, obviously prompted by
>> the eurozone debate over fiscal union:
>>
>> 1. Why, unlike in Europe, are voters in wealthier US states like
>> Minnesota, New Jersey, Illinois, Connecticut and New York relatively
>> unperturbed by fiscal transfers to poorer states like Alabama, Mississippi,
>> Montana, and West Virginia? Has this always been the case, including during
>> the American constitutional debates of 1787-1793?
>
> The answer is pretty obvious, no? Imagined communities, etc? Why do the
> folks in Munich object to paying for the Greeks' unemployment benefits, but
> not so much to paying for the Dusseldorfians' benefits? Why would the Nicois
> never accept paying benefits to Italians in Turin (right across the border),
> but it's okay to pay them to Bretons (much further away)? Same thing. By the
> way, in 1787, federal redistribution was tiny, mostly to do with the post
> office.
>
>
>> 2. Does the fiscal union impose spending discipline on the poorer states?
>> Do federal transfers come with strings attached, i.e. federal control over
>> state spending?
>
> Federal money often comes with strings attached, but usually in the
> direction of requiring *more* state spending (i.e., matching requirements or
> mandated minimum benefit levels). State-level spending discipline comes
> mostly in the form of state-level constitutional balanced budget
> requirements, and I don't think the fed. gov. has ever mandated or
> interfered in that area. I think every state but one or two has a balanced
> budget requirement. But they usually permit deficits run for capital
> projects (school building, etc.)
>
>> 3. Do the corporations based in the richer states which support these
>> transfers have any interests other than maintaining these markets for their
>> goods and services?
>>
>> It seems ironic that the states which most benefit from federal handouts
>> consistently support the Republicans and are ideologically hostile to "Big
>> Government", while the opposite is true for the richer states whose taxes
>> are funnelled to the poorer states. But poor rural states and regions
>> generally tend to be more conservative than more economically advanced ones
>> with large urban working class populations.
>
> There just isn't any geographically based interest like this in the U.S. -
> it's not like in Europe. National identity means something.
>
> There were strong regional economic conflicts of interest in the nineteenth
> century, but these weren't fiscal, since the fed gov spent very little
> money. They were about monetary policy and the tariff. (The exception was
> pensions for Union veterans, which, as you can imagine, were unpopular among
> Southern congressmen.)
>
> If you're looking for contradictions, why does the Chamber of Commerce not
> support a big stimulus package, since that would increase profits?
>
> SA
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