On November 3rd, the president of the United States spoke at the Hotel Lowry in St. Paul, Minnesota, in what was billed repeatedly as a bi-partisan address. The president ridiculed reactionaries in Congress who he claimed represented the wealthy and the powerful, and whose “theory seems to be that if these groups are prosperous, they will pass along some of their prosperity to the rest of us.” The president drew a direct line between prosperity and increased “fairness” in the distribution of wealth: “We know that the country will achieve economic stability and progress only if the benefits of our production are widely distributed among all its citizens.” The president then laid out an ambitious agenda focused on creating jobs, improving education, expanding health care, and ensuring equal rights for all.
Addressing his opponents in Congress, the president said “[t]here are people who contend that . . . programs for the general welfare will cost too much,” but argued “[t]he expenditures which we make today for the education, health, and security of our citizens are investments in the future of our country . . . .” Giving a specific, and favorite, example, the president argued that government investments in the areas of energy are “good investments in the future of this great country.” Building on the meme about great countries doing great national projects, he praised the Louisiana Purchase, which brought Minnesota into the Union, and compared congressional critics of his past and proposed spending to those who argued President Jefferson should not have been allowed to borrow to buy “Louisiana” from Napoleon.
The speech was given on November 3, 1949, and the president was Harry Truman. But it could just as easily have come from the mouth of our current president, despite the fact that President Obama’s December 2011 speech in Osawatomie, Kansas was allegedly invoking President Teddy Roosevelt. In fact, we could play a game – call it, “Harry or Barry?” (as the president was called for most of his life) – to see how little has changed since 1949:
“[The Republican theory seems to be that] if the winners do really well, then jobs and prosperity will eventually trickle down to everybody else.” Harry or Barry?
This one is from President Obama, but President Truman also described Republicans as deploying a “trickle down theory.”
How about this one: “Our economic frontiers can be expanded only if we follow sound public policies. We must rely, as we have always relied, upon the spirit of initiative and free enterprise. But we know that it is necessary for the Government to follow policies that will make it possible for initiative and free enterprise to succeed.” Harry or Barry?
This one is from President Truman, but President Obama used virtually identical structure, argument, and language: “Yes, business, and not government, will always be the primary generator of good jobs with incomes that lift people into the middle class and keep them there. But as a nation, we’ve always come together, through our government, to help create the conditions where both workers and businesses can succeed.” There could be many rounds to this game.
President Truman’s speech was not well received by his critics. The New York Daily News chose an interesting way to respond. Instead of a standard editorial pointing out the weaknesses or errors in the president’s remarks, the editors reprinted a poem allegedly written by a Georgia Democrat (Republican in today’s parlance) that was reproduced in the Congressional Record at the behest of Ohio representative Clarence Brown, who served from 1939 until his death in 1965. (In the small-world category and for full disclosure, Representative Brown’s grandson was roommates with my brother at the University of Virginia.) The poem is reprinted here:
The editors objected to the president’s “pie-for-everyone speech” the night before in ways that modern-day Republicans can identify with. In fact, I’ve received over two dozen separate emails forwarding me the newspaper clipping in the past month, all from full-throated critics of our current president. All of them focused on two aspects of the poem: it could have been written today, and it was humorous (to them).
It is remarkable that our political debates have not changed much in the past six decades, at least. The battles being fought then, about unions, taxes, tariffs, education, and energy, might seem far removed from our experience, since much has changed in 60 years, but the underlying political disagreement is the same as the behind today’s debates about the same set of issues. In 1949, unions represented more workers, taxes were much lower, tariffs were far higher (in most areas), and energy issues were largely about electrifying rural American, but the political rhetoric applies equally well to today’s debates about these subjects. After all, there is not much difference in the political argument that the government should “invest” in energy, whether it is about brining electricity to rural farms or trying to change the source of this electricity from coal to solar. In both cases, the claim is about the role of government in guiding and regulating the market, something that endures no matter what else changes.
It is also interesting that the rhetoric we use has not changed much either. On the affirmative side of the debate about more government intervention in the economy, appeals are made to past where government intervention is thought to have been good for social welfare. Truman used the Louisiana Purchase; Obama cited the Interstate Highway System. The theme is picked up by media surrogates for the president, as anyone who has seen MSNBC News anchor Rachel Maddow standing in a blue hard hat in front of Hoover Dam waxing poetic about the era of massive dam building in the west can tell you. Putting aside the merits of any of these projects, any social scientist will tell you that this type of reasoning is suspect. Anecdotes are not science, and a dataset of 1 or 5 examples does not prove anything.
