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One Out of 55 Economists Agree . . .
A new list of tax-cut opponents shouldn't get you down.


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Donald L. Luskin

The Economic Policy Institute, a liberal issue-advocacy group, has collected the signatures of 400 economists — including 10 Nobel prize winners — on a statement opposing President Bush’s tax cuts. It is running this week as a full-page advertisement in the New York Times. Hmmm . . . wonder why they didn’t place it in the Wall Street Journal?

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These stunts are all about grabbing compelling headlines, and not much more. It’s already working. Reuters had two different versions Tuesday, both made to order for the statement’s sponsors: “Economists Blast Bush Tax-Cut Proposal” and “Bush Tax-Cuts Come Under Fire from Economists.” These give the mental impression of “Experts agree!” — and are intended to manipulate you into suspending your own judgment and admitting, “Who am I to disagree?”

But what does it really mean when 400 economists sign such a statement?

For one thing, it means that at least 21,600 economists did not sign the statement. There are 22,000 members in the American Economic Association — that should be a conservative estimate of the number of economists in the United States. Four hundred is only 1.8% of economists.

So how about this for a headline: “98.2% of Economists Don’t Oppose the Bush Tax Cuts!”

Statements like the one put together by the Economic Policy Institute — basically a petition — don’t just organize themselves. They should never be assumed to represent groundswells of public sentiment — “the economist street,” as it were. Instead, they are manufactured documents: Some public relations firm, hired to generate headlines, went around and gathered as many signatures as they could.

Anyone can do that. In fact, for the last week the U.S. Treasury has been circulating a statement for economists to sign supporting the Bush tax cuts. I know because I was asked to sign it — and I gladly did. It’s just a matter of days until that statement grabs its share of the headlines. And once again — “Experts agree!”

Economics isn’t an objective science. The EPI statement — or its opposite, for that matter — shouldn’t carry the weight of claims like “Four out of five dentists recommend Crest.” I know many economists who specialize in lots of different fields within the overall discipline — some I would trust to know what they are talking about, and some I wouldn’t.

For example, 1991 Nobel laureate William F. Sharpe of Stanford University is someone I’ve worked with over the years — he’s one of the 10 Nobelists who signed the statement. His development of the Capital Asset Pricing Model is one of the towering achievements of financial economics. He’s developed real-world investment strategies that have been consistent market-beaters. He’s a crackerjack computer programmer, a successful entrepreneur, one hell of a charming guy, and not a month goes by that I don’t refer to my inscribed copy of his classic textbook Investments. But I haven’t the slightest reason to think that his opinion on the efficacy of Bush’s tax cuts is any better than that of my dentist.

So how about other economists more specialized in policy matters who also signed the statement, like Nobelist Robert M. Solow of MIT? All I can say is that since at least 1975 Solow has been fighting the tax-cutting revolution that flowered into Reaganomics and launched one of the greatest periods of growth and prosperity in American history. That he would sign a statement like this is no news at all, and his view on this subject has no more credibility now than it had a quarter century ago.

So, if you support the Bush tax-cuts, don’t lose heart. There’s nothing here that should make you question what you know is the most powerful pro-growth policy initiative since the presidency of Ronald Reagan. So what if 400 economists oppose it? Soon there’ll be another statement signed by 401 economists who support it. And our economists can beat up their economists. So there!



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