07/16/10 Paris, France – Loewenstein and Ubel take aim at the jungle. They believe “behavioral economics,” in which you actually watch what people do, is a threat to their trade.
“For all its insights, behavioral economics alone is not a viable alternative to the kinds of far-reaching policies we need to tackle our challenges,” they write.
What sort of ‘far-reaching policies?’
Well, to give you an idea. The feds came to the conclusion that it was not a good idea to let people get so fat. What to do about it?
“The fashionable response,” say the two, “based on the belief that better information can lead to better behavior, is to influence consumers through things like calorie labeling.”
But the latest studies show that “it has little impact.” In other words, people don’t seem to care. But instead of letting fully informed people make their own decisions about how fat they will be, the zookeepers want to decide for them.
The problem is that food is too cheap, they conclude. So “we need to consider taxes on unhealthful foods.”
But “an over-reliance on behavioral economics is not limited to health care,” they point out. Take energy consumption. The two note that merely telling drivers how much gas they’re burning is not enough. The real problem is that “gas is still relatively cheap. An increase in the gas tax that made the price of gas reflect its true cost [what?] would be…far more effective.”
Deconstruction: The two academics are closed-minded, meddling bumblers. Obviously, the fat person chooses to be fat and the gas-guzzler chooses to guzzle gas. Both of them have their eyes wide open. Loewenstein and Ubel merely want to substitute their own tastes and judgments for those of the native fauna. They’re the zookeepers, after all.
Bill Bonner
for The Daily Reckoning
Bill Bonner
Since founding Agora Inc. in 1979, Bill Bonner has found success and garnered camaraderie in numerous communities and industries. A man of many talents, his entrepreneurial savvy, unique writings, philanthropic undertakings, and preservationist activities have all been recognized and awarded by some of America's most respected authorities. Along with Addison Wiggin, his friend and colleague, Bill has written two New York Times best-selling books, Financial Reckoning Day and Empire of Debt. Both works have been critically acclaimed internationally. With political journalist Lila Rajiva, he wrote his third New York Times best-selling book, Mobs, Messiahs and Markets, which offers concrete advice on how to avoid the public spectacle of modern finance. Since 1999, Bill has been a daily contributor and the driving force behind The Daily Reckoning. Dice Have No Memory: Big Bets & Bad Economics from Paris to the Pampas, the newest book from Bill Bonner, is the definitive compendium of Bill’s daily reckonings from more than a decade: 1999-2010.
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Obviously, the fat person chooses to be fat and the gas-guzzler chooses to guzzle gas. Both of them have their eyes wide open.
I can’t agree completely with this statement, I find that a huge number of people are completely mindless and easily influenced by corporate advertising and lowest common denominator cultural signals. As a result they are fat and wasteful. Don’t get me wrong, I am all for individual freedom but there are powerful interests that are pushing cheap obesity inputs like corn syrup. And it is difficult for even clear headed persons to quit self damaging behaviors such as smoking. I know that from personal experience; the only reason I no longer smoke is it became too expensive for me to continue rationalizing the habit as a ‘personal choice’.
Food is too cheap? I wonder if this has been exacerbated by the ridiculous agricultural subsidies that have been in place for generations? What do you want to bet that ending the subsidies would eventually change eating habits and cure obesity…
Although I agree that a person has a right to be obese if they so choose to be, gas guzzlers lead to the US oil import addiction, which is the root cause of most of the worst policy decisions of the last forty years.
I am okay with higher gas taxes if it is used to pay for roads or deal with automobile pollution. That would simply be a form of user pay.
I’d rather a tax on soft drinks than a ban… there may be a user pay argument in there…
Great comment Dave!
The corporatocracies bread and butter is keeping the population of our lowest common denominators propigating and ignorant much like our old nemisis the Monarchs and Aristocrats grew fat and powerful off.
: ).
Wow-
The quality of readers has sure gone down-hill.