But often this is all we have. For example, in a recent debate about the wisdom of government intervention in the alternative energy market, I took the negative side, and cited numerous examples of failures: “clean” coal; the hydrogen car; ethanol; the Clinch River Breeder Reactor; the Synthetic Fuels Corporation; and so on have consumed billions of dollars of taxpayer money, and yet the percentage of our energy that comes from fossil fuels has not changed one bit since the time of Truman. These examples allegedly support my claims about the inherent problems of governments trying to act like businesses. Government agents have weaker incentives, are subject to less competition, and have a monopoly on violence, which, at the least, invites rent seeking by those looking to wield it.
But this is just a theory, and the scientific method is about testing theories with evidence. My examples, however, are just anecdotes, and as such may simply be salient for me because they confirm my pre-existing political perspective, what economists call my “priors.” Maybe there are lots of counter examples out there – e.g., government investment in cancer research or the Manhattan Project or any of the work done by Darpa – that I conveniently ignore.
What we would want is a scientific study comparing government investments in, say, energy technology with private ones. Or, an assessment of what the world would look like in terms of welfare had the government not made the expenditures it did. But such studies are very hard to do, both for lack of good data and tests and the fact that rerunning history is impossible. In the absence of an empirical test both sides could believe in, the battles will remain fought at the level of assumptions: one side will see government solving market failures while the other will see government manipulated by private interests into doing what is good for some at the expense of taxpayers. I don’t know why some people look at capitalists and see the enemy of progress, while others look at them and see the hope of progress, but that is the world we live in, and I’m not sure politics does much more than move a few folks in the middle to believe a little bit more strongly in one side’s anecdotes.
A common technique for doing this persuasion is humor, and the opposition deploys it most commonly. The poem used by the editors of the New York Daily News to respond to President Truman’s speech is a classic example. Why is humor an effective political tool? The genius of a joke is that it takes a very complicated idea and distills it to as pithy and concentrated element as possible. I suspect people remember jokes better than other content, perhaps because people have been memorizing and retelling jokes since they were kids. Jokes are portable, and they make people happy while making them think. Everyone likes to make people smile and laugh, and everyone likes to smile and laugh. In addition, the form of jokes is particularly memorable – a set up and punch line – which makes them like a ten-digit phone number. Just as poems were effective ways of story telling long ago because of cadence and structure, I imagine the same is true for jokes. (Charts and graphs can be effective too, in the spirit of a picture tells a thousand words, but they are less powerful since they can be repeated less efficiently than verbal stories. As the Internet makes transmitting charts easier, one would expect them to become more important in political story telling. If my email inbox is typical, this is already happening.)
In my own life, I think the power of humor explains a lot of my formative views about politics. At a recent faculty lunch at the university where I teach, about 15 of us were discussing where our political beliefs come from. I guessed family or, more specifically, our parents. To test this, we went around the table, and only one of us had political views that were the opposite (more or less) of our parents. I’m certain this group is not representative of America, but it wouldn’t surprise me if most Americans share the politics of their parents. Why?
This got me thinking about my own upbringing and the source of my baseline beliefs about politics. My favorite quote that summarizes my priors is from Aaron Director, a predecessor of mine at the University of Chicago: “Laissez faire has never been more than a slogan in defense of the proposition that every extension of state activity should be examined under a presumption of error.” But why does this point of view resonate with me?
Searching back through my childhood, I do not remember ever engaging with my parents about politics – ever. We did not discuss the tax reform of 1986, whether we should withdraw nuclear missiles from Germany, or whether Robert Bork would make a good justice. But I do remember two jokes I heard my dad tell; in fact, they were the only two jokes I ever heard my dad tell. Just as Woody Allen could summarize his perspective on life at the beginning of “Annie Hall” with two jokes from his childhood, so can I about my views about politics.
The first, which I remember from a very young age, goes like this: “How do you know Christopher Columbus was a Democrat? . . . He didn’t know where he was going; he didn’t know where he was when he got there; and it didn’t matter because someone else was paying for the trip.” The genius of this joke is that every elementary student knows the story of Columbus, and the idea about incentives – that is, not caring as much when spending other people’s money – is central to the way Republicans criticize Democrats. I heard my dad tell this joke no less than 50 times. I laughed every time.
If you asked me to crudely lampoon the views of those on the Left, I’d start with this joke. It is, of course, untrue and unfair in both its use of facts and in its characterization. But as a set up, it is unexpected, memorable, and reveals something with at least more than a bit of truth.
The second joke, which made sense only much later, goes like this: “Three men are deciding how to split up a dinner check. The first says that they should split the check three ways. The second says, ‘I’m on an expense account, so I can pay and charge it to my company.’ The third jumps in and says, ‘I’m working on a cost-plus contract with the government; I’ll pay and make money on the deal!”
At first blush, the story is the same as the first joke. But although the payoff of the joke is about the government’s incentives to bargain well given the imperfect monitoring of government agents by taxpayers (or their representatives), the issue of agency costs is raised by the second diner as well, since he is offering to steal from shareholders in only a slightly less perverse way than the third diner is offering to steal from taxpayers. But putting aside this nuance, if I had to identify the root of my political priors, it would be these two jokes, which I heard my father tell over and over. In fact, I still hear them told to this day.
