Congress Gets Quizzed on Econ

Katherine Mangu-Ward | October 2, 2008

D.C.'s subway has sprouted a bunch of ads urging economic literacy on our lawmakers. They ask things like: "On average, how much does the owner get for every $100 of a restaurant’s sales? (a) $3, (b) $5 (c) $10 (d) $45."

The ads are posted by a group called Econ4U, which also tossed this line into my inbox recently:

A Center for Economic and Entrepreneurial Literacy (CEEL) analysis of economic education among congressional members revealed that less than 15% of current members have degrees in the business, economics, or finance fields.    The research showed that 30.5% of congressional members studied politics and government, while 18.1% majored in humanities.  In fact there are more members who studied science (7.5%) than economics (6.7%).

Looks like Sen. John "economics is not something I’ve understood as well as I should" McCain has company on the Hill.

The answer, by the by, to the restaurant question, is (b) $5.

Comments

|10.2.08 @ 4:53PM|#

Vague question. Is that gross or net profit they're talking about?

sage|10.2.08 @ 4:54PM|#

Wow, so these lawmakers that are so certain of economic collapse if their pork littered bill does not pass have no clue about basic finance or economics? Say it isn't so, Ethel!

Chuck|10.2.08 @ 4:59PM|#

It's always (b). Unless it's (c).

Nephilium|10.2.08 @ 5:05PM|#

prolefeed:

Actually... the answer would be $100. The owner gets all the money (leaving out theft); however, a large portion of it is either already set aside for expenses, or needs to be spent on them.

Adding in net/gross profit in front of much would clean up the question.

Nephilium... pedant mode off.

economist|10.2.08 @ 5:06PM|#

So...most members of Congress are as economically illiterate as we thought they were?

Shocking.

|10.2.08 @ 5:06PM|#

Prolefeed, I was thinking the same thing, I re-read it and it says how much the owner gets, so it's net. The owner gets what is left after everything is paid.

If the owner can do 20,000 dollars of buisness a week he's bringing home 1,000 dollars.

But that's not the kind of econ they need to learn on the hill. They need something more like this.

Betty has $1,000 in her checking account. Can Betty afford to buy a $700,000,000,000 car?

|10.2.08 @ 5:07PM|#

But just what is it they DO know anything about?

|10.2.08 @ 5:08PM|#

I guess a more apt question would start with Betty is $10,000,000,000,000, in debt and has no money in her bank account...

|10.2.08 @ 5:10PM|#

"""But just what is it they DO know anything about?"""

Come on you already know that answer.

Spending taxpayers money.

|10.2.08 @ 5:12PM|#

But just what is it they DO know anything about?

Maintaining power.

Dello|10.2.08 @ 5:13PM|#

TrickyVic,

But, I thought the automakers' bailout was only $85,000,000,000...

Cool Cal|10.2.08 @ 5:13PM|#

This is something I've long maintained as a fallacy of liberal electoral prejudice. I agree as much as the next Huffington Puffer that we need the Chief Magistrate to be well educated, but just having gone to an Ivy League school, even being intelligent doesn't mean that one has had a good education these days. It is tragically easy for any undergraduate to go through four years, and thence even another two of graduate school, without ever learning anything of substance. I could care less if our president has had a first class college education if the only courses he's ever taken are various permutations of Postmodern Feminist Literature, Psychology, and Sociology. More importantly, it is crucial to have a rudimentary background in economics, as he will have his finger on that button as well. What is sad is that some colleges have actually cleansed their departments of any fair mention of microeconomics whatsoever, with the Austrian and Chicago Schools as mere speedbumps on the road to an egalitarian future.

|10.2.08 @ 5:14PM|#

Unless a person owned a restaurant or did the books and/or taxes for restaurant clients, how would anyone know (or care about) the answer? This seems like a strange attempt at a gotcha. It's like a trivial pursuit question on a topic that virtually nobody knows much about. As a CPA, I could certainly find the answer, but I would never have known it off the top of my head without any research. Quick ... what's the average gross margin percentage for a manufacturer (as we don't want to be too specific, just like the vague "restaurant" questions)? You don't know? Ah, you morons!!!

|10.2.08 @ 5:15PM|#

It'll be a lot easier to turn a 19th Century mercantilist like McCain into a capitalist, than to turn a 20th Century Marxist like Obama.

|10.2.08 @ 5:16PM|#

Nevermind ... I just re-read the entry (which is a sly way of saying that I read it for the first time instead of just browsing it) and I see that the question itself wasn't the real point of the entry. I will shut up now.

|10.2.08 @ 5:17PM|#

Of course the wingnuts don't even stop to think that their heroes Ron Paul and John McCain scored badly too.

|10.2.08 @ 5:19PM|#

Republicans are so stupid. I hate Republicans. We hatses the Republicans so much. We jerks off to thoughtses of Republicans being boiled alive.

|10.2.08 @ 5:19PM|#

Cool Cal, off topic, but every time I see your handle it makes me think of The Moldy Peaches' "On Top".

