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Advocates - for anything - generally present their arguments as absolutes, in the form of "This is 100% right and the alternative is 100% wrong." That might make sense for some topics, but does it ever make sense for a complicated issue, such as economics?

Economist Paul Krugman is a good example. He's smarter than I am, about economics in particular and probably most other things as well. But I get suspicious of his certainty when, for example, he advocates for increasing government spending in the short term as a way to boost employment now and reign in the deficit later.

I understand the argument, but is it 100% likely to be the best approach, or is it more of a 75% situation? He presents his case with a certainty that feels like 100%. And perhaps it is. I'm not qualified to judge it.

Whether he believes his proposed economic path to be 100% better than the practical alternatives, or 75%, our culture somewhat demands that it be presented as 100%. That's what advocacy is all about. If you believe one path has the best odds, you're somewhat ethically required to make the strongest argument you can.

Full stop: I don't want to discuss the best economic policy here. No one reading this blog will change his or her opinion on that topic. I'm more interested in what sort of argument is most persuasive. Would you be more persuaded by an argument that said one economic approach is 100% likely to be better or an argument that the odds are more like 75%?

Personally, I find lower odds more credible and therefore more persuasive. When I see economic plans presented as certainties, it feels like a political position as opposed to something closer to common sense or science.

I have a personal bias that only idiots have certainty about complicated issues. (The exception would be skeptics who don't believe in magic, religious or otherwise. I give them a pass for being 100% certain.) So when Krugman, who is brilliant, displays certainty on the economy - with his Nobel Prize and all - my brain automatically conflates him with idiots, and it weakens his argument.

So I wonder if it's just me. When you hear an argument about a complex issue presented as a certainty, do you reflexively downgrade its value? Or does the certainty mixed with a credible source make it more persuasive to you?
 
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Oct 13, 2011
The problem with Krugman’s statements isn’t his certainty, but his condescension toward any opposing ideas. He presumes that everyone knows the absolute truth (his viewpoint) and could only act otherwise out of devious self-interest.

A thoughtful person persuades perhaps by being confident, but also by considering other arguments, and explaining why his point of view is superior, not by demonizing anyone who disagrees.
 
 
Aug 31, 2011
I have the same issue with Rachel Maddow (democratic pundit), or any other pundit, in fact. I picked on Rachel because she at least builds up her position based on facts, and tries to build an argument as opposed to other people who simply fabricate suppositions to support their positions.

Her main issue is that she builds up the basis of her position with facts that support her position, but rarely shows potentially viable republican viewpoints (which may detract from the 100% certainty...).

I would much rather see a position that admits there are opposing viewpoints that may have merits (reducing certainty below 100%), but accounts for them or marginalizes them, as opposed to one that ignores them.
 
 
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Aug 18, 2011
Though I agree in principle that such certainty is suspicious, a few things come to mind...

First, Krugman has a pretty good record with regard to his predictions (see this study: http://www.hamilton.edu/news/polls/pundit/executive-summary).

Second, I'm not sure that using percentages is helpful in that they can't be verified after the fact. If Krugman states that something has a 75% chance of happening, then it doesn't come to pass, was his assessment correct? The only way to build credibility as a pundit is to make 100% predictions and then face the music of reality.

Finally, I think it is possible to make a 100% prediction without being 100% sure of the magnitude of the outcome. For example, Krugman might be 100% sure of "increasing government spending in the short term as a way to boost employment now and reign in the deficit later" will absolutely work (especially considering the alternatives), but without knowing to what degree.
 
 
Aug 17, 2011
Economics is a bad example. In economics you need people to believe it will work in order for it to work. So, being less than 100% sure will only make your approach less likely to work. Counterproductive. And economics is not the only area in which this is true. Think about war...and sending soldiers into battle. How will being less than sure affect the outcome?
 
 
Aug 16, 2011
You are way smarter than Krugman. I do not recall you saying the fix to anything was space aliens attacking, nor do I recall you advising a major energy company to flame out. The Nobel committee also gave Peace Prizes to Obama and Gore, neither of which were earned, so that weakens the Nobel prize as something to show he is smart.