Dave has bought into the “evil corn syrup” theory as if calories from corn syrup are different from cane sugar.
D&D- I would love to take the bet on ending agricultural subsidies ending obesity.
IF- If you give them a tax on soft drinks you give them the inch that goes for miles.
BH- What makes you so sure you aren’t the “lowest common denominator?”
I am almost missing having Harry around. At least I could ask him about his iPhone’s antenna.
And where is LAGirl?
Two of BB’s biggest delusions? Efficient markets and the concept of free choice.
You need to do a little reading. Calories form high fructose corn syrup are different from cane sugar. Well, technically the calories aren’t different but they create a vastly different metabolic response in the body leading to belly fat, and a whole host of chronic health conditions. Yeah, there is a difference.
JRod thanks for confirming my feelings that lame grammatical
post deserved an “F” also …couldn’t find the trash button.
My plea “low thyroid fatigue” troll.
Check out YouTube’s collage humour channel for a skit produced titled “Internet troll” ,I think you’ll be happily amused.
Bill is right.
How can Bill believing in free choice be a myth when the alternative is government essentially telling people what they can and can’t eat or drink?
Same with efficient markets – markets – when free – are efficient. Government and corporate coercion is what continues to make them inefficient.
Sugar begins to make a comeback over fructose corn-syrup. Why? Because educated consumers are beginning to prefer it:
http://www.nytimes.com/2009/03/21/dining/21sugar.html
I just got done with my reading on high fructose corn syrup.
Looks like I was wrong. Thanks for the enlightenment everyone. I am strictly on the cane sugar now and looking forward to the weight loss.
Cheers!
Now BB is against fat economists ?Please post your BMI with your comments.
Delusion, folks, d.e.l.u.s.i.o.n. There has never been, isn’t, and will never be such a thing as efficient markets. Ask any baby boy with no hair.
And free choice is a concept most humans do not feel comfortable with. In fact most of them hate to be free and cannot handle too much freedom well. There are exceptions to the rule, of course, as always. But very few. And I mean VERY few.
How is the efficient market theory expected to compete
in a crony corporatist capitalist system with politicians representing the interests of their corporate & union campaign financiers and the common peoples interests second… if at all?
Campaign finance reform is essential before these greedy vested interests who have captured the workings of so many western democracies bring these easily corruptable democratic systems crashing down and leave an ever aging poulation to pick up the pieces and rebuild their democracies on stronger footingings.
Not holding my breath.
IF said: “I’d rather a tax on soft drinks than a ban…”
Are you saying you would happily accept either one? Good Lord.
Lots of talk to justify the tax on soft drinks and other sugary foods, but the real reason is Congress is addicted to spending more money! We need more and more taxes to feed their habit!! The habit drives everything they do!!
There is a difference between prices and costs. Bill wrote that these people write “The real problem is that “gas is still relatively cheap. An increase in the gas tax that made the price of gas reflect its true cost [what?] would be”.
The price of gas is what you pay at the pump. The cost of gas includes what is paid by society, not just the consumer. The so called “hidden costs” include such things as air pollution (asthma and other diseases), acid rain killing forests and crops, military costs to protect our oil sources in the middle east, etc. I’ve seen estimates of these costs at $6 to $12/gallon. So for every gallon of gas you burn in your SUV costs the rest of us many times as much.
In a similar manner, “Free market” people say coal fired electricity is cheap, but they don’t consider that many fish species are so poisoned with mercury that it is dangerous to eat them more than twice a month. Mercury causes numerous problems included lowered IQs and heart disease. So coal is “cheap” but only because the markets show no price for the poisoning of the oceans, retardation of our children, and our own heart disease.
Free markets are very good at determining the most efficient allocation of resources, but only if all the costs are included in the prices. Anything less is inefficient and unfair.
For more information I highly recommend the book “The Ecology of Commerce” by Paul Hawken and “Natural Capitalism” by by Paul Hawken, Amory Lovins, and L. Hunter Lovins.