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Sunday, July 30, 2017

Conversations- open to being completely "wrong": an economist view

I'm a nurse, not an economist. Therefore, my opinion about Bill Kristol's video discussion about economics was written from my consumer's point of view. Indeed, I learned something.
Okay, I took the advice of respected conservative pundit Bill Kristol. In fact, I listened to the 90 minute video conversation with his expert economics friend Irwin Stelzer, who spoke eloquently about how economic theories impact on modern issues of the day. As a registered nurse, I appreciated their discussion about health care, although it was only a small segment of the conversation. Moreover, I learned about how one academic economist processes information. Here are my take aways from this interesting conversation:

Dr. Irwin Stelzer, an economist, in conversation with conservative pundit Bill Kristol

I was impressed by the concept of "being wrong".  Dr. Stelzer spoke about how the polarizing political arguments - particularly those embroiled with climate change - have the philosophical potential of being completely wrong.  He was not advocating in support of climate change theories or against those who deny the concepts.  In fact, he abhors the use of the word "climate change denial" because it conjures up the horrible images of Holocaust denial, a disgusting relationship albeit unintentional. 

Nevertheless, the presentation about the possibility that climate change denial might be "totally wrong", was an interesting discussion. In his economics argument, he said it's possible that those who fervently believe in climate change as absolutely true, could also be wrong.  In other words, if one side or the other are totally wrong, and in the philosophy of "all things are possible", this is highly probable, then how do these opposing factions reconcile their errors?  If I understood Stelzer, his concept about being totally wrong regarding climate change means that those who deny the theory must accept the fact that they might be wrong. In so doing, they must evaluate to what degree they are willing to accept any possibility that climate change is real? As I understand this argument, Stelzer might advocate for the denial group to at least acknowledge that ice caps are melting at an accelerated rate and this could be the result of human interference in the environment.  This doesn't mean they accept the advocates for climate change theories because, frankly the proponents of climate change don't have very much data to demonstrate their position is totally right, either. What is most probable in this economic conundrum (my word, not his) is that there are risks and opportunities in the acceptance of "climate change theory". For example, people in Canada might embrace the possibility of warmer temperatures while coastal communities must accept the risk of losing their generational ways of living, as sea levels rise.  (Although this seems too simplistic, especially coming from a learned economist, the acceptance of inevitable change and human capacity to adapt  are "evidenced based outcomes", a health care concept.) Stelzer recommended a carbon tax to accommodate the proponents of climate change and thereby relieve the responsibility for deniers about their opposition, in the event the advocates are totally right. (Hmmmm....An interesting theory....) In effect, the carbon tax would be a way to build an economic incentive to buffer the potentiality of climate change being real.

Dr. Stelzer spoke eloquently when he discussed economic inequality. He is worried about how compensation for working is losing it's correlation to the quality or integrity of the job.  He used the example of a T-shirt salesman who works hard, does all the right things, sells T shirts at a competitive price but then his competitor goes to China to buy the same design much cheaper and, thereby, takes all the business. Sadly, the hard working T-shirt salesman is not compensated for doing what was right and fairly competitive, while the person who undersold the costs used unfair trade policies to take his T-shirt rivals livelihood.

Yes, the conversation between Kristol and Stelzer was laced with not too subtle references about their mutual opinion regarding Donald Trump's leadership.

Although this conversation with Bill Kristol and Dr. Stelzer was educational, my summary of the discussion was this:  America will survive climate change theory and, by extension, endure the leadership of Donald Trump.  It's just a shame we must all suffer the philosophical agony of this era, before reaching this conclusion.

Some quotes from this discussion:

Stelzer: "...think are going to get it wrong. When you are trying to guess how many millions of people are going to respond to what kind of policy, we’re going to get it wrong. So the question is, which is the least costly error we can make?"

Kristol asks:  "you are a very strong advocate for a carbon tax, which is a favorite of a lot of the environmentalists. People sort of say, 'Well how could he be both? I thought he – he seems like a climate skeptic and then he is for this carbon tax'."

Stelzer responds:  "(If we)..don’t agree with them 100 percent, you are a 'denier'. And I hate that term, because it comes out of the Holocaust. It’s a terrible term. And I have told them that and they keep using it. So, you say, okay, I don’t like these people. But nevertheless, I've got to look at what they say."

"And it doesn’t look to me like what they are saying is plausible – that the world is going to come to an end – especially since that’s an invitation for more government. So the people who are doing it have an incentive. You have always got to look at what the incentive is of the person who is making the position. And so his incentive is to expand government, and naturally...regulation."

"So then you say to yourself, well, but I could be wrong. Now let me see, if I’m wrong and the globe heats up, that’s not a reversible error. That is an error. You can’t buy a fan and cool the globe down – you’re done. So, maybe I am wrong. They think they’re right, they know they’re right. I think I am right, but I am not sure I am right."

So then the question is, what policy is appropriate that will do the least damage if I am wrong? Well, we should do something as costless as we can to reduce emissions, in case they are being generated by human behavior. Well, what is the most efficient way to do that? Now, there, an economist can be helpful..."  

Check out this entire transcript at the link here.

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