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October 25, 2006
Spot The Argumentative Flaw
This is child's stuff. From the WSJ:
Investors Business Daily recently pointed out that since the Bush tax cuts took effect in 2003, "the economy has added $1.26 trillion in real output, $14.4 trillion in net wealth and 5.8 million new jobs." But that progress doesn't seem to matter to the liberals, whose primary goal is to raise income tax rates. "Taxing the rich" will be the leading economic argument of a 2007 Democratic House, and a rollback tax bill of some kind will reach the floor.
Observe:
The Bullshit Daily editorial page recently pointed out that since al Qaeda's 2003 bombing of the Marriott Hotel in Jakarta, Indonesia, "the economy has added $1.26 trillion in real output, $14.4 trillion in net wealth and 5.8 million new jobs." But that progress doesn't seem to matter to the liberals, whose primary goal is to stop al Qaeda from conducting terrorist attacks. "Fighting terror" will be the leading argument of a 2007 Democratic House, and a homeland security bill of some kind will reach the floor.
And the fun thing is, they're both precisely as true.
October 25, 2006 | Permalink
Comments
And yet the working class in Indonesia still wonder why everyone on TV thinks things are so swell.
Posted by: abjectfunk | Oct 25, 2006 2:47:54 AM
It even has a Latin name!
Posted by: Neil the Ethical Werewolf | Oct 25, 2006 5:25:57 AM
There is a name for Ezra's argument as well, although it isn't latin.
This is a false analogy, because no one made the prediction that the terrorist attack in Indonesia would aid the American economy. However, economic growth was the specific prediction made when the tax cuts were passed.
In truth, one of the criteria, from Neil's handy link, of a post hoc fallacy is that "The fallacy lies in coming to a conclusion based only on the order of events, which is not an accurate indicator." If, as appears to be argued here, that tax cuts have the same relationship to economic growth as terror attacks in Indonesia, rather than the being a mechanism of providing more money to people who will use it in ways that will encourage economic growth (as the Bush admin theorized) than one would have to explain how they managed to get this prediction right.
The WSJ may in fact be wrong about the effect of tax cuts. Even if they are wrong however, it is not a post hoc fallacy.
There are explanations of course. Pure serendipity would be one (that one always exists) but I don't think many people will find it too convincing.
When you make a prediction about what will happen if you do something, and you do it and then it happens that is considerable evidence that your logic is correct. Not iron-clad of course, but if we want to claim that such things have no weight, we have to throw a lot of science out the window and simply assume that everything that happens is pure chance.
Posted by: Dave Justus | Oct 25, 2006 7:28:33 AM
a rollback tax bill of some kind will reach the floor.
Hey I'll settle for the fact that a bill making the tax cuts permanent won't reach the floor. This will be one of the unheralded positive effects of a Dem takeover of Congress - the incredible fiscal bullet that we'll be dodging. Dems won't have to vote to raise taxes - Republican legislative chicanery back in 2001 which resulted in the tax cuts being only temporary will have done the job for them.
Posted by: Andy | Oct 25, 2006 8:47:09 AM
I think the point is duPont's offering a classier, upscale version of Roy Blunt's "here's the real Democrat Agenda" - and again, he forgets the part about The Homosexual Agenda (TM). But once today's Gay Marriage decision comes down, it's gonna be all about us again. Yeah, baby. :) All of which is a reminder of how little Republicans really have to run on - it's all come down to slapping a fright wig on Nancy Pelosi and scaring the base... even demonizing gays is losing its punch.
Posted by: weboy | Oct 25, 2006 8:57:25 AM
Investor's Business Daily is the poor man's WSJ editorial page, isn't it?
When you make a prediction about what will happen if you do something, and you do it and then it happens that is considerable evidence that your logic is correct.
Not necessarily, Dave. To make sure you're not commiting a post hoc-propter hoc fallacy you also have to have reason to believe that it wouldn't have happened if you hadn't done it. (This is why scientists use control groups.) I just cast a minor magic spell, and I predict that having done so the sun is going to rise (where I am) within an hour. But when the sun does rise, that won't prove me right; because it would've risen whether I had cast the spell or not.
