Here’s Robin Hanson’s advice at Overcoming Bias (by way of Tyler Cowen:
Best to clear your mind and emotions of group loyalties and resentments and ask, if this belief gave me no pleasure of rebelling against some folks or identifying with others, if it was just me alone choosing, would my best evidence suggest that this belief is true? All else is the road to rationality ruin.
This made me think about a recent political issue — whether the government should somehow bail out the US automakers. On one hand, we have the evidence that these companies are lost causes and principled objection to using taxpayer dollars to bail out certain failing businesses. On the other hand, we have the possibility of massive job loss at car factories, dealerships, parts suppliers, and so on. What’s best for America? What’s best for me? I don’t really have any idea.
To accept that means accepting a certain level of uncertainty that I think most people are uncomfortable with. To be honest, I’m not entirely comfortable with it.
What I do know is that the political party I most closely identify is against letting these companies fail. Many of the bloggers I most often agree with think we should bail them out as well. I think that’s all most people need.
Most big problems are too complex for an individual to fully understand, and rarely can experts agree among themselves on the best solution. So rather than just admitting to themselves that they have no idea what we should do, most people prefer to succumb to their biases and accept the ideas put forward by the group or faction they’re loyal to.
Maybe that’s the ultimate human bias — the bias toward believing that we know what we’re talking about.
November 14, 2008 at 7:46 am
“Most big problems are too complex for an individual to fully understand…”
All the more reason to take our admittedly provincial notions and toss them in front of as many people as possible.
“On one hand, we have the evidence that these companies are lost causes… On the other hand, we have the possibility of massive job loss…”
One can believe in letting the industry adjust, but simultaneously believe in providing significant transition assistance to workers.
Is that dogmatic affiliationism? (Is ‘dogmatic affiliationism’ a real phrase?) I don’t think so. I don’t know that’s the perfect answer, it’s likely not. Maybe we can’t ever get a perfect answer, but I believe we tend to iterate closer to a perfect answer every time we charitably and passionately discuss the alternatives. That might be a bias itself, but if discussion is more harmful than helpful, on balance, then I’m not sure what we’re left with.
Yeah, some folks are probably dogmatists. Here’s to hoping enough of us aren’t at any given time to keep nudging us forward.
November 14, 2008 at 2:11 pm
I am a bit skeptical of the “job retraining” bandage to help out the former employees of the automakers while letting the companies fail. I just don’t know what industries we could plug those people into in the short to medium term. If they eliminated all of the software development jobs in the US, the odds that I could effectively be retrained to do any other job just as well that offers similar pay in a 12 to 24 month timeframe are extremely low, and I consider myself to be a relatively smart person.
November 14, 2008 at 4:08 pm
That’s certainly true, we can’t retrain that much of Flint. But maybe “adjustment assistance” in Flint just means building a really solid safety net, or one specially tailored for areas plagued by chronic unemployment.
If we pursue economically liberal policies chasing some “net gain,” then everyone should be happy funneling 95% of those gains back to those that suffered from the change.
But even if I’m right, there’s still an open question of whether there is any net gain to be realized from letting the auto industry fail right at this moment, rather than waiting until we have our house more in order. That’s probably where most the heavy lifting is in this discussion, and it’s admittedly beyond me.
As a sidenote, you might dig Andy Kessler’s HWGH. It’s a bit of a biography of technology and economics over the last several centuries, it’s a fun read.
November 16, 2008 at 12:09 am
It might actually be cheaper in the long run to prop up the companies for the time being at minimal life-support levels, and give anyone in the region that can display a reasonably sound plan a zero-interest small business loan or even a no-strings grant and allow them to come up with their own businesses, than to set up an elaborate and probably doomed retraining system. With, of course, the tacit knowledge that 90% of the new businesses will fail (but still dump that cash into the local economy, propping up the ones that do not fail). This will allow the region to slowly transform itself rather than a gestalt dumping of a huge number of employees on an already harsh job market.
Simultaneously, dramatically increase funding for higher education in the region. Adults that want to go back to school then do so with (again) interest-free loans and grants in the existing education system.
As time goes on, gradually retract the cash influx to the auto makers, and if they fail then, well, sorry; you had your shot AND assistance, and now the region can support itself in other ways.
This could likely be done for much less money than a simple bailout. A $100k grant to a small business means a heck of a lot more to them than it does to GM; that represents funding maybe one employee at a large company (after overhead and such is factored in) whereas if it helps a small business to start or survive it may enable employing several.
There just aren’t jobs in other industries for the auto workers to fill if the companies are let die immediately.
The worst thing that happens is that it fails, which is also the worst case if a simple bailout fails. The difference is, in this case it is like seeding lots of little chances for success and spreading the health around the region, while giving the auto industry a bit more time, rather than putting all the eggs in one basket.
But I’m not an economist, what do I know.
November 16, 2008 at 4:53 am
(last sentence meant literally, and speaking to the theme of your post; like you, I have no idea what is the right thing to do here, and despite throwing out opinions like I did, it is not a matter I am really qualified to comment on)