Politicians, teach thyself
Tom Means, professor of Economics at San Jose State University, spoke at a Saurman Provocative Lecture at SJ State, in which he explored the paucity of economic knowledge displayed by our political leaders. Means was formerly the mayor of Mountain View.
Do economists make good politicians?
[Speaking about his time in office as mayor of Mountain View] Most of the politicians I met were clueless about basic economic thoughts and concepts and so forth. When I say that I say it as a generalization to all politicians and local politicians.
When I got to Mountain View, people told me it did not have a daycare center. I see them all the time, I drive by them there’s all kinds. Then they’d say well there’s none that are run by the city. I’d say okay is that something the city should engage in or should we just let the private market handle this issue? . . . They’d say ‘well there’s a market failure, it’s too expensive for some people.’ So what do you want to do? ‘We want to build our own daycare center on public land and we’re going to help poor people.’ Okay how are we going to do that, who’s going to pay for that? ‘Well we haven’t quite got that figured out yet.’ We ended up with a nice day care center in a not-so-good neighborhood that’s high priced and it subsidizes 5 out of 100 clients. . . Here we are competing in the daycare market. It didn’t go that well. One is we were very high priced and that’s because our councilmember said we have to offer the best. One they never filled up the spots, two they never were able to then offer enough subsidies to cover their costs. . . It was a complete failure.
Golf was a huge money maker. In 1980 golf was at a huge demand and the public courses like Palo Alto, San Jose, Santa Teresa, and Sunnyvale were just overwhelmed. You know you couldn’t get on there. What happened? The demand for golf encouraged private developers and other cities to build more courses. So all of the sudden we had a huge increase in golf courses. . . It was publicly owned, we were competing against private courses. One, private courses didn’t pay as high of wages, we were paying people to mow lawns, two people $150,000 a year including benefits. The private courses weren’t paying that kind of money. The problem is there’s competition and our council is like ‘We’ll just raise the price and make more money.’ Really? I don’t have to play golf in Mountain View I can go to Sunnyvale, I can go to Palo Alto, there’s a lot of alternatives, but again they didn’t understand the market structure.
Watch the whole speech here.
Follow Opportunity Now on Twitter @svopportunity
Image by Anders Sandberg