Just sayin.
 
 
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Aug 16, 2011
Scott, you are 100% sure free will doesn't exist, no?
 
 
Aug 16, 2011
You are recognizing the Dunning-Kruger Effect and !$%*!$%*! for it.

From Wikipedia: The Dunning–Kruger effect is a cognitive bias in which unskilled people make poor decisions and reach erroneous conclusions, but their incompetence denies them the metacognitive ability to recognize their mistakes. The unskilled therefore suffer from illusory superiority, rating their ability as above average, much higher than it actually is, while the highly skilled underrate their own abilities, suffering from illusory inferiority. Actual competence may weaken self-confidence, as competent individuals may falsely assume that others have an equivalent understanding. As Kruger and Dunning conclude, "the miscalibration of the incompetent stems from an error about the self, whereas the miscalibration of the highly competent stems from an error about others"

Or in other words, the incompetent are more confident than the competent.
 
 
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Aug 16, 2011
quoted for reference:

[Cancer from smoking is always presented as a probability for any individual, not a certainty, which is exactly why it seems convincing to me. And while I agree that a government stimulus will increase jobs in the short term, there are other variables -- such as the psychology of yet more government debt -- that makes the ultimate outcome less than 100% certain in my mind. -- Scott]

But it is 100% certain that some cases of cancer are caused by smoking; this is why they can force cigarette companies to put things like SMOKING KILLS and SMOKING CAUSES CANCER (definitely a big marketing downer) in huge print on the front of cigarette packages in the EU.

As for Krugman being so certain a real issue is understanding precisely what he is so certain about and in particular what assumptions is he basing this certainty on. If we assume that creating more jobs, right now, is essential then there really is only one solution open to the government and that involves large amounts of spending. There is no known (and credible) alternative so that makes it easy to be 100% certain.

Now, I'm fine with questioning the underlying assumption of whether or not creating more jobs right now should be our top priority (or one of our top priorities) but I think you would have to be insane or a cartoonist (or both) to do this publicly.
 
 
Aug 15, 2011
Scott,

I agree with you 100%. But I have learned the hard way (i.e., getting fired) that most people are more comfortable with people who state things with 100% certainty, especially if there is great complexity. In my business, I have the greatest faith in my staff members who present all the nuances of a situation and a realistic view of the risks for different decisions. Unfortunately, I think most decisions makers prefer being told what to do.
 
 
Aug 15, 2011
Krugman is only certain insofar as he believes economics to be a hard science, in which there is a generally understood area of 'right,' contention over other things and a lot of economic talk that is simply, plainly wrong.

Think of it as being like meteorology: because the underlying inputs interact in complex ways, the weather forecast can be wrong. But it won't be wrong for long, chances are it won't be severely wrong when it is wrong, and the tendency is towards being right.

Krugman would agree that time and chance happen to us all, and no economic theory will always produce a specific outcome at a specific time in a specific amount. His rightness goes to the nature of his argument, not the result; he's always implicitly saying "Do this and it should work. Do that and I can guarantee it won't work."

Scott A.
Watertown NY
 
 
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Aug 15, 2011
There's a lot of jokes about economists (I have a whole book on my Kindle).

John M. Keynes: "If all of the economists in the world were laid end to end, they would not reach a conclusion."

It reminds me of the old Jewish joke about the two Jews who were marooned on a desert island and built three synagogues.

Economists don't mind contradicting themselves, especially when they have been proven wrong. Since that happens rather frequently (some economists believe the market is chaotic, others that it is a perfect processor of information), economists constantly contradict themselves and everybody else. Remind you of anybody you know?
 
 
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Aug 15, 2011
You have probably heard of the multiplier effect. It is the knock-on effect of economic activity or spending--you buy food, your grocer makes a profit, pays his supplier, pays his bank the interest on his running balance, etc., and then the people who receive this money spend it, or invest it, or save it, and more economic activity is generated.