But maybe jokes are, well, just for kids. I don’t think so. The most successful political communicator of my lifetime was President Reagan, and he deployed humor to concentrate the mind on his point of view in remarkable ways. Without Google, I remember many Reagan jokes that captured his political perspective. Paraphrasing: “What is government’s view of the economy? If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Or how about this one: “What are the nine scariest words in the English language? . . . I’m from the government and I’m here to help.” As with my dad’s jokes, if we parse these or subject them to rigorous analysis, they fall apart a bit. If the fire department shows up to save your house, you won’t be scared when they say they are there to help.
But at the level of jokes, they work well and effectively transmit Republican ideas about government. Reagan was really channeling Director’s definition of laissez faire – a presumption of government error that can be overcome, as it would be in the case of the fire department. Starting points matter though, and thus the Reagan view is simply that starting from a default of harm, the government will do less damage in the end given our presumption against its application of power. Reagan’s joke, as faulty as it is, transmits the idea far more effectively and more broadly than Director’s definition.
But jokes about policy can be more highbrow. Milton Friedman was the most influential economist on the Right in the last century in part because he was so effective at communicating complex ideas in simple to understand forms. If you want a lesson in free-market economics, go to YouTube and watch videos of Friedman on the Phil Donahue Show, talking to college students, or in his “Free to Choose” series on PBS. Friedman was also a great joker.
Here are two examples. When I was in high school, I read Free to Choose, which he wrote with his wife, Rose. The thing I remember the most some three decades later is his “joke” about the four ways to spend money. The joke is a short hand for the more substantive content of Friedman’s ideas. Here is the “joke”:
First, you spend your money on yourself. In this case, you have strong incentives to get as much as you can for each dollar you spend. Second, you can spend your money on someone else. Incentives are less well aligned in this case, since you care more about how much you spend than the value the recipient will get. Third, you can spend someone else’s money on yourself, in which you’ll overspend, since you care more about value than cost. Finally, you can spend someone else’s money on someone else. In this case, you have little incentive to care about how much you spend or the value received per dollar. As Friedman tells it, this is government.
This is funny, at least to those inclined to agree that government incentives are often perverse. It is memorable too. I can retell it virtually as written in the book, even though I haven’t picked up Free to Choose in decades. It is also a powerful frame setter. During a recent debate about government “investments” in clean-energy, like the infamous loan to now-defunct Solyndra, I used the Friedman joke to set up my remarks. Although I like to think the content of these remarks was richer and more nuanced than the joke, it enabled me to connect the core idea in a simple way that contextualized and personalized my remarks.
Again, if we parse it rigorously, there is a lot to criticize or elaborate on. Many of the problems of the modern welfare state find their problem in the third way of spending money, not the fourth. The growth in medical spending, for instance, finds its roots in the fact that individuals spending taxpayer money or fellow policy holder money will care less about how efficiently it is spent than if they were spending their own money. My kind of Republicanism is about trying to use markets effectively to get as many people from the third group into the first group. But this idea is also Friedman’s, and he proposed using a negative income tax – effectively a cash payment to the poor to get them to a politically agreed upon minimum income level – as the mechanism.
The third case is also not limited to government. The classic example here is an expense account where the inverse of the problem in the second case obtains. When spending your money on someone else, as in buying a present, one has incentives to care about the cost but not as much about the value, while in the third case the opposite is true: you have weaker incentives to keep the costs down and stronger incentives to make sure the value received is high. This third way of spending money corresponds with the third diner in my dad’s joke above, and represents an example of agency costs within any organization. The costs created by the mismatch of cost and benefit, by the costs of monitoring owners will exert in light of the problem, and the costs agents will exert hiding such behavior will all reduce social welfare. This is true in corporate America, as well as politics, and it cuts to the heart of debates about executive compensation, takeover defenses, and director liability, as well as the power of government.
Friedman’s other joke is about macroeconomics, a subject deeply impenetrable to most people, including me. The joke goes like this: “What are the two ways to produce cars? . . . You can build factories to make the parts and hire workers to assemble them in Detroit or you can plant seeds in Kansas, harvest the wheat, ship the wheat to Japan, and the boats will come back with Toyotas on them.”
Although not a knee-slapper, there is enormous content in this story. It describes in short, memorable, repeatable, and a smile-producing way much about protectionism, trade policies, how to think about imports versus exports, and so on. If you want to convince someone to be a free trader, there might be no more effective way to do it than to tell them this little joke.
Although jokes can hurt, can overly simplify, and can mislead, so too can presidential speeches when our political debates necessarily occur at the level of abstraction exemplified by the excerpts from presidents Truman and Obama noted above. Social scientists toil away looking for data or empirical proof of this or that, but it is very likely a poem or a joke is far more powerful at conveying the core idea.