HASENMILLER: Keep greedy politicians in mind at the polls
November 3, 2008
Many of you will probably be voting today, and most of you are probably casting those votes based on what the politicians you vote for have been promising to do. One thing to keep in mind, however, is that there is often a difference between what politicians say they will do and what they actually do. This is the case with all political parties at every level of government. That’s why it is important to pay attention to the politicians’ own personal incentives, in addition to what they say.
Although it is a common belief that the government tries to do what is best for society, you must remember that government is made up of individuals, and individuals respond to individual incentives. In the case of politicians one of the driving incentives is to be elected or re-elected, which is why government often concentrates not on what is best, but on what will yield the most votes.
This means that if the public believes a policy will work, politicians will likely support it, even if those politicians have specific knowledge about why it won’t. The opposite is also true. If the public believes that a policy is bad, even politicians who know that it is necessary will typically oppose it. And who blames them? If they go against public opinion they won’t be re-elected, and therefore won’t be able to support any bill, good or bad.
This is also why the concerns of certain groups of people who are less likely to vote, college age students for example, are often ignored.
Looking at the incentives of politicians can also help explain excessive government spending and taxation. The effects of many policies imposed by government are often not immediately seen. This is especially true of many economic issues. For example, if a raise in taxes causes economic repercussions many years later, it is likely that people will have long since forgotten the tax increase that actually caused the problems, and the politician or politicians who sponsored it may no longer be in office, or may have moved on to another area of government.
Our current economic crisis was caused largely by policies enacted in 1977 and 1992, but the people responsible for those policies are long gone now.
If a politician proposes a spending bill, it may take years to conclude whether or not it was actually effective in doing whatever it was supposed to do. But what will yield votes is the fact that they did something, and spending money is considered doing something. To a politician, there is little difference between effective and ineffective policies.
Education is an excellent example. There has been a lot of talk, recently, about investing in early childhood education, but whether that is a good use of our money — or, more importantly, whether the specific ways in which politicians invest in it is effective — will likely not be seen for a decade. And by then it will be too late to get our money back.
In addition, people working in various departments of government have their own incentives for increasing spending. Typically, in government the size of the budget that a person oversees plays a large role in his or her salary. The more money you keep track of, the more you get paid. This gives these departments the incentive to have their budgets expanded as much as possible, causing them to ask for much more money than is necessary, which leads to increased wasteful spending.
These departments also have incentive to see to it that they spend all of the money they are given. If not, their budget may be cut the following year, which could mean putting off a raise.
This is the exact opposite of how it works in business. In business, the incentive is to cut as many costs as possible. (LEAN manufacturing, anyone?) In the real world, the people who cut these costs effectively are the ones who get the raises. But each person will respond to his or her own individual incentives.
One of the best ways to see what politicians will do is to look at their records. Pay attention to what they have already done instead of what they are promising to do. After all, actions speak louder than words.
So, if you are voting today just remember that the government is not one big, benevolent entity out to help you. It is a bunch of individuals out to help themselves. The only time you get helped out is when both your incentives and your representatives’ incentives align.
— Blake Hasenmiller is a senior in industrial engineering and economics from DeWitt