Must-Read: Mark Thoma: Restoring the Public’s Trust in Economists

Must-Read: Mark Thoma: Restoring the Public’s Trust in Economists: “The belief that economics has become politicized is a big reason…

…the general public has lost faith in… economists to give advice on important policy questions. For most issues, like raising the minimum wage, the effects of government spending, international trade, whether CEOs deserve their high compensation, etc., etc., it seems as though economists who also happen to be Republicans will mostly line up on one side of the issue, while economists who are Democrats mostly take the other. Members of the general public, not knowing who to believe and unable to rely upon the press to sort it out, either throw up their hands in frustration or follow the side that agrees with their preconceived notions and ideological beliefs. But why is it so hard to sort out? Why can’t the press do a better job of avoiding ‘he said – she said’ reporting and give the public direct and specific answers to these important policy questions?…

Physicists cannot assume whatever they want in order to produce an interesting or counterintuitive result, the assumptions must be consistent with the experimental evidence. Why isn’t the same true in economics? Why doesn’t the data tell us about key assumptions? Why is there so much debate about whether prices and wages are sticky, whether government spending multipliers are big or small, whether markets should be modeled as competitive, and so on?… When the data do not fully determine the appropriate modeling assumptions – when there is evidence on both sides of an issue – we ought to be open to models that make both types of assumptions…. In many other cases, the data do point in a particular direction but this is ignored or denied because it gives results that disagree with someone’s previous work, goes against their political leanings, or contradicts their preconceived conclusions…. We must find a way to make it clear what the preponderance of evidence says about important policy decisions… restoring the trust of the public that our policy recommendations are based upon solid evidence rather than ideology, pre-conceived beliefs, or cliquish political infighting.