Last spring, I tried an idea for a question for my final exam in Energy Economics. Here it is:
Write an essay of 300 to 600 words in which you do one or both of the following:
(i) Pull together various themes from the content of this class (for example, one or more pillars of economic wisdom) to show what you’ve learned; or
(ii) Apply some of the content of this class to give insight on an energy policy issue.
You will be judged based on the knowledge you show and the quality and clarity of your reasoning. [I won’t hold bad grammar and spelling against you unless it’s really bad.]
I’ve seen other colleagues do this over the years and the reason I’m so late to the game is that I always worried that some students would see the question as an opening to tell me how great I am. I know that’s true, but how would I objectively grade such an encomium? I’ve done it a few years now and have learned that fear was unjustified.
The one wrinkle that, possibly, some other colleagues don’t try, is that I gave them a few days notice and allowed them to (1) write it during the exam, (2) bring it to the exam, or (3) email it to me. My idea was that they could use that extra time to do a better job than otherwise. Not surprisingly, every student chose (2) or (3).
One student submitted the following and I ran into him the other day and asked, and received, permission to use it and to attribute it to him. His name is Tim Adduce.
Question 11: How Bernie Sanders helped Me pass GB4070
So there I was, sitting on my couch with my bacon, eggs and PBR ready to see what had been uploaded to YOUTUBE from the various Sunday morning news shows. I made my usual rounds to the Meet the Press, ReasonTV and several other niche channels. Of particular note was a recent Meet the Press interview with presidential hopeful, Rand Paul. As the interview ended I realized my PBR was empty and I got up to grab another. I failed to notice that the next video in the queue was a speech at a Vermont community center given by Bernie Sanders. Upon realizing my oversite, my first reaction was to skip it and move on to something else but I thankfully decided to watch.
Senator Sanders opened his speech by criticizing President Obama and the proposal for giving him “fast track” authority to negotiate free trade agreements and the like. While I too have my suspicions about the Congress’s ceding even more authority to the executive, his criticism instead focused on the “loss of jobs” and “transfer of wealth” from the United States to our trade partners. All I could think about at the time was Fredric Bastiat’s “What is Seen and What is Not Seen.” Clearly Senator Sanders “sees” the loss of jobs. He “sees” the concentrated interests of unionized workers fearing the loss of their jobs as tariffs and quotas are eliminated. What he does not see, or at least doesn’t bother to mention, is the dispersed interests of the American consumer who benefits from cheaper products. I then thought to myself, when was the last time that I, an American consumer, benefitted from a cheaper overseas product?
I was instantly reminded of a dispute with my wife. One morning, I noticed that she had left a large amount of carrot and parsley refuse in the sink. I did my best to remind her in as gently and lovingly a way as possible to not do that as our drain pipes will undoubtedly clog with food refuse. Sure enough, a couple days later, I got the phone call that the sink was not draining. As several treatments of DRAINO had already failed to remove the clog and calling a plumber would be an affront to my penny-pinching miser sensibilities, I decided to take a trip to the hardware store. I needed a pipe wrench to access the exterior service line in my main drainage system and an auger to clear the block. The pipe wrenches and augers generally fell into two categories, U.S. and foreign made. Looking at the U.S. made wrenches I could tell by their fit and finish that they were indeed handsome, well made tools. Then I looked at the price tag. A wrench of the appropriate size was approximately $40. The less well made, Chinese wrench was only $17.95. A similar price disparity existed between U.S. and foreign made augers. While thinking on the margin I realized I have no interest in chasing waste globs professionally and therefore opted for the cheaper foreign made wrench and auger. Had Bernie Sanders’ proposed trade policies impacted wrench and auger imports, I would have had to pay a lot more to accomplish the same job with the “unseen” consequences of fewer funds available for such noble purposes as my son’s 529(C) or the revenue stream of the Pabst Brewing Company. Coincidentally, Pabst Brewing is one of the only remaining large U.S. owned brewing companies.
Senator Sanders’ second point built on his first as he derided recent jobs growth since the Great Recession. He noted that if you include persons both unemployed and “underemployed” in low paying service sector jobs who had previously been employed in much more lucrative enterprises, the “real unemployment rate” (his term) was above 11 percent. In noting these seemingly disturbing trends he found several opportunities to take jabs at the energy sector, in particularly those energy companies engaged in fracking. In watching this, it was impressed upon me that Senator Sanders believes that you can in fact do only one thing at a time, even in systems as complex as the world oil and U.S. jobs markets. He seems to think that you can shut down an industry that singularly accounts for approximately 12% of all jobs created since the onset of the recession. When applying criteria such as “well paying” and “with benefits”, criteria men of Sanders political persuasion ostensibly care about, some analysts say fracking has accounted for 3 times that percentage of all jobs created since the recession. Crushing fracking would almost undoubtedly crush a significant percentage of what jobs growth has occurred in the U.S. in the last seven years, particularly those jobs with high wages and benefits. This says nothing of the loss to consumer surplus that would result if fracking was killed off due to the certain rise in oil prices from a large supply shifter. In a manner of speaking, Senator Sanders seems to think he can have his cake and eat it too, meaning he can kill fracking while not cutting an economic hand up to the working class he claims to care so much about.
