Brendan Nyhan

Senate Minority Leader Mitch McConnell yesterday repeated the all-too-common claim that tax cuts increase government revenue:

That’s been the majority Republican view for some time… [t]hat there’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject.

However, as I’ve repeatedly pointed out, virtually every credible economist disagrees. Even Bush administration economists repeatedly found the courage to disavow the claims of their political superiors — here’s a review:

-In the 2003 Economic Report of the President, CEA wrote that “[a]lthough the economy grows in response to tax reductions… it is unlikely to grow so much that lost tax revenue is completely recovered by the higher level of economic activity.”

-During his 2003 Senate confirmation hearings to replace Hubbard as CEA chair, Greg Mankiw was asked about Club for Growth president Stephen Moore’s opposition to his nomination. Mankiw responded that Moore was criticizing “a passage [in Mankiw’s writing] where I had raised skepticism about claims that tax cuts would generate so much employment growth as to be completely self-financing. And I remain skeptical of those claims.”

-A Treasury Department analysis contained in the Office of Management and Budget’s 2006 Mid-Session Review concludes that the tax cuts will not pay for themselves in even the most optimistic scenario. As the Center on Budget and Policy Priorities writes, Treasury found that “making the President’s tax cuts permanent — and paying for the tax cuts with future reductions in spending — may ultimately increase the level of economic output (national income) in the long run by as much as 0.7 percent… Even if an increase in the level of economic output of 0.7 percent ultimately were to result from making the tax cuts permanent, the effect of this assumed additional economic growth would be to offset only a tiny fraction of the cost of the President’s tax cuts.”

-CEA Chair Ed Lazear told the Washington Times in September 2006 that “We do not say that the tax cuts pay for themselves.”

Presumably these people are not biased against conservatives or tax cuts. And yet their findings and conclusions are ignored, and the magical thinking persists.

Update 7/15 6:29 AM: Derek Thompson at The Atlantic compiled a similar list, which includes these additional quotes:

2) The chair of CEA from 2003-2005, Greg Mankiw: “Some supply-siders like to claim that the distortionary effect of taxes
is so large that increasing tax rates reduces tax revenue. Like most
economists, I don’t find that conclusion credible for most tax hikes,
and I doubt Mr. Paulson does either.”

3) He’s right! Hank Paulson, Bush’s last Treasury Secretary, doesn’t: “As a general rule, I don’t believe that tax cuts pay for themselves.”

4) That opinion was shared by Andrew Samwick, Chief Economist on Council of Economic Advisers, 2003-2004: “No thoughtful person believes that this possible offset [the Bush tax cuts] more than
compensated for the first effect for these tax cuts. Not a single one.”…

5) … and Edward Lazear, chair of the Council of Economic Advisers in 2007: “I certainly would not claim that tax cuts pay for themselves.”

Sean Trende at Real Clear Politics has written an ambitious new post arguing that the state of the economy is not necessarily “principally responsible” for President Obama’s approval ratings, pointing to posts by Jon Chait (citing me) and Ezra Klein:

There is no doubt that, as a general matter, the economy is an important factor in driving a President’s approval (this is also true for midterm elections, see my writing here). But it is far from clear the economy is what is principally responsible for driving down President Obama’s approval rating and engendering a Democratic debacle in the fall…

Obama’s approval ratings are almost certainly influenced by economic conditions. But a controversial energy bill, a prolonged, contentious fight over health policy, and yes, even a “snakebit” response to the oil spill, have had a substantial effect on the President’s approval ratings. If missteps continue, it could make the difference between a bad and awful midterm election for the Democrats.

Trende projects Obama’s approval ratings using a statistical model from a 2002 article (gated) by Brian Newman that I sent him and compares what they would be under various scenarios he constructs — in particular, a no-events scenario, a negative events scenario, and a positive events scenario (see his post for details), which result in the following projections:

Trende notes that the second graph seems to match observed approval ratings better than the first, and claims that it suggests the negative public reaction to Obama’s agenda and oil spill response drove down his approval ratings relative to the state of the economy. That’s certainly possible, though it’s not clear at this point. First, there are many possible explanations for the difference between the economics-only model projection and Obama’s observed approval ratings. Second, it’s not clear for how long the predicted values from the two models are statistically distinct — Trende’s graphs show that they both converge to Obama’s observed approval ratings in recent months. And finally, Trende’s model may not the correct one. For instance, as he acknowledges, an alternate model matches Obama’s approval ratings quite well using only economic factors.*

More generally, Trende’s target is unclear. Both Chait and I have mocked Obama critics who fail to acknowledge the dominant role of the economy in presidential approval, but we have each made clear that we believe events influence presidential approval. The fact that Obama’s approval apparently deviated from its projected economics-only trajectory for some length of time does not disprove those claims. At best, it comes down to a subjective judgment about what being “principally responsible for driving down President Obama’s approval ratings” means.