"Just a cool cat in a small town..."

|10.2.08 @ 5:22PM|#

These wingnuts have stopped reporting on Venezuela in light of its recent recovery, while the capitalist states of Wal-Mart are failing thanks to the same free-market extremists who brought us the great depression, the Reagan years, and the Clinton Impeachment fails miserably.

|10.2.08 @ 5:22PM|#

It'll be a lot easier to turn a 19th Century mercantilist like McCain into a capitalist, than to turn a 20th Century Marxist like Obama.

Look at the good job we did with GW Bush!

Sorry, I no longer believe the GOP when they talk free matkets. I distinctly recall uber patriot John McCain rushing to Capital Hill to rescue the bailout plan. Or was that bailout the rescue plan? I get confused sometimes.

spoon it in oops|10.2.08 @ 5:24PM|#

debt is poop

|10.2.08 @ 5:26PM|#

Congresscritters ride the Metro where they'd see this ad? But I guess their staffs do.
Isn't it the job of lobbyists to provide this sort of info to legislators? As Brad points out, very few would know the answer (I guessed
3% and am in private industry.)

|10.2.08 @ 5:32PM|#

Sorry, I no longer believe the GOP when they talk free matkets.

You have no idea how great it is to finally hear my Republican friends admit this over the last few years. Somehow the growth of the federal gov't under Reagan and Bush I and its slight reduction in Clinton's first term (admittedly, that turned around in his second) couldn't convince them that the Repubs never meant what they said about small gov't.

Unfortunately, most of the population actually believed the Repubs were shrinking the gov't, so now they're blaming the meltdown on this fictional imposition of free market principles. As a result we're guaranteed more regulation than ever regardless of who wins.

Thank you, Republicans. Don't let the door hit you on the ass on the way out.

|10.2.08 @ 5:47PM|#

These wingnuts have stopped reporting on Venezuela in light of its recent recovery,

Yeah, it's going great down there. They just kicked out those right-wing wingnuts Human Rights Watch.

|10.2.08 @ 5:53PM|#

My mother would have put it like this.

"They don't have to be geniuses, they just need the good sense God gave a goose."

My mother would be very angry right now that they don't.

|10.2.08 @ 5:54PM|#

We don't need to be that specific with the questions. Some really general questions would help reveal politician's knowledge of political economy:

Q: If some rich Wall Street folks have made a buttload of money for their firms over the past few years taking on extraordinarily risky paper that was buoyed up by a rising economy, but now that paper has gone toxic as the economy contracts, revealing those investments to have a fair market value of maybe 10% of what the Wall Streeter bought them for, is it socialism and an incredibly bad precedent for the government to debase the currency, raise taxes on ordinary folks who didn't make these braindead investments, and invite another Great Depression, in order to purchase this paper at prices well above fair market value and prevent the firms from losing all their illusory profits in a bankruptcy that removes stupid and imprudent players from the marketplace and transfers their assets to smaller firms staffed by more prudent people?

A) We must bailout these firms -- they are too big to fail.

B) We must bailout these firms and throw in all kinds of pork barrel unrelated items in the enabling legislation to rope in congressional folks on the edge of voting 'no' and make the bill pass, thus rewarding these politicians for doing the wrong thing and ensuring they stay in power to further fuck things up as the economy nosedives.

C) We need to bailout these firms, throw in pork, and add even more socialist measures, not because we need the votes, but because this is a golden opportunity to slip all kinds of nastiness we've been salivating to do for a long time because we're socialists, whether we sport an R or D, and enjoy sticking it to a gullible public.

D) There is no option D.

Neu Mejican|10.2.08 @ 5:56PM|#

I guessed between 3 and 5 percent.
Assuming the CI around their number is + or minus 2%, I was exactly correct.

;^)

It is, however, a pointless question, as Brad notes above.

|10.2.08 @ 5:58PM|#

These wingnuts have stopped reporting on Venezuela in light of its recent recovery,

A veritable paradise it is. The murder rate in Caracas is only a bit more than three times the murder rate in Detroit. We Detroiters actually think ours is a bit excessive, but hey, Venezuela is a different culture and who are we to judge?

|10.2.08 @ 6:26PM|#

They've been spending most their lives,
Living in a socialist paradise.

