This is What Comes of Behaviorists Behaving Badly


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by Jack Cashill
Published in ingramsonline.com - June 2010

There are people in this world who think they have a better idea about how each of us should live than we do. One influential subspecies of this type goes by the name "behavioral economists," and you don't have to look too far to find them.

I recently stumbled across an explanation of behavioral economics reading Jonathan Alter’s book on Barack Obama’s first year in office called The Promise. The chief proponent of the phenomenon within the Obama administration is one Peter Orszag—“Princeton summa, Marshall Scholar, Ph.D. from the London School of Economics.” Alter describes him as one of the “many extraordinarily smart men and women” in the administration, none of whom, however, are apparently extraordinary enough to plug an oil leak.

As Alter explains, behavioral economists like Orszag believe that “contrary to conventional economic models, human beings don’t always do what’s in their rational best interest.” Worse, they believe that “with the proper government rules and incentives, society could be dramatically improved.” Alter, I should add, writes about all this improving approvingly.

Before explaining how the phenomenon affects our lives here on the ground in Kansas City, I thought I would share some tidbits about Orszag’s own not so well-planned life, at least not when it comes to family planning.

You may remember that this 40-year-old wunderkind made the news in January when a recently dumped girlfriend gave birth to a surprise love child weeks before Orszag became engaged to another woman, an ABC correspondent. How Orszag’s two older children, by still another Orszag ex, feel about their new sister, no one seems to have asked.

Orszag’s track record on the economics front is not a whole lot more encouraging. In 2002, he co-authored a paper with Nobel Prize-winning economist Joseph Stiglitz in which they claimed that “on the basis of historical experience, the risk to the government from a potential default on GSE debt is effectively zero.”

GSE means “government-sponsored enterprise.” The two most notorious GSEs are the two Orszag was referring to in the title of the essay, “Implications of the New Fannie Mae and Freddie Mac Risk-Based Capital Standard.” Given the gazillions of dollars we have spent rescuing Fannie and Freddie, the risk proved to be at least slightly higher than Orszag anticipated.

Locals Behaving Less Badly

In defense of the Mid-America Regional Council, I would bet my Metro Pass (if I had one) that MARC’s chief economist, Frank Lenk, does not have sundry wives and children stashed around the country Orszag-style. The folks at MARC are generally saner and less squirrely than their Washington peers. That much said, like all planners everywhere, they cannot resist the urge to tell the rest of us how we should live.

MARC’s most recent grand plan, the soi-disant “2040 Adaptive Scenario,” seems so positively benign that some healthy portion of this magazine’s readers will think me a Grinch for daring to protest it. Some tiny portion will get downright unpleasant about it. From experience, I can tell you that the meanest e-mails I get inevitably follow a challenge to the downtown-centric local planning orthodoxy.

In brief, MARC would like to see 40 percent of the region’s expected population growth go into existing areas. No problem with that. So would I. To accomplish this, however, MARC has no compunction about restricting growth in currently undeveloped areas where market forces might naturally push it. This, I do have a problem with.

To be fair, MARC is not exactly shoving peasants off their land and herding them into collectives. And yet, the impulse behind all such planning, benign and otherwise, is behaviorist. What sparks the impulse is the sense that planners know better than the market, the citizens that comprise the market, and the local governments that represent the citizens.

One fellow who posted his response to MARC’s Adaptive plan on the MARC site wonderfully captures the way behaviorists think. “Funds spent on automobile-oriented transportation will breed an automobile-dominated society,” he begins. “One choice will seem superior to its alternatives for the very reason that it has been granted that superiority through funding.”

The fellow argues that we Pavlovian puppies prefer to drive only because government subsidies have programmed us to prefer it. In fact, however, automobile mania swept America even before there were paved roads to drive on. That same mania inevitably sweeps prospering European and Asian countries even where there is model public transportation and absurd traffic.

Our behaviorist friend continues, “A heavy change in the balance scales will alter public opinion, for few enjoy high VMT [vehicle miles of travel], road construction, parking lot cities, air pollution, and pedestrian deaths.” I am surprised he left out global warming, the ultimate behaviorist trick to make anyone anywhere feel guilty about any behavior the behaviorists feel compelled to control.

If an “adaptive” transportation model has risks involved—system breakdowns, strikes, catastrophic accidents, muggings, unbending timetables, absurd cost per passenger ratios, cold and/or soggy walks to stations—we almost never hear about them.

Finally, our friend weighs in with his hubristic trump card, “Years of endless highway development, fringe TIF, and separate land uses has forced the inured public to except their scattered destiny.” Yes, “forced.” Why else would we lesser mortals—the “inured public”—live as we do?

Stacking the Planning Deck

I can sympathize with the fellow. I am a recovering planner myself. The first six years of my adult life I spent working for or consulting with housing and redevelopment authorities. I, too, knew how everyone should live. As a resident of midtown Kansas City, I thought of suburbanites the way the KCMO City Council does of Arizonans—misguided souls who did not know what was best for them.

And then I started getting to know suburbanites, exurbanites, small-towners, rural folks and unrepentant hayseeds. They all had specific and sensible reasons for living where they did. Some wanted land for the kids to roam. Others wanted a new home where everything worked. Others wanted a three-car garage. Others still needed a place to keep their horses. Many just hoped their kids could attend schools where students performed—mirabile dictu!—above grade level. None of them felt remotely “forced” to live where they did.

Since then, I have become fully suspicious of planners, especially deranged behaviorists like Peter Orszag, but even nice ones like Frank Lenk. In every case, I have seen, they start with a desired outcome—getting us to live as they do—and skew the cost/benefit analysis to make the outcome make sense. In their defense, I doubt if they even know that they are doing it.

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