Confessions of an Analyst

In academic terms, I’m a disciplinary mongrel, trained in economics, having spent a lifetime in politics, and more and more a historian as I age. I confess, though, that at heart I’m an analyst, both trained and tempted to think of costs and benefits, and too easily prone to think of both in economic terms. So “why is Kentucky or West Virginia Republican?” is a hard question for me to comprehend, let alone answer, not to mention “why would anyone in this era of COVID-19 refuse a shot of perhaps the best vaccines in the history of medicine?”

By Gregory F. Treverton

NOTE: The views expressed here are those of the author and do not necessarily represent or reflect the views of SMA, Inc.

Transfers from the federal government account for more than half the income of residents in 11 counties across the country—ten are in Kentucky and one in West Virginia. They stand to benefit from more government, not less. Yet nine of the Kentucky counties are the fifth congressional district, which reelected its Republican member of Congress in 2018 with 79 percent of the vote. As transfer payments go up, so do Republican leanings. Mitch McConnell, the Senate Majority Leader, is a poster child for that trend.[1] As a county executive in the 1970s, he was a pro-civil rights, union-friendly moderate. He moved sharply to the right, however, as the share of federal transfers in the average Kentuckian’s income grew from 10 percent in 1970 to 24 percent in 2016—seven points higher than the national average.

What has framed my entire professional life is trying to understand, and perhaps bridge, this divide between policy and politics, between my world as an analyst and the world of politics that is driven more by aspirations than analysis, more by images and identities than ideas. At home, healthcare is perhaps the sharpest case in point. Surely the issue is devilishly complicated, as President Trump himself once admitted as though he had only recently discovered the fact, but for economists, for us analysts, the basics are simple: if you want to extend care widely at manageable cost, the pool of those covered has to be as large as possible. That can be done in only two ways—by having the entire system run by government and cover the entire population, as in Britain. Or it can be done by requiring, mandating, citizens to participate by buying insurance. There is no alternative without throwing people out of care or into prohibitively expensive plans. To argue there is an alternative is self-deception or a simple lie.

We know the world is connected but politics still treats it in pieces. Virtually any economist would have thought that cutting taxes in the face of a strengthening economy, as the United States did in 2017, was a bad idea. It was bad at home because it increased inequality, ballooned the budget deficit, and thus risked driving up interest rates up, along with inflation and the dollar—and thus producing just the result Trump said he sought to avoid, an increased trade deficit. Yet it was also bad for the world, especially emerging markets, which would face those rising interest rates on their dollar debt. Political avarice may have driven the American decision, but that is no excuse for not trying to be clear about its consequences.

Glaring analytic fallacies multiply during electoral seasons and extend to foreign policy. We know, for instance, that for better or worse, multilateral trade agreements are mostly political in nature; their actual effect on trade, hence pocketbooks, is relatively slight but mostly positive. Yet those agreements have become a four-letter word in Washington. At least on that issue, there is an analytic basis for understanding the politics. We have known for at least a half century that the benefits of freer trade are dispersed, that inexpensive imported apparel now available to any American, while the costs are concentrated, those American workers whose manufacturing jobs move abroad.[2] The dispersed gainers will stay unorganized, while the concentrated losers will organize, and become a political force opposing freer trade.

So, too, we have known since the beginning of NATO that American allies contribute less than we would like to shared defense. By the analysis, to do so is entirely rational for them.[3] They are what economists call “free riders,” for they know that the big countries, especially the United States, will provide the lion’s share of common defense, and so their own efforts will count for relatively little, so better to spend the money closer to home, on social welfare for instance. The issue has never been the facts; rather it has been what to do about them. President Trump seemed neither to know nor care about either the analysis or the history that virtually every president before him had sought to exhort the allies to spend more in the common defense.

So, too, we have known for a long time that the America’s burden in providing what economists would call the “public good” of international order was becoming relatively larger as America became relatively smaller. At the creation, in Dean Acheson’s words—the Marshall Plan, NATO, the European Communities, and international economic institutions—America counted for almost half the global economy. Now it is half that, a quarter of the global economy.[4] And so cries that America pays too much have been in the air for a least a quarter century. Yet the debate dramatically distorts the analysis. For instance, Americans continue to overestimate by orders of magnitude what the United States spends on foreign aid: in a 2015 poll the median estimate was 20 percent of the federal budget when the actual number was one percent.[5]

The analyst in me can comprehend, barely, when politics simply trumps facts. We do understand, after all, that, happily, people make decisions motivated by other than self-interest: they leave tips at restaurants they’ll never visit again or give anonymously to charities. Belatedly, an entire field of behavioral economics has grown up around the realization that people are not good at exercising their self-interest even when that is the name of the game: they are, for instance, more likely to choose attractive retirement plans offered by employers if those are the default option, rather than ones they have to explicitly select.

So, I understand that those Kentuckians and West Virginians who vote against their economic self-interest are expressing preferences of another sort, which may range from disdain for Washington to hatred of the preaching of the college-educated to who knows what. I understand that when us college-educated folks say to poor whites, “go to college,” that is about as condescending as forced busing was for Black American students, for it implies that the way up for them is to associate with a better class of people.

Where my understanding ends is where the dying begins. Everything I have seen as an analyst highlights that the main difference between America’s rate of killing and those of our fellow rich countries is the omnipresence of guns. When I started my investigation, I imagined other reasons why were such a violent country. But we are not. It is guns. In 2021, the United States had over 12 gun-related deaths per 100,000 people. For Japan, with strict gun control laws, the rate was 0.06, two hundred times less. It may be true that people kill people, but guns surely help.

At least guns often kill someone else, though there are more gun-related suicides than homicides in the United States. Yet why people would ignore the analysis and choose to risk death by spurning COVID-19 vaccine is utterly beyond me. To be sure, ignorance and disinformation play a role. But the analysis is clear: the vaccines are effective and the risks very low. Ignoring that analysis is, for me, simply incomprehensible.

[1] See Suzanne Mettler, The Government-Citizen Disconnect, Russell Sage Foundation, 2018, pp. 135-7.
[2] The classic study is Raymond Bauer and others, American Business and Public Policy, Atherton Press, 1963.
[3] The classic analysis is Mancur Olson, Jr. and Richard Zeckhauser, “An Economic Theory of Alliances,” Review of Economics and Statistics, 48, 3 (August 1966), pp. 266-279, available at www.jstor.org/stable/1927082.
[4] World Bank World Development Indicators database, World Bank, 15 December 2017, available at databank.worldbank.org/data/download/GDP.pdf.
[5] This and the following poll data are reported in Steven Kull, “American Public Support for Foreign Aid in the Age of Trump,” Brookings Institution, July 31, 2017, available at www.brookings.edu/research/american-public-support-for-foreign-aid-in-the-age-of-trump/.

Published on February 3, 2022 by

Dick Eassom, CF APMP Fellow