October 2019
John Haveman is the executive director of the National Economic Education Delegation (NEED). NEED is an organization with a mission of spreading economic insights into important policy issues throughout the electorate. He holds a Ph.D. in economics from the University of Michigan and a B.S. in economics from the University of Wisconsin.
Your upcoming OLLI class is called What Economists Know About Important Policy Issues, and you believe that there is a disconnect between established economic principles and the way they are shaped in public discourse. How did we get to this point?
It was a 40-year progression. In the early 1980s, sources were developed with the intent of diminishing the federal government; information was distributed that suggested that government policies just didn’t work, or that suggested that there was no economic problem that needed to be addressed by government intervention. Politicians have bought into some of this narrative, and I have observed how this has shifted political discourse over the past 40 years. Economics has become increasingly weaponized, and politicians have shown an increasing willingness to use alternative facts and to push their own policy agenda rather than advocating for a policy based on its merits.
Could you give us an example of an issue that has been weaponized and tell us how you confront a false narrative?
I think tax policy is a primary example. Under the Reagan Administration, there was a big push for trickle-down economics. Nobody calls it that anymore, but the 2017 tax law was another example of trickle-down economics—a law that will give big tax breaks to the rich based on the idea that they will invest it and create jobs, when the reality is that there has never been an economic study that robustly shows this assertion to be true, or even if that might be remotely true. It is not the best way to spend money to get the economy growing. The way to do this is to spend money on folks who give money to folks who will spend it, because they are really the ones who are going to drive the economy forward. And it is that increased spending that will encourage the wealthy to make more investments, thereby creating more jobs. So, the whole trick of the trickle-down hypothesis takes out that first step, right? It assumes that there isn't enough money to invest in the United States, but it neglects the notion that we need something that is going to drive more investments, and that is consumption.
If you make the point that a theory like trickle-down economics is missing a step, how do you maintain the neutrality of economic fact?
I refer to the literature! It is undoubtedly the case that economic facts when presented are going to be portrayed as political. Inevitably, one side of the other is going to disagree with them. But all I can do is stand by the research that exists and the data that has been generated, produced, and published; present it, and hope that it carries the day.
Can you tell us a little bit about your organization, NEED, the National Economic Education Delegation? Why did you think that creating a non-profit would be the best way to bring this educational platform to the public?
If we were a for-profit organization, the public might be skeptical as to our agenda; and a nonprofit is more in line with the mission of our organization. It also stems from my experience, as I have been doing a lot of public speaking for the last 20 years. In my view, you can put blogs out there, or you can post a job online, and that's great and it's important, but none of that will have the same impact as a PhD economist standing in front of you and talking to you about the issue, sharing with you what the economics profession knows, and answering your questions and treating your skepticism with respect. The thought struck me that actually getting economists—of which there are about 12,000 active academic economists in the United States—out and talking directly to the public would be the best way to inform it. This is driven by my observation that the economics profession knows a ton about economic policy, we just don't tell anybody! We publish it in esoteric journals instead. Demonstrating what we understand, and what both Democratic and Republican, liberal and conservative economists agree on goes a long way toward showing that the economics profession is not shirking its responsibilities. It is my genuine hope that, going forward, economists will seek out speaking engagements and pursue them as a part of their professional obligation. This is what NEED aims to do.
When you are at a speaking engagement, what is a common question that you field?
The questions that pose difficulty are ones with regard to specific policy issues. I try very hard not to advocate for any particular policy. My view is that economics only take you so far. It's your morals, values and ethics that get you by, and that help you to choose between a set of policy instruments that might be available. And so the most common questions pertain to an individual's preferred policy and their assertion that it is the correct policy, and how can I say otherwise? I try to tell them that I am not saying their position is incorrect, it just differs from these other policies in these specific ways.
What do you think the biggest economic question or policy issue is for this current generation? Is there something on the horizon that people haven't yet fully considered?
Healthcare is one of the glaring issues that we badly need to deal with. The state sustaining the social safety net is something that needs to be dealt with. We are wasting billions and billions of dollars every year because healthcare is an inefficient system. I think another issue that people don't pay enough attention to is the federal debt. The federal debt is now approaching 75 percent of GDP at the debt held by the public. In 30 years it will be upwards of 150 percent of GDP. At some point, the amount of debt that the federal government will become a problem. We don't know where that point is. We don't know but we also don't want to find out.
What would that Doomsday scenario look like? And what would it mean for the people of the country?
The problem would be that the federal government would end up defaulting on its debt. Given that the federal government is so dependent on that function, it would mean that a lot of vital services would have to be dramatically reduced. It would also mean that the interest rates that the government would have to pay in order to issue new debt would get very very high, and that would be just that much more strain on the federal budget, further reducing the amount of money that we have for vital programs.
What is one of NEED’s success stories?
We are less than two years old at this point, and NEED’s goals represent a heavy lift and a long play. It is hard to look at a policy conversation that has been definitively influenced by these efforts at this point. What I look at as an indicator of NEED’s future success is that there seems to be a hunger for the material that NEED is producing, for economists to come out and speak to folks. Part of that is based on my experience at OLLI Dominican, where I had a hundred people in my course, and part of that is based on my experience with rotary clubs here in San Rafael where they keep asking me back. Often, I go to speak to one Rotary Club and somebody in the audience is a member of another one, sees the value of our conversation, and in an hour or two, I’ve got an invitation to speak at another club. There seems to be a hunger for knowledge about economic policy issues. And I find that really rewarding, and it hopefully indicates that in time, once NEED makes enough inroads into enough places, we will have success stories to talk about.