No Name Guy|10.2.08 @ 6:28PM|#

"...30.5% of congressional members studied politics and government, while 18.1% majored in humanities. In fact there are more members who studied science (7.5%) than economics (6.7%)."

Hmmm...14.2% who did something like a fact based course of study, while 48.6% studied blah, blah, blah, squishy wordsmithing with no hard and fast reality to reign them in.

Yeah, no wonder these dumbfucks can't balance a budget or comprehend any numbers based reality. But at least they sound good on the sunday news shows and are inspiring.

|10.2.08 @ 6:33PM|#

Here's what I and my good friend M.C. Hawking have to say about Congress:

Upon blind faith they place reliance,
What we need more of is science!

DannyK|10.2.08 @ 6:50PM|#

I'm with Pro Libertate and the Hawk. Economists are a dime a dozen, what we need are scientists. After writing a few grant applications, you've got a PhD in bulls***.

|10.2.08 @ 7:21PM|#

Brad-5:14

No, I think your point is good. There are literally thousands of questions that could be posed to our economically slow solons that would both expose their financial ignorance and be queries the answers to which most eentrpreneurs would know.

|10.2.08 @ 7:24PM|#

Neu-

We agree.

|10.2.08 @ 7:48PM|#

Danny K-

What about languages? Music? History? Drama? Debate? Comparative Religions? Literature? Marketing? Business Organizations? Business Law? The Healing Arts? ( I don't include medcial "science" within this subject matter).

IMO, I would rather have nimble, creative minds powered by an incessant curiosity, able to apply the requisite data and skill needed to carry the day. Folks trained in the hard sciences are just not, in general, in my opinion, best suited for the foregoing role. Again, IMO, based on my experiences, those that betroth the hard sciences are not the best and the brightest minds.

|10.2.08 @ 9:19PM|#

Again, IMO, based on my experiences, those that betroth the hard sciences are not the best and the brightest minds.

Yeah, I have contempt for dimwits like these folks, too: Einstein. Copernicus. Darwin. Curie. Shandrasekhar. Newton. Pauling.

Dummies all, yeah?

/sarcasm

cunnivore|10.2.08 @ 11:05PM|#

Unless a person owned a restaurant or did the books and/or taxes for restaurant clients, how would anyone know (or care about) the answer? This seems like a strange attempt at a gotcha. It's like a trivial pursuit question on a topic that virtually nobody knows much about.

I don't expect most people would know the exact figure, but if someone thinks any business pockets 45% of revenue as profits, they don't know how business works. So if someone answers $3 or $10, I could forgive that, but I suspect a lot of people -- and a lot of Congressprimates -- think that eeeeevil business owners are pocketing the lion's share of the money they take in.

cunnivore|10.2.08 @ 11:09PM|#

The point being that legislators don't realize how much they're squeezing business owners when they throw regulation after regulation and tax after tax at them. They figure, gee, that gas station is bringing in tens of thousands of dollars every day, they can afford to have an extra person on duty at all times to pump gas for elderly people. Make it the law!

|10.2.08 @ 11:22PM|#

Neu-

We agree.

Then fuck it, I'll have to disagree.

What were we talking about?

|10.2.08 @ 11:37PM|#

What percent of CxOs have econ/business degrees? I like how "science" is a single major.

Ravac|10.3.08 @ 11:53AM|#

Again, IMO, based on my experiences, those that betroth the hard sciences are not the best and the brightest minds.

In a certain context, this is true. Getting a science degree is pretty simple, especially at the undergrad level. All you have to do is follow the methods & protocols developed over the last hundred years and be as objective as possible when doing labwork.

For most of the liberal arts, you really have to swallow a bunch of bullshit and spin it back to the professors as somewhat original thought.

Much more difficult to write a paper on post-modern feminist criticism of cubist architecture than it is to report physics results.

economist|10.3.08 @ 9:02PM|#

Ravac,
Not to put too fine a point on it, but that is fucking bullshit. The fact that in the hard sciences there actually is a RIGHT answer and WRONG answer means that we can't just bullcrap and agree with the professor's political views (as can often work in many English, history, and social science classes). I'll bet money that most liberal arts majors who graduated top of their class couldn't solve one of the test questions from my HIGH SCHOOL calculus class.

economist|10.3.08 @ 9:03PM|#

Sorry about the rant. I should probably mention here that I'm actually an engineer, but I also have a healthy respect for good economics,hence the handle.