Well, if you study the different ways that the Government can boost the economy through the multiplier, you will find that welfare and unemployment insurance have the two largest multipiers--almost all of this money is spent by the beneficiers, and that drives more economic activity than, say, giving the money to Scrouge McDuck, who will use it to light cigars or toss it into his money swimmming pool.

Krugman has, in fact, pointed this out, cited sources, etc. He clearly understands that government spending is not all created equal. He is not a fool. He knows that you can mix different strategies and that some of them are sure-fire and others less so. He knows that you can make an infinite variety of menus to all tastes and some of them will boost the economy more, some less.

He is a Nobel Prize winning liberal economist. Yes, he is one of the most partisan journalists around, but he is also one of the brightest economists around. You should give credit where credit is do and listen to him seriously because he is more often right than most economists. As a neo-Keynesian, he is also an expert on how the abandonment of Keynesian boosts to the economy in favour of cuts, cuts, cuts created the second half of the Great Depression, a very famous double dip recession, just like the fool conservative shibboleths are doing now.

Obama seems to be making the same mistakes as FDR. This is probably because, like FDR, he is an elitist liberal-conservative who is easily tempted to listen to the wrong sort of economists because his natural instincts are right of centre.

http://www.colbertnation.com/the-colbert-report-videos/340746/july-05-2010/unemployment-benefits---paul-krugman

Any money given to the poor is more likely to find its way into the economy directly and quickly than money given to the more prosperous. It is one of the reasons why consumer demand is a key driver of the economy. Consumers spend. The rich don't spend a lot compared to their income or wealth. The poor can't. Governments often spend unwisely (at least from a purely economic viewpoint), but the consumers drive growth by spending freely and contract it by holding on to their money.

If everybody saved every penny, the economy would collapse. This passes a test devised by Emmanuel Kant to determine where an action is moral or not. Being a miser is not moral. Being a spendthrift is not moral. Being a liberal is moral because you spend freely and to the benefit of your friends, family, community and the needy.
 
 
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Aug 15, 2011
The basic functioning of an economy isn't complex. Any spending is the fuel for any economy, if all spending were to stop the economy would collapse. If too much spending occurs then items will inflate in price.

One way to control spending is through tax rates, increase taxes you reduce the amount people can spend (I'm 100% certain of that). Decrease tax rates and people will have more to spend but there is no guarantee they will spend it. If people/businesses are nervous about the economy they cut back on their spending which further hurts the economy which then makes people more nervous (return to the start of this sentence until you understand).

The only way to guarantee spending is if the government does it to stimulate the economy, one of Krugman's very good points is to do infrastructure spending now while labor and material is cheap. The US spent its way out of the Great Depression, the spending spree was called WWII and most of the goods/services produced revolved around blowing stuff up. Krugman ran the numbers BEFORE the last stimulus and he said it wasn't big enough, I'll trust him over someone who hasn't done the number crunching (George Will is one weasel who comes to mind who constantly repeats that the stimulus didn't work).

I don't see the complexity here other than educating people on basic economics.
 
 
Aug 15, 2011
I think the average person is more persuaded by the claim of 100% certainty, because that sounds like confidence but having only 75% certainty sounds like a lack of confidence, even if it's wholly accurate. I agree with you that having 100% certainty seems to not be very credible, but I wonder how many experts who talk to the media realize that the average person is persuaded by the appearance of confidence. So it makes me wonder if experts will take a solution with 75% certainty and state it as if they have 100% certainty because they know or think that it's the only way to persuade anyone. That would make it impossible to tell who is credible based on how strongly they argue their point, which is probably the single greatest problem in politics today. I suppose I would say that someone who is credible in a subject otherwise and tries to argue with 100% certainty within that field I tend to believe them. Unless of course it's about economics, politics, psychology, finance, religion or just about anything else for that matter.
 
 
Aug 15, 2011
Einstein was reported to have defined "insanity" thusly: doing the same thing over and over again but expecting to get different results.

