Introduction

Why?

Friends and relatives, enemies and losers, I have decided that enough is enough. I can’t handle the bad economics anymore. Instead of debunking things over and over again, I will be sharing this Handbook and leaving this earth forever. I plan to lock myself in a portable toilet, smoke Huel from a crackpipe until I overdose, and send my collapsed toilet body careening over a cliff until it smashes into the bottom of the Grand Canyon.

The bad economics posters won. It’s over. But if anyone is tired of getting the Truth from random internet users, you can now get Truth Premium from me, via this book. Congratulations.

Really, what’s the point of this book? Surprising nobody, many ideas in this book have made appearances in major publications like The Wall Street Journal¹ and The Washington Post.² For all I know, the president is going to wake up one of these days and decide to launch a nuclear missile at BlackRock to try to bring the rent down. I’m just so tired of it. If you really need evidence that bad economics is out there, you probably just don’t know enough to spot it.

There are three big ideas which I think explain much of the public disagreement over economics, and they should be used as a lens through which to view many of the claims discussed in this book. First, many arguments form a “motte and bailey,” where the initial claim carries a much stronger meaning than what the speaker is capable of defending. When challenged, they’ll tend to pivot to an easier point to avoid admitting they had misled anyone. You’ll see this pattern emerge frequently in this book.

To some degree, this kind of issue is inevitable. I often prefer to simplify my own views when discussing them, and the lost details can sometimes lead to problems. If I say “rent control is bad,” that could be challenged by arguing “but aren’t there versions of the policy that haven’t caused the harms suggested by textbooks?”, and I would be forced to agree. “Aha! Misleading much?”

But if, instead of that, I said “Forcing landlords to charge a price that is below the equilibrium price can cause shortages if the policy is not narrowly tailored, and the less-harmful versions of the policy only ignore the supply constraints that lie at the heart of the problem of scarce housing...” my public life would be slow and painful. Most people wouldn’t bother waiting for me to finish my long and winding sentences. To some degree, removing details is necessary for communication.

But sometimes it’s clear that someone is just being misleading. For example, this article³ claims that “One study⁴ of rent control in New Jersey—a state with a rich history of embracing rent control—found that, over three decades, rent control increased housing supply (though this was largely attributed to landlords slicing up larger units into smaller ones).” But in the full text of that study, the author states the following:

“Moderate rent control in New Jersey stands as symbolic rather than distributional reform. Our research suggests that the pressure of real estate groups, government, and the courts has made modern-day rent control laws toothless in terms of their impact on rents. A similar finding has been found in southern California (Heskin et al., 2000). About the only measurable impact is that landlords may have cleverly reduced the size of rental units to create more units and profit in rent control cities. At best, it appears that most rent control ordinances have only succeeded in preventing rent increases that are excessive.”

Thus, a study that doesn’t disprove the textbook model was twisted to make a point about the textbook model being wrong. They even cite another study⁵ that they claim shows rent controls don’t affect housing supply, and in the full text, the authors state “it is important when analyzing the success of rent control ordinances to keep in mind that rent controls implemented in places like New Jersey are relatively mild in nature—sometimes even symbolic.” For fuck’s sake.

Another source of disagreement, and a problem you’ll quickly run into if you try to show people something is true by making a data-based argument, is that people can make up conspiracies about just about anything. There have been two occasions where I’ve encountered people who disagree with a claim I’m making because the government data I’m citing obviously would never make the US look bad (even though it often does) since it’s produced by the government, which, as we all know, is a monolithic entity that never works against itself. But there’s a more general problem of distrust between groups of people. If the source you’re citing happens to be Brookings, people can just call it left-wing slop, and if it’s Cato, they’ll just say it’s a libertarian think tank—poof! Just making that remark is enough to be able to ignore any underlying methodology.

Pretty much any organization well-funded enough to gather data on a large scale can be painted as conspiratorial and suspect. If you don’t like the data on Our World in Data, you can just say it gets funding from billionaires and be done with it. Another fun one I heard recently is that we don’t need evidence of a conspiracy from inside statistical agencies because the real problem is that they’re all left-wing goons who individually make choices that skew the results in favor of Democrats. You probably shouldn’t bother trying to defuse someone who believes that.

This just isn’t a kind of disagreement I’ve found that there’s any healthy way to make progress on. A lot of the people who say “economics is fundamentally political and shaped by human values and interests” will happily use that idea as an excuse for never listening to any empirical claim about economics at all, regardless of the nature of the particular question or what the evidence says. After all, the evidence was gathered by humans, and humans are flawed or something. I dunno. I just don’t want to read, honestly.

And that’s the third problem: most people just don’t have the time to think hard about economics, and aren’t particularly interested in the truth. That’s fine. Economists and others with an interest in the field shouldn’t expect economics to receive special treatment. But public-facing officials and intellectuals do have a responsibility to not engage in this kind of laziness, and I have a responsibility to write posts about them on the interwebz.

The concept of a lie is worth generalizing. Lies of varying degrees, including slightly misleading statements and genuine falsehoods, create expectations about the world that don’t match the expectations one would have in view of the evidence. This is the essence of the motte-and-bailey argument. A speaker who claims that immigrants are a drain on the budget might be shown evidence that they are not, only to argue back by sharing a source finding that if you include the benefits received by the children of undocumented immigrants, those immigrants are a drain—perhaps not noticing that they have pivoted from individual immigrants in general to the households of undocumented immigrants. This is the nature of the modern political almost-lie, and it’s why scientists value specificity so much. (Ask an economist why they use so much math.⁶)

A fun gotcha people sometimes use, and one that has unfortunately received full endorsement by many economists, is that economics doesn’t tell us what we should do. It just gives us insight into the consequences of things we can do.

Look, I get what you mean, but at some point you have to ask if the policy under consideration would ever be considered reasonable under any plausible moral theory. If economics tells you Policy A will make 1 guy really mad and allow ten million people to save $100, obviously you should do it. Similarly, if it tells you that Policy B will kill 1,000 people and save $3.50 in federal expenses, you shouldn’t do it.

Each take in this book is assigned a “tier” to provide a quick summary of its accuracy. These are fairly loosely assigned, but are useful to have:

A-tier: Correct.

B-tier: You can find economists with these views, and if you can’t, they’re at least loosely accurate or sensible. Included for the sake of discussing more extreme versions or for general interest.
Example: Raise the minimum wage.
C-tier: Applied to misleading ideas that have a conceivable interpretation that isn’t factually wrong or obviously a bad idea.
Example: Climate change is the fault of major corporations.
D-tier: The most common tier. There may be an interpretation of this type of idea that isn't “wrong,” but the typical person will be led to believe something likely false in view of available evidence on the matter. Many of these ideas can easily be converted to B-tier ideas with more precise language.
F-tier: Very wrong ideas. Mental gymnastics is required to defend them, and practically nobody with familiarity with the subject believes these things.
Example: It was easier to get by in the past.
Super F: Applied to ideas that are false in such a way that one would need to be immune to new evidence to keep believing them.
Example: Economists invented inflation. We could print as much money as we’d like.