Bryan Caplan  

Public Opinion and the Bail-Out

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Revolt of the Elites... How Would We Know If a Bail-Ou...

Is the public fur it or agin it? The major surveys conflict:

A poll by Rasmussen Reports early in the week found that 44% of Americans opposed the plan and 25% supported it. However, a USA Today/Gallup poll released Thursday showed more than 75% favored congressional approval of the bailout. A Bloomberg/Los Angeles Times poll conducted Sept. 19 through Monday showed 55% opposed to government bailouts of private companies.
Does this show that polls are useless? Before we go down that nihilistic route, let's take a look at the question wordings:

Rasmussen:

"Do you favor or oppose the proposal for the federal government to purchase up to $700 billion in assets from finance companies?"

USA Today/Gallup:

"As you may know, the Bush administration has proposed a plan that would allow the Treasury Department to buy and re-sell up to $700 billion of distressed assets from financial companies. What would you like to see Congress do -- [ROTATED: pass a plan similar to what the Bush administration has proposed, take action but pass something different from what the Bush administration has proposed, (or) not take any action on this matter]?"
Note well: The 75%+ support figure is misleading because it aggregates the first two options. Only 22% favored the Bush plan; 56% wanted a plan with changes.

Bloomberg/Los Angeles Times: Should...

"the government should use taxpayers' dollars to rescue ailing private financial firms whose collapse could have adverse effects on the economy and market, or is it not the government's responsibility to bail out private companies with taxpayers' dollars?"

The LA Times survey has the best-crafted responses - at least it mentions the main arguments for each side. But the USA Today poll, which gives an intermediate choice, probably tells us more about what the American public is thinking. Namely: They want government to do a lot, just not this.

The bottom line is that if you actually read the questions, instead of just looking at the headline, the major bail-out surveys paint rather similar stories. Journalistic summaries of survey results are about as reliable as journalistic summaries of any scientific results. Blame the summarizers (or perhaps the summarizers' readers), not the sources.

P.S. Since I think the Median Voter Model explains almost everything about democracy, I have to predict that a slightly modified bail-out will go through in the near future. Hopefully I'm wrong.


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COMMENTS (13 to date)
Steve Roth writes:

Mises-Bastiat-Caplan:

"voters' views are irrational but heeded"

Are you suggesting that this was not true in this case?

The voters were obviously heeded. Are you saying they're rational?

If so then your belief, "the Median Voter Model explains almost everything about democracy," is incorrect (unless you use "almost" as your out).

Am I missing something?

Grant writes:

Nothing prevents an conclusion reached via irrational means from being correct. Stopped clocks are right twice a day, and all that. When you're talking about supporting (or not supporting) a bill, thats a 50/50 chance even if you're flipping a coin.

David Friedman writes:

"Since I think the Median Voter Model explains almost everything about democracy, I have to predict that a slightly modified bail-out will go through in the near future."

"Take action but pass something different" could mean a lot of different things. There is no reason to suppose that any one of those alternatives represents a median voter result in any meaningful sense. The alternatives aren't arranged on a line.

Dave writes:

The Rasmussen question isn't quite fair either as it refers to 'finance companies'. Although technically an accurate description, most Americans think of 'finance companies' as entities that charge enormous interest rates to poor people.

Floccina writes:

IMO the irrational thing here is that because of a market problem people automatically think that non-market situation will yield a better result, showing an anti-market bias. So maybe every 10 to 20 years the financial markets blow up, but they still perform better than the alternatives. Further since the great depression occurred after the creation of the federal reserve why did people not say that “did not work” and undo it. Since we have had bank failures after all the bank regulation why do we not say “that did not work” and undo all the regulations that were meant to prevent this sort of thing and start over. If the regulations do not bring about the desired result why put up with the burdened of the regulations, and purpose that we may have to put up with these thing now and then.

Steve Roth writes:

More:

I've been re-reading your book with my high-school-senior daughter (hoping for U Chicago next year, early action) and one of her classmates, for an independent study they're doing.

So, I've been thinking, talking, and commenting on papers on it a lot just lately. We all find ourselves swinging, one paragraph to the next, between astounded admiration and incredulous disbelief. (Mostly the former.)

The fundamental premise (or contention, or logical basis) is that economists' opinions, in aggregate, constitute "rationality"--or the closest possible approximation, at least on economic issues.

In the current situation, the public is nine-to-one agin' the bailout, and economists are for it by about the same margin. Does that give pause? (Yes, I've read your excised section on your own rationality--very nice, should have left it in.)

I really think you need a better benchmark: For each SAEE question, a panel of economists who have actually studied that particular issue. Then give a value for each: public, enlightened public, economists, enlightened economists, and the panel. I know: small N on the panels. But aggregating all of those might give a very interesting picture.

BTW, my daughter was literally screaming and yelling with approval at your proposed education requirements at the end of the book, in particular the Pinker quote. As was I when I first read them. Why? Because it's exactly the independent study we're doing. The Blank Slate's up next, along with Capitalism and Freedom. We've already done Adam Smith and Davis's Game Theory book. Great minds...

OTOH, I'm also going to give them a heady dose of Lane Kenworthy. Now there's a rational economist. [grin]

Oh, don't miss Nate Silver's analysis of the vote: congressmen in tight races batted .210 for the bill. Safe-seaters batted .500.

Giedrius writes:

Of course David Friedman is right. Bryan's prediction is like predictions of the polls that George W. Bush was going to lose an election to "a democrat".

Max writes:

The question remains: What is "doing something different".

For example this could also mean to repeal certain restrictions on the market or to protect consumers rather than banks and enterprises...

I think the intermediate step is almost useless, because it tells us nothing about the notion or the direction of these 50 % =)

Bryan Caplan writes:

Hey Steve, thanks for the comments. A couple quick replies:

The voters were obviously heeded. Are you saying they're rational?
If so then your belief, "the Median Voter Model explains almost everything about democracy," is incorrect (unless you use "almost" as your out).
Am I missing something?

Maybe. My point is that we haven't yet done what the voters want, because the voters definitely want additional intervention. They just don't want the Bush Plan.

In the current situation, the public is nine-to-one agin' the bailout, and economists are for it by about the same margin. Does that give pause?
I disagree with you on the facts. The public certainty isn't 9:1 against the bail-out. Plus, there is a lot of resistance from economists. This letter, for example, was supposed to have come up frequently during the Congressional debates.
adina writes:

I dislike poll questions that embed the reasons for or against each side of the argument into the question. Sometimes, I agree or disagree with a position, but for a different reason that stated. I also find that providing "reasons" can lead people and influence the response. I think the polls should just ask "yes" or "no" without providing reasons.

Jason Malloy writes:

We always get these daily, real-time surveys of the public on current events. But there needs to be more of the same thing, only with experts.

What's the break-down of bail-out opinions among economists?

Erica writes:

I actually have a question for a poll I am conducting for my government class:

Do you believe that the bail out will drive the US economic problems into further disrepair?
Yes No or I Don't Know

We are studying the effects of polls on public opinion and the effects of cleavages on public opinion. The project also requires that I record the gender and age of responders, so if you have a comment, please signify both.

I would really appreciate if anyone responded to my question. Thank you.

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