How Accountability Shapes National Borrowing Rates | The Professor Is In
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If I was the boss, I'd be like, geez, if you've got time to play golf, yet still the economy's not doing great, or your latest tariff announcement was a mess, or you decided to invade a country without thinking ahead to what happened next, then I'm going to put you on a performance improvement plan.
Last week, the White House pulled the press badges of CNN, MSNOW, and Politico. The move was immediately challenged in court, and by Thursday, all badges were given back after a federal judge ordered the White House to immediately restore access. But this was a major escalation by President Trump in his ongoing war against the press. Justin, you made a piece talking about the economics research around what a free press actually does, looking at a series of natural experiments from economic history. Today, I'm going to go through and bring you questions from our audience in this segment of The Professor Is In. I'm Augusta, and I'm a producer here at Platypus Economics.
And I'm Justin Wolfers. As Augusta just said, this is The Professor Is In, but I'm a professor of economics, so you should think about this as office hours. Augusta's bringing me your questions. Come on in. Make yourself comfortable.
Okay, so here was a question that we got that surprised me, which is, if governments are interfering with the free press, does that have a downstream effect on markets?
And the answer is yes, it does. Let's go back to why there's some economics in all of this. Maybe when you're a youngster, you learned a little bit of democratic theory in your civics class that people in their community would get together and want to come together and create a better community or in a greater America. And someone will put up their hand and say, I'm willing to help. And the neighbors would all chat about it. And they'd come up with the right person who'd make exactly the right choices. Look, that might be how democracies work. Maybe. There's another possibility, which is that people are self-interested. That's how we think about in economics. When people are in markets, we think that that's why they open businesses.
That's how they set their prices. So maybe, and this was a school of thought that really came about in the 80s called public choice, this says maybe that self-interest sticks with you once you become a politician. So the same tools economists use to think about how people operate in markets, everyone's trying to get ahead for their own self-interest, maybe we should use those tools for thinking about politicians too. That makes sense. And the moment you understand that, you understand that our job as a voter is actually a lot like a boss's job at a workplace. What's the boss's job at a workplace? Let's talk about platypus economics for a moment. Augusta, you work for platypus economics. I think I'm the CEO.
And my problem is I can't see what you're doing all the time. And the real problem is you have passions beyond economics. There's a rumor about that. Is that true, Augusta? I can admit that that is true. Okay. And so my fear is at any given moment, you might be pursuing those passions rather than platypus economics. I can't fully observe what you can do. And so on any given moment, what's one of those passions, Augusta? I'm passionate about books. Right. So what I'm terrified of is at any given moment, you're reading a book instead of helping platypus economics. I know you'd never do that.
That doesn't sound like me.
But also I don't know it. And that's the point. I can't see. Sometimes we talk about it as the worker wants to be lazy. The boss wants maximum productivity, but sometimes it's just different things. The worker wants a promotion. The boss wants the work done. The worker wants to read a book. The boss wants whatever it is bosses do. Okay. Well, we are the boss of politicians. And in order to be effective, bosses are more effective at getting their workers on task when they can see what they're doing and sometimes say, hey, that's not the right thing. But they don't just say it. They have to have a few incentives.
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Chapters
3 chaptersSpeakers
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