Bernie Sanders’ solution could be summed up as a renewed call to faith in the collectivist “holy trinity” of Central Planner, Technocrat and Government Jobs Program. At this point I got really excited because I thought I had been transported back in time to January 1964 where I would be able to manipulate the stock market for great personal gain. Unfortunately I was wrong. I was just listening to one more old guy rehash Lyndon Johnson’s plan for a “War on Poverty.” To say nothing of the character of man in general, a war which was doomed to fail by the “presumption of knowledge” on the part of the central planners governing its conduct. Thankfully for Bernie Sanders, most of the “useful idiots” (Marx’s term) in the crowd weren’t around back in 1964 when this war was last fought and resoundingly lost. Despite this and all his other recycled arguments against the pillars of economic wisdom, I am forced to concede that he does have one redeeming quality, for me at least: inspirational ignorance.
READER COMMENTS
Tom Nagle
Apr 19 2016 at 1:52pm
Wow! Have you considered the possibility that, having rejecting plumbing as a post-military career option, this guy might consider becoming a blogger on economics? You may have just promoted the career of a serious competitor. Your only hope may be licensing that protects blogger’s jobs from competitors who lack PhDs.
Jon Murphy
Apr 19 2016 at 2:34pm
Tell that student to start a blog. That was a very entertaining read!
Thomas B
Apr 19 2016 at 2:50pm
Your student has you pegged.
David R. Henderson
Apr 19 2016 at 3:21pm
@Jon Murphy,
Thanks.
@Thomas B,
True. But he came in with a lot of these views. He had read The Road to Serfdom in high school. I think I helped him mainly sort through his own thinking and also see that were some strong economics arguments for views he already held to some degree.
Philo
Apr 19 2016 at 4:48pm
Entertaining, though not especially analytical. The phrase “useful idiots” is commonly attributed to Lenin–probably wrongly, according to Wikipedia.
David R. Henderson
Apr 19 2016 at 5:22pm
@Philo,
What is your concept of “especially analytical?” What would that look like? Please be specific.
BC
Apr 19 2016 at 6:23pm
Regarding (9) on the referenced pillars of economic wisdom, “The only way to increase a nation’s real income is to increase its real output,” is this a tautology? What is the difference between a nation’s total income and total output?
David R. Henderson
Apr 20 2016 at 10:12am
BC,
Yes. And if Herbert Hoover and FDR had understood it, the Great Depression would have been much shorter.
Jesse C
Apr 20 2016 at 11:24am
I would think it’s harder to give an honest grade when the wiring is just plain entertaining than when it’s flattering. Is it? (Not saying his paper wasn’t good, of course)
David R. Henderson
Apr 20 2016 at 12:39pm
@Tom Nagle,
Wow! Have you considered the possibility that, having rejecting plumbing as a post-military career option, this guy might consider becoming a blogger on economics? You may have just promoted the career of a serious competitor. Your only hope may be licensing that protects blogger’s jobs from competitors who lack PhDs.
I’m certainly encouraging him to keep writing in various venues. Fortunately, I don’t think there will ever be licensing of bloggers, much as some life arrangers might want it. Thanks, by the way, for your compliment.
I would think it’s harder to give an honest grade when the wiring is just plain entertaining than when it’s flattering. Is it? (Not saying his paper wasn’t good, of course).
It wasn’t that hard. The answer got a 4 out of 4. But almost everyone, and no one was nearly as entertaining, got a 4 out of 4. The way I guard against self-corruption is by not giving bonus points. My heart wanted to give a 5 out of 4. My conscience said no. Oh, and by the way, in case you think I’m a grade inflator with 4 out of 4 for almost everyone, I’m not. In a study that two colleagues ran, they found that I consistently give the lowest to third-lowest grades in a faculty of over 60. Those 4’s were earned.
Bob Murphy
Apr 20 2016 at 2:43pm
David,
Did you hold “oversite” against him?
Mark
May 1 2016 at 5:54pm
Skilled plumbers earn a good living, union or non-union. Their jobs can’t be exported, the service they provide is needed in both good and bad economic times and I do not believe it will be threatened by any of the Sirian refuges liberals are welcoming to America. Hopeful he will continue his career in the USN and when he retires from it run for president. America, more now than ever needs more true constitutional conservatives. If not, pursuing a skilled trade like his dad, a heavy equipment technician or his grandfather, a carpenter will serve America well. Yes, dad is biased. Nice job Tim.
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