So the argument is that the economy would have grown with or without the 2003 tax cuts; in fact I believe that the growth rate since 2003 has been rather anemic for a recovery from a recession. But fortunately, if we're checking the WSJ's logic, we don't need to rest on counterfactuals. The same people who are now implying that rolling back the 2003 cuts will stop economic growth also said that Clinton's 1993 tax hikes would keep the economy from growing. They were as wrong as wrong could be. This is evidence that their logic is wrong.
Posted by: Matt Weiner | Oct 25, 2006 9:06:04 AM
Matt,
Everyone acknowledges that the economy is a complex system. Complex systems can't really be studied in a control group scenario. Unfortunately us, there isn't anything definitive in such an environment. The same stimulous will not have the same effect due to other different circumstances.
That is one thing that makes economics, and economic prediction so hard.
Note that I said 'considerable evidence' and that I said this isn't 'Iron Clad.'
We don't know if the Clinton Tax increases slowed economic growth or not. We do of course know that the 90s were good economic years, almost as good as the economy has been since 2003, but we of course don't know how good they would have been without those tax increases, or with a tax break. I highly doubt you would find many if any, who said that the Tax Increases would cause a recession, rather than that they would slow growth.
However, the point of my comment wasn't to defend tax cuts specifically (although I do agree with them) but to point out that Ezra's claim that this is a post hoc fallacy is incorrect.
For example:
Since 1900 the use of fossil fuels has
dramatically increased the amount of C02 in the
air leading to global warming.
and
Since 1900 millions of women have gained sufferage
and can now participate in democracy leading to
global warming.
Note that the structure is the same as Ezra's post. That does not prove that global warming advocates have committed a post-hoc fallacy any more than Ezra's post proves that the WSJ commited a post hoc fallacy.
Posted by: Dave Justus | Oct 25, 2006 9:27:19 AM
We do of course know that the 90s were good economic years, almost as good as the economy has been since 2003
Are you lumping in the whole 90s, including the recession under the first President Bush, and comparing that with the period of recovery from the economy's low point under G.W. Bush? That's what it sounds like you're doing. And that would be wrong.
Anyway, you now seem to be saying that since the economy is complicated we just don't know whether Clinton's tax increases led to the subsequent economic growth, or whether the economy would have grown without Bush's (hideously irresponsible) tax cuts. But when we don't know what is causing what, to say "Since the tax cuts the economy has grown" is precisely to commit a post hoc-propter hoc. The reason your carbon dioxide-women's suffrage example is a false analogy is that there is substantial evidence that carbon dioxide leads to global warming.
BTW, here's a chart indicating that since 2003 job growth has been worse than what the Administration predicted would follow from its tax cuts.
Posted by: Matt Weiner | Oct 25, 2006 9:58:14 AM
Yes, the American people are being duped into tax cuts just as badly as they are being duped that DHMO (Dihydrogen Monoxide) is safe for human consumption.
Oh the humanity!
Posted by: Guy Montag | Oct 25, 2006 11:09:36 AM
I highly doubt you would find many if any, who said that the Tax Increases would cause a recession, rather than that they would slow growth.
Hey - can I have some of what you're smoking? Let's go to the tape:
"The tax increase will kill jobs and lead to a recession, and the recession will force people off of work and onto unemployment and will actually increase the deficit." - Newt Gingrich
"I believe this will lead to a recession next year," - Newt Gingrich
"A recipe for economic disaster" - Phil Crane
"It is going to lead to a Clintastrophy, an economic Clintastrophy" - Dan "Scumbag" Burton
"April Fool, America. This Clinton budget plan will not create jobs, will not grow the economy, and will not reduce the deficit." - Pete Domenici
"We are buying a one-way ticket to a recession" - Phil Gramm
"I want to predict here tonight that if we adopt this bill the American economy is going to get weaker and not stronger, the deficit four years from today will be higher than it is today and not lower ... When all is said and done, people will pay more taxes, the economy will create fewer jobs, the government will spend more money, and the American people will be worse off." Phil Gramm
"This plan will not work. If it was to work, then I'd have to become a Democrat and believe that more taxes and bigger government is the answer." John Kasich
Posted by: Andy | Oct 25, 2006 11:10:49 AM
You're just wrong here, Dave. The WSJ is suggesting a causal relationship between that growth and the tax cuts. No one -- literally, no one, not even you -- thinks the tax cuts "added $1.26 trillion in real output, $14.4 trillion in net wealth and 5.8 million new jobs." At best, you can argue they added to the margins of those numbers while radically increasing the deficit. To try to mislead as the WSJ is -- well, I expect this from third-rate bloggers, not major editorial pages.