Trende specifically criticizes Chait for this passage, which was written on July 1:

Right now, President Obama’s approval rating is hovering just below 50%, about even with his disapproval rating. Given the state of the economy, that’s not low. (I don’t have any models handy.

However, Trende’s economics-only and negative events models (the first and second graphs) show very similar values in the most recent period — the difference may not even be statistically significant. As such, Chait’s statement is likely to be an accurate one by the standard of Trende’s post. Though Obama’s approval may have declined faster than we would have otherwise expected, it’s not currently especially low given the state of the economy.

* I’m not sure how relevant Trende’s third graph is — very few modern presidents have had such a positive experience during their first two years in office. As I noted a month ago, only two presidents of the last seven have had approval trajectories substantially more positive from Obama’s thus far (Bush 41 and 43), and one of those was the result of an unprecedented terrorist attack on America. In any case, the fact that Obama’s approval could have been higher in a counterfactual scenario doesn’t prove that events are depressing his observed approval ratings.

[Cross-posted at Pollster.com]

I’m currently scheduled to appear on NPR’s Talk of the Nation with Neal Conan from 2-2:40 PM EST to discuss the difficulty of correcting misperceptions — FYI for those who are interested. You can look up when the show airs in your area here.

Update 7/13 9:45 PM: Audio from the segment is now available as an embedded clip or MP3 download. If you are looking for the paper discussed during the segment (co-authored with Jason Reifler), it can be downloaded here (PDF) from my academic website.

Update 7/14 12:59 PM: NPR has posted a transcript of the show.

Writing in Newsweek, Slate Group chairman Jacob Weisberg demonstrates the ability to peer in John McCain’s mind and discern the reason for his transformation into a “grumpy old man” (emphasis added):

McCain’s personality seems to have changed in a more fundamental way. Running for president in 2008 was as bad for McCain as running in 2000 was good for him. Playing the rebel against the Republican establishment made him young again. Running as his party’s standard-bearer turned him into a grumpy old man.

To some extent, this is a matter of physical decline… The larger factor may be the reactivation of McCain’s powerful sense of dishonor. Bear with me, because what follows is surmise based on long observation rather than hard evidence. But McCain looks to me like someone who bears an unacknowledged weight. If I had to guess, I’d say the weight was his shame over his poorly executed presidential campaign and his awful choice of Sarah Palin as his running mate.

In the past, McCain has dealt with fractures to his sense of honor in extraordinary ways. When he succumbed to Vietnamese torture and signed a “confession,” as a POW, he attempted suicide… Years after the Keating Five scandal, McCain wrote that the episode “still provokes a vague but real feeling that I had lost something very important, something that was sacrificed in the pursuit of gratifying ambitions.” If, as I suspect, McCain relives his 2008 experience as a shame on the scale of these events, he can’t simply apologize again. Acknowledging his mistake in picking Palin—someone he knows to have been utterly unready to become the leader of the free world—would be politically suicidal.

So instead of grappling with his damaged honor the way he has in the past—by examining his soul and apologizing—McCain has retreated into a kind of political second childhood…

Toadying to the right wing of his party has left McCain angry and frustrated, and is—to his old admirers—deeply disappointing. But as disappointed as some of us may be with the new John McCain, I expect he is even more disappointed with himself.

Note to analysts: When you have to qualify your article with disclaimers like “Bear with me,” “what follows is surmise… [not based on] hard evidence,” “If I had to guess,” “I’d say,” and “I expect,” you’re just making things up.

For everyone else, if you want to actually learn something about McCain, Joe Hagan has just published a long profile of McCain’s primary campaign struggles in New York Magazine* that relies on reporting rather than armchair psychoanalysis. I recommend that you read it instead.

*Incidentally, Hagan’s article includes no evidence for Weisberg’s speculation that McCain’s anger is the result of shame over picking Palin.