As I recall from psychology class, the stronger and with more certainty a particular idea is proposed, the more you will sway public opinion toward that point of view. While it may be more reasonable to express some doubt about the correctness of your proposal, it seems to be more effective to pretend that opposing points of view are either ridiculous or evil. The Washington standard political ad hominem attack is evidence of that. How often do you see a politician preferring to support his/her own position rather than questioning the integrity of someone on the other side?

Personally, I tend to believe someone more if they can back up their position with examples of where it has worked in the past. In Mr. Krugman's example, if he had said "The nearly $1trillion stimulus resulted in 9.2% unemployment, economic growth going from negative to 1-2%, and reduced federal revenues, so I think we should do it again," the average person would consider Mr. Krugman to fit Einstein's definition of insanity.

If another person were to point out that every time taxes have been reduced (Kennedy/Johnson, Reagan, Bush), the economy has grown, unemployment has dropped and federal revenues have increased, and so he/she was proposing that we do just that, at least he/she had pointed to real results that backed up that point of view. When I listen to "experts" speak, I tend to look for examples rather than believe them based on their zeal in expressing their point of view.

So my approach to people proposing solutions to problems is to see how they have worked in the past. If the response is to say, in effect, "Well, it hasn't worked before, but that's because it wasn't done correctly, or done large enough, or. . .," I tend to discount that position. Regardless of how certain they are of their position (or questioning of it), I concentrate more on the results than on the rhetoric.
 
 
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Aug 15, 2011
When the subject is fairly complex there are still a lot of things you can say with 100% certainty at a fairly general level. For example we can say that, with 100% certainty, that smoking causes cancer. Now it doesn't cause cancer in everyone and it doesn't always cause the same kind of cancer. Also you can always find people with advanced degrees who, if you pay them enough, will say smoking doesn't cause cancer and they can design tests they will claim shows smoking doesn't cause cancer. You have to look at the kind of claim that is being made.

So I think the idea that the government spending money will stimulate the economy and create jobs is a 100% certainty. The real question of uncertainty is in the details: How much do we need to spend? What is the return on this spending? When is the best time to spend? What kind of spending provides the most stimulus for the economy? What kind of spending creates the most jobs? Will the spending trigger inflation and if so how much? Those are all questions where the answers aren't certain.

[Cancer from smoking is always presented as a probability for any individual, not a certainty, which is exactly why it seems convincing to me. And while I agree that a government stimulus will increase jobs in the short term, there are other variables -- such as the psychology of yet more government debt -- that makes the ultimate outcome less than 100% certain in my mind. -- Scott]
 
 
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Aug 15, 2011
You seem to be 100% certain on religious issues, which makes me doubt your conclusion in that regard.
 
 
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Aug 15, 2011
Another good example is former NASA administrator Michael Griffin. He is a brilliant engineer with multiple degrees, and for a short time (too short, in my opinion) led NASA.

As an engineer, he would talk straight and use typical engineering analysis lingo. Nothing is ever 100% to an engineer.
So, when he said that the shuttle was probably not the right path and that he would have done something different if the decision was his, the USA Today media picked that up and put the 100% spin on it "NASA administrator says space shuttle was a mistake!"

This is why engineers get lambasted in the political arena.
 
 
Aug 15, 2011
I think anyone who believes they are 100% right about anything is an idiot. Change happens. Maybe what one thinks is right is 99% right in this minute, but what about in the next minute? If one is not bright enough to realize that change is constant and therefore all options are variables, one should keep ones opinions to themselves. Of course, I may be wrong. :D
 
 
Aug 15, 2011
Scott,
This ties nicely onto your previous blog about scientific theories that are proven wrong. Our culture does not value quantitative analysis but prefers a decision and an action based on that decision. Sometimes you have to act and need a decision right now. But not always. Any guesses at how often?

The super divisive politics of our age makes this worse. Calling evolution or climate change a theory is equivalent to dismissing it. So everyone, left and right, exagerates their certainty and reviles the other side. The worst result of this trend is that evidence is not presented or discussed. This makes it increasingly hard to evaluate the competing positions.

I see more and more people give up trying to evaluate arguments and just picking a side. I have one friend who agrees with everything Paul Krugman writes and others who dismiss him just as completely.
 
 
 
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