Posted by: Ezra | Oct 25, 2006 11:56:41 AM
Ezra, a causal relationship doesn't entail that the tax cuts were the only cause, or responsible for all the growth, and neither does the WSJ. Their implicit claim on a reasonable reading is that the cuts contributed to the growth.
I think Dave more or less gets at the argumentative flaw of the topic post, though as Matt points out, it isn't a matter of what's predicted but rather of whether there is a good reason to think there's a causal connection. There's a plausible link between tax cuts and economic growth, but no plausible link between what happened in Indonesia and our economic growth.
I also agree with Matt that the tax cuts were hideously irresponsible, that they were very badly targeted in terms of economic growth, that they were far larger than we could afford given the baby boomer crunch coming soon, that the war should have cancelled them, and that we're going to be paying the bills for these cuts for a long time.
Posted by: Sanpete | Oct 25, 2006 12:10:21 PM
Matt,
Certainly the economy is complex. That is one reason that there are competing economic theories out there. If it was simple, there would be no controversy.
There are many factors that influence economic growth. That is blindingly obvious. Some of them we think we have identified, some of them we are unsure of. Some of them we can predict, some of them we cannot.
There is a theory that lower tax rates will result in more growth (with some caveats of course.) This theory may in fact be incorrect. To be a post hoc fallacy though, requires certain characteristics, primarily the lack of a mechanism to explain how the two things are connected. The lower taxes will yeild economic growth theory does state that mechanism (more investment, wiser decisions by individuals than governments etc.) Even if they are wrong about the mechanism, it is still not a post hoc fallacy. They are simply wrong in such a case. Economic growth after the tax cuts is not definitive proof, but it is valid evidence.
Similarly, we don't know all the details about climate change. We don't know all the inputs. We don't know all the feedback mechanisms. This is one reason that future climate predictions come in a range.
Andy,
I was unclear, I meant many if any economists. Politicians of course often greatly exagerate likely effect of things. Certainly you are correct on that.
CAll sorts of stupid claims are made by politicians of all stripes.
However, I freely admit that the statement as I presented it was incorrect.
Posted by: Dave Justus | Oct 25, 2006 12:23:54 PM
"No one -- literally, no one, not even you -- thinks the tax cuts "added $1.26 trillion in real output, $14.4 trillion in net wealth and 5.8 million new jobs."
Certainly I don't think that. I tend to think that things outside of governments control are far more important than anything that the government does.
One interesting thing about economics though is that a little bit of positive push can result in a lot of positive gain. Partially this is because economics is somewhat of a self-fulfilling prophecy, if people think the economy will do well, it probably will, and if they think it will do bad, it will probably do bad. This is one reason that consumer confidence is an important number.
Theoretically, if people thought that a tax growth would benefit the economy, then the economy could grow completely out of proportion to the direct benefits of the tax cut.
Posted by: Dave Justus | Oct 25, 2006 12:58:32 PM
Dave Justus: "We don't know if the Clinton Tax increases slowed economic growth or not. We do of course know that the 90s were good economic years, almost as good as the economy has been since 2003, but we of course don't know how good they would have been without those tax increases, or with a tax break. I highly doubt you would find many if any, who said that the Tax Increases would cause a recession, rather than that they would slow growth. "
What we do know is that Republicans said that it'd cause problems, and that it didn't. The leading GOP economist in the Senate, Phil 'Enron Criminal' Graham, said that it was 'a one-way ticket to a recession'. I don't have quotes from the WSJ editorial page, but I recall that they had absolutely nothing good to say about it, and they did, at length, and in total error.
Posted by: Barry | Oct 25, 2006 5:11:33 PM
Andy, thanks for that article. I hadn't been able to find contemporary quotes from Republicans on the Clinton tax policies. Cleaned -up link.
well, I expect this from third-rate bloggers, not major editorial pages.
Ezra, you don't literally mean that you don't expect this from the WSJ editorial page, do you?
BTW, here's the original IBD piece.
Posted by: Matt Weiner | Oct 25, 2006 10:26:00 PM
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