As a result of today’s Boston Globe article, I’ll be on Michael Smerconish’s morning radio show tomorrow at 7:06 AM EST discussing my research with Jason Reifler on the difficulty of correcting misperceptions — FYI for those who are interested.

Joe Keohane has published an essay in the Boston Globe ideas section on the difficulty of correcting misperceptions that discusses my research with Jason Reifler (PDF). Here’s how it begins:

How facts backfire
Researchers discover a surprising threat to democracy: our brains

By Joe Keohane | July 11, 2010

It’s one of the great assumptions underlying modern democracy that an informed citizenry is preferable to an uninformed one. “Whenever the people are well-informed, they can be trusted with their own government,” Thomas Jefferson wrote in 1789. This notion, carried down through the years, underlies everything from humble political pamphlets to presidential debates to the very notion of a free press. Mankind may be crooked timber, as Kant put it, uniquely susceptible to ignorance and misinformation, but it’s an article of faith that knowledge is the best remedy. If people are furnished with the facts, they will be clearer thinkers and better citizens. If they are ignorant, facts will enlighten them. If they are mistaken, facts will set them straight.

In the end, truth will out. Won’t it?

Maybe not. Recently, a few political scientists have begun to discover a human tendency deeply discouraging to anyone with faith in the power of information. It’s this: Facts don’t necessarily have the power to change our minds. In fact, quite the opposite. In a series of studies in 2005 and 2006, researchers at the University of Michigan found that when misinformed people, particularly political partisans, were exposed to corrected facts in news stories, they rarely changed their minds. In fact, they often became even more strongly set in their beliefs. Facts, they found, were not curing misinformation. Like an underpowered antibiotic, facts could actually make misinformation even stronger.

This bodes ill for a democracy, because most voters — the people making decisions about how the country runs — aren’t blank slates. They already have beliefs, and a set of facts lodged in their minds. The problem is that sometimes the things they think they know are objectively, provably false. And in the presence of the correct information, such people react very, very differently than the merely uninformed. Instead of changing their minds to reflect the correct information, they can entrench themselves even deeper.

Make sure to read the rest. Along with Shankar Vedantam’s 2007 and 2008 articles in the Washington Post, Keohane’s article is the best summary to date of what we know about political misperceptions and the difficulty of correcting them.

Since last year, I’ve been cataloguing the increasing number of Democrats and liberals who have attacked dissent against President Obama as seditious or aiding Al Qaeda. From Time columnist Joe Klein to Salon editor Joan Walsh, Obama supporters have embraced the tactic that Republicans used against them so successfully in the years after 9/11.

Still, the attacks on dissent that we’ve seen had been relatively low profile. Last week, however, a gaffe by RNC chair Michael Steele brought the ugly rhetoric to a new level of prominence. After Steele criticized the war in Afghanistan, falsely calling it a war of “Obama’s choosing,” DNC spokesperson Brad Woodhouse issued a statement suggesting Steele is “rooting for failure” and “undermin[ing] the morale of our troops”:

RNC CHAIRMAN MICHAEL STEELE BETS AGAINST OUR TROOPS, ROOTS FOR FAILURE

“Here goes Michael Steele setting policy for the GOP again. The likes of John McCain and Lindsey Graham will be interested to hear that the Republican Party position is that we should walk away from the fight against Al Qaeda and the Taliban without finishing the job. They’d also be interested to hear that the Chairman of the Republican Party thinks we have no business in Afghanistan notwithstanding the fact that we are there because we were attacked by terrorists on 9-11.

“And, the American people will be interested to hear that the leader of the Republican Party thinks recent events related to the war are ‘comical’ and that he is betting against our troops and rooting for failure in Afghanistan. It’s simply unconscionable that Michael Steele would undermine the morale of our troops when what they need is our support and encouragement. Michael Steele would do well to remember that we are not in Afghanistan by our own choosing, that we were attacked and that his words have consequences.”

These are the precise claims that were made about Democrats after 9/11. By issuing this statement, the DNC is embracing a very ugly style of politics. To their credit, Greg Sargent, Glenn Greenwald, E.J. Dionne, and Adam Serwer have all repudiated the DNC rhetoric, but it deserves far wider condemnation.

[I’ve added Woodhouse’s statement, along with others flagged by Greenwald in his post, to my timeline of attacks on dissent under President Obama.]