Why Economic Concepts Are Difficult To Use In Politics

The paradox of thrift is an idea that is universally accepted by economists. On the other hand, it is not easily understood by the general public. They find it hard to believe that is a bad idea for everyone to increase savings at the same. Economists realize that it would reduce demand and slow down economic growth. This would have the counter-intuitive outcome of reducing gross savings. This article does a nice job on the problems faced by politicians when they attempt to use economic ideas to make decisions. It is sometimes better to go with public opinion than to base decisions on abstract economic ideas. It is especially difficult to do so when there is not a consensus among economists on the idea. The press will exploit the disagreement among economists to take advantage of controversy. That builds an audience. Moreover, whenever an economic concept has practical implications, the economists that work for "think tanks" funded by political interest groups will flood the media with information that favors the interests of their sponsors. The misuse of economics by those who oppose climate change policies is a classic example.