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Opinions Change When Money is Involved

Here’s a new twist to an age old problem. The problem is that when you ask people how the economy is doing, their answer has more to do with whether the president is currently from the same political party they are, than it does with objective reality. When the president is a Republican, then Republicans think the economy is doing well, and likewise for Democrats.

It is as if you are asking them to name the best football team. Of course it is going to be their team, reality be damned.

So is there no objective reality we can agree on? If not, this is bad news for democracy.

But two studies show that there is an objective reality. In the first study, they asked the same question about the economy, but told the respondents that they would get two dollars if they got the right answer. There was still some political bias, but it was mainly from people who didn’t know enough to be sure of an answer.

So in the second study, they gave people a dollar if they got the right answer, but gave them 33 cents if they said “I don’t know”. And just like that, all political bias vanished.

When people have some skin in the game (even a small amount), they actually think about their answer and give a good answer.

However, if you mentioned a politician by name in the question, then partisan bias crept back in. For example, these are factually the same question:

  • Is the unemployment rate lower or higher than it was seven years ago?
  • Is the unemployment rate lower or higher than it was when Barack Obama became president?

But if you ask the latter question, partisan bias reappears.

There are other examples of how when money is at stake, people do understand (and act according to) actual reality. For example, the recent news that oil companies, even while they were completely claiming that climate change was not a problem and even strongly donating to politicians who also denied that it existed, nonetheless were internally making plans to deal with the reality of climate change. Another example is Obamacare, where many Republicans will say that it is terrible, but will still take advantage of it to get health insurance. Or Republican politicians who expanded Medicaid in their states, even though they voted against the ACA.



  1. Marc W wrote:

    Interesting posit. So, what is your answer to the first question? “Is the unemployment rate lower or higher than it was seven years ago?”

    You answer here may not show illicit political bias, but it will certainly show a coerced answer designed to gain political advantage.

    By a simple reading of the news yesterday, the unemployment rate in the US is 5%. That is certainly less than the news reported unemployment rate of 10.4% in 2009. That’s good news! Except…

    We have changed the way we count the unemployed, and specifically so we could achieve what appears to be a low number. We picked an arbitrary measure, as said people, after a certain time period, were “discouraged” from finding a job and no longer counted. We simply removed them from the denominator. This made employment data look great. The reality, from unreported U6 numbers, shows that unemployment is closer to 10% (U6). If you look at the way we calculated unemployment as far back as 1994, you will find that we have held an overall 23% unemployment in the population since the beginning of this recession, and that number is largely unchanged.

    A better measure is to compare employment to overall population. ( Here we see that we are just coming off the lows slightly cause by the 2009 recession, but the overall lack of gains echos the fact that we are not in recovery, and not better off than we were 7 years ago. In fact, we are at 59.5%, which is approximately where we were in 1979 during our “crisis of confidence”.

    Our unemployment measures ignore that we only have 62% labor participation. We have not had an economy like this one since the late 1970’s, under President Carter. It is no coincidence that much of the current President’s outcomes mirror the Carter administration, as most of the current President’s programs and effort mirror that administration. Especially the claims of massive employment gains, and improvement of overall wages.

    Our last and only hope is that what we are seeing in the markets of 2016 are not another repeat of the 1980 recession.

    Saturday, January 9, 2016 at 10:56 am | Permalink
  2. Iron Knee wrote:

    I’m not really sure what your point is, Marc. If someone is not looking for employment, then it seems silly to count them as “unemployed”. Like, would you count children, students, retired people, mothers who decide to stay at home, severely disabled, mentally ill, etc. as part of the “unemployed”? We have more retired people now than we used to have, so does that mean our economy got worse? Of course not.

    If you have some kind of proof that “we have changed the way we count the unemployed, and specifically so we could achieve what appears to be a low number” I would love to hear it. Otherwise, your comment sounds like you’re just repeating a GOP talking point. Not to mention when you blame unemployment on Obama and Carter. What’s next? Are you going to tell us that trickle-down economics works and that raising the minimum wage causes unemployment?

    Monday, January 11, 2016 at 1:07 am | Permalink