Dave Hebert, senior research fellow at the American Institute for Economic Research, has seen a major shift in public opinion of the economics profession.
“Twelve years ago,” Hebert tells Michael Van Beek in this week’s Overton Window podcast, “the economist would walk into the room, and a chill would descend. It was not that we were truth-sayers or anything like that, but suddenly there was a sense that a serious contender for argumentation, for evidence, for logic has entered the scene. And we got some deference at some level. If you saw economists disagreeing about the outcomes, there was never really an impeachment of the person’s ideology or integrity.
“Today, we kind of see the opposite. An economist walks into the room, and everyone gets on their toes, ready to shout down and tell us that this is a dismal pseudoscience, that everything we know and have held near and dear in our hearts is lies, and that we’ve conned the American people. So the change has been massive, at least from what I can tell.”
Hebert attributes that shift to two factors: Detailed economic data that once required expensive and timely efforts to acquire have in the past decade become readily available online and through Federal Reserve phone apps. At the same time, drastic changes in fiscal policy are coming and going with greater speed. “So look at the first quarter of the year, from January through April,” he says. “Tariff policy, one of the things that I work a lot on, changed almost every three days.”
In a highly politicized discussion of trade and tariffs, Hebert says, economists still have the advantage of solid ideas that have stood the test of time. But even that can be a challenge as news cycles and attention spans get shorter.
“It’s a very busy market, and a competitive one,” he says. “But of course, you have the advantage of having principled economic theories that you can draw from that never get old, that never go stale.”
He credits his experiences as both a student and teacher for giving him this solid grounding.
“When it comes to working and teaching in the classroom, I was very fortunate,” he says. “I went to Hillsdale. I had fantastic economics professors there. I went to George Mason and had fantastic economics professors there as well. And one of them, Walter Williams, really just impressed upon us that the classroom is never to be used to proselytize or indoctrinate, ever.
“So you can teach them the good stuff. You can say things like, hey, when the price of apples goes up, people are going to buy fewer apples. You can teach them the effects of minimum wage laws — that they’re going to cause higher unemployment or at the very least disemployment effects. But that does not give you the right to teach them that minimum wages are bad. You have to keep it in the realm of positive analysis and keep away from the normative stuff.”
As Hebert’s career shifted from teaching to research, he has adjusted to meeting more pressing deadlines without sacrificing detail or accuracy.
“What I’m trying to work on right now is really trying to focus on speaking those timeless truths that we know are true, that have held for hundreds of years at this point, and that have been evidenced throughout history,” says Hebert. “So really kind of focusing on the nuts and bolts of what I try to do and what we try to do at AIER, while also trying to remain current. And the tension between those two is omnipresent. But I think so far, at least, we’ve done a pretty good job at navigating that tension.”
Hebert sees opportunities to nudge voters toward better policy, but he recommends keeping reasonable expectations in the current trade environment.
“Obviously, total victory is well outside the Overton Window at this particular point,” he says. “One thing we can do is lay the groundwork for when the Overton Window actually does shift. That includes having projects on the shelf, having evidence out there that these things are bad ideas, that they’re counter to their very stated goals. Having all that out there ready to be picked up when the window inevitably does shift is vital.”
One protectionist innovation that is ripe for re-appraisal is the Jones Act, a section of the 1920 Merchant Marine Act that requires vessels transporting cargo between U.S. ports to be built, flagged and crewed in the United States.
“Saying we should just scrap this entire thing is well afield of the Overton Window and has been for more than 100 years at this point,” Hebert says. “But I like to think it’s moving in the direction that I want it to move, and not just because of me. There’s excellent work coming out of the Cato Institute for example. That’s moving more slowly than I would have liked, but what we can do in the case of the Jones Act is point out examples where exceptions have been granted. The Jones Act is almost always rescinded temporarily in cases of national emergencies or natural disasters. You see the president and people in D.C. basically say hey, we’re going to suspend the Jones Act temporarily. We need to get people on their feet. And then we see other exceptions for some of our remote islands like American Samoa or the Bahamas and certain localities in the United States that are at some level isolated.
“Well OK, once we have exceptions for a few of these places, why not have exceptions for more of them? Hawaii is not exempt from the Jones Act, and because of this, we see cows being flown by airplane from Hawaii to California and then shipped by truck. You can get a lot of cows on an airplane, but not that many. And it’s also really expensive. But if I could put cows on a ship instead, I could suddenly cut the cost of beef dramatically for the American poeple, and I can increase the ability of farmers in Hawaii to ship their beef around the world.”
Patiently using the lens of economics, Hebert says, makes it possible to turn incremental improvements like these into larger and longer-term changes.
“It’s important to lay the groundwork for what we want to do in the future while being cognizant of what we can accomplish today.”
Listen to the full conversation on the Overton Window Podcast.
