Americans may not have articulated it to themselves, but they have been considering complex economic issues and forming opinions about them, according to Princeton University economist Alan Blinder, one of several experts who participated in a panel discussion on the public’s knowledge of economic policy and how they know it, held December 5 at the American Enterprise Institute in Washington, DC.
“Public opinion is presumptively an input to policy formation in a democracy because politicians respond to it or at least are believed to respond [to it],” said Blinder, who served on the President’s Council of Economic Advisers in the 1990s. Fellow panelists included Jeffrey H. Birnbaum of the Washington Post, Douglas Holtz-Eakin of the Congressional Budget Office, Steve Liesman of the CNBC news organization, and James K. Glassman of the American Enterprise Institute, who moderated the discussion.
“You’d like to know better what lever to pull and how to improve the economic knowledge in the population,” said Holtz-Eakin, director of the Congressional Budget Office from 2003 to 2005.
In the first half of 2005, President George W. Bush led a charge to reform Social Security that included the creation of personal savings accounts. That effort was slowly rolling along before being derailed by Hurricane Katrina, which presented Americans with a host of new challenges.
Katrina Shifted Concerns
During the debate over Social Security, Americans learned the entitlement program would begin paying out more than it was taking in, thus leading to huge and difficult-to-manage deficits. In the wake of Hurricane Katrina, Americans confronted the prospect of paying hundreds of billions of dollars for hurricane relief and reconstruction. The federal budget deficit and federal spending began to concern individuals other than policy experts and lawmakers.
Blinder and fellow researcher Alan Krueger had already set out to understand how news affects the public’s knowledge and opinion of economic issues in a report published in September 2004 by the National Bureau of Economic Research, “What Does the Public Know about Economic Policy and How Does It Know It?” The paper, based on research they conducted in 2004, presents results of a telephone survey of 1,002 individuals on economic issues such as tax policy, the budget deficit, and Social Security.
The study sheds light on how the public gathers its knowledge of economic issues, a matter that should be of interest to those who make or shape economic policy.
“Americans generally want to know about economic issues,” the American Enterprise Institute’s Glassman said in his introduction to the December discussion. Their knowledge, however, varies depending on the source they use for information. The small number who consider magazines to be their primary source of information are best informed, according to the Blinder and Krueger study.
Most Rely on TV
Television, by far the most popular conduit for those seeking economic knowledge, leaves its viewers with below-average knowledge. But television viewers outperform those who turn to political leaders, friends, relatives, or civic or religious leaders as their primary source of information, according to Blinder and Krueger.
Nearly half of Americans turn to television as their most important source of information about economics, and more of those individuals are watching cable stations than network stations, according to Blinder and Krueger.
Newspapers are the next greatest source of economic information, with about 19 percent of Americans regarding them as their most important source. Of this 19 percent, more than half turn to local newspapers for economic issues, while about a quarter rely on national newspapers such as The New York Times, Washington Post, or Wall Street Journal.
Readers Are Partisan
The readership of national newspapers was quite partisan, according to the research.
“Liberals are a stunning eight times more likely than conservatives to read The New York Times, and conservatives are twice as likely as liberals to read The Wall Street Journal,” Blinder and Krueger wrote.
While policymakers and public policy organizations often present their work on a newspaper’s editorial page, most newspaper readers do not turn to op-eds for economic information. Only 9 percent choose the editorial page as the section they “turn to to learn about the economy,” according to the report. Most people go to the business section of the national news pages.
Larry Scholer ([email protected]) is an editor at The Heritage Foundation.
For more information …
A May 2004 working paper version of the report by Alan Blinder and Alan Krueger, “What Does the Public Know about Economic Policy and How Does It Know It?” is available online at http://www.princeton.edu/~ceps/workingpapers/99blinderkrueger.pdf.
The final report, released September 2004, can be purchased for $5 from the Social Science Research Network, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=595186.