Voters Love the Policies That Economists Love to Hate
Economists and ordinary people often seem to inhabit different planets, but seldom has the chasm been this wide.
As former President Donald Trump and Vice President Kamala Harris compete for any possible edge in a tight election, they have offered a plethora of ideas that, while delighting voters by varying degrees, have appalled economists because they would distort markets or deepen America’s fiscal hole.
The Wall Street Journal’s recent poll asked 750 registered voters about the presidential candidates’ proposed economic policies. Then, at the Journal’s request, the University of Chicago’s Clark Center put exactly the same questions to a panel of 39 top academic economists.
Trump’s plan to stop taxing tips for service workers—an idea Harris adopted after the former president announced it—is supported by about four-fifths of voters polled by the Journal. But among economists, 87% disapprove, saying it would arbitrarily benefit a small subset of lower-wage workers, distort the labor market, widen the budget deficit and create incentives to game the system.
Trump has proposed across-the-board tariffs of up to 20% on imported goods. Forty-seven percent of voters approve of the idea, slightly more than those who disapprove. By contrast, 100% of the economists, who span the political spectrum, said they “strongly oppose” the idea.
Trade is a bedrock of economic development that, in theory, enables each country to focus on what it is good at.
“When you put a tariff on something artificially, you’re going to make things more expensive, and if it’s an input, like steel for example, then you’re going to make the downstream companies that are using steel less competitive,” said Steven Kaplan, a conservative-leaning economist at the University of Chicago’s Booth School of Business.
Peter Stewart, a manager at a chemical provider to the fracking industry in Texas who supports Trump, said he thinks tariffs would encourage Americans to buy more products made in the U.S.
“I wonder, some of these economists, what is their vested interest?” said Stewart, 49. “You never know whether you’re getting the truth or not anymore.”
The American Economic Association defines economics as the study of how people use resources, respond to incentives and make decisions. Economists use data and theoretical models to evaluate whether government initiatives make people, and society at large, better off.
The father of economics, the 18th-century philosopher Adam Smith, extolled the invisible hand of markets and decried spendthrift kings and ministers. With fiscal rectitude out and populism in, modern economists say Smith would be holding his nose if he were alive today.
“We’ve done a terrible job of educating the American people,” lamented Edward Glaeser, a center-right economist at Harvard University.
Eric Maskin, a Harvard economist and a 2007 Nobel laureate, said: “I also blame politicians who know better for not trying harder.” Maskin said he can’t recall an election cycle that reeked so badly of rotten policy. “I think this may be a new low,” he said.
Harris has proposed a ban on corporate price gouging for food and groceries. It is one of her most popular policies. The share of voters who approve it exceeds the share who disapprove by a margin of 49 percentage points.
By contrast, two-thirds of economists disapprove and just 13% approve. “ ‘Price gouging’ is too vague to be useful—and would be harmful if it was clarified enough to be significant,” said William Nordhaus, an economist at Yale University and a 2018 Nobel laureate. “I doubt if it will be taken seriously.”
History has shown that it is a bad idea for the government to attempt to regulate prices, which normally serve to balance supply and demand in a competitive market. “It interferes with the market system,” said Maskin, who described his politics on noneconomic issues as left of center. “Higher prices help to equilibrate supply and demand, and they also serve a useful incentive function.”
“It’s either a gimmick, or it’s a mess,” said Carl Shapiro, a professor at the University of California, Berkeley, who served in President Barack Obama’s administration.
There are areas where the public and economists agree. The public backs Harris’s proposal to cap insulin prices at $35. So do 64% of economists.
“I do not favor a general price cap on drugs,” said Kenneth Judd, an economist at the conservative Hoover Institution who studies imperfect competition, among other topics. Insulin, however, is an exception, he said. “Insulin is a very important drug, it has been around for many decades with great success, and there was no justification for the recent price increases.”
Both voters and economists disapprove of Harris’s proposal to tackle the housing-affordability crisis by giving first-time home buyers $25,000 toward a down payment. Economists think such a move would fuel demand for homes without addressing the low supply, helping a small subset of Americans while potentially making housing more expensive for everyone else.
A few of the candidates’ proposals are supported by most economists. These include Harris’s plan to provide a $6,000 tax credit to families with newborns, and to reverse Trump’s corporate tax cuts partially by increasing the tax rate on corporations to 28% from 21%.
“We cannot keep cutting taxes forever,” said David Autor, an economist at the Massachusetts Institute of Technology. “Taxes may be too high on some things, but they are too low on average.”
The irony of the 2024 campaign is that both presidential candidates majored in economics as undergraduates. Trump in 1968 received a bachelor of science in the field from the University of Pennsylvania. Harris in 1986 received a bachelor of arts in political science and economics from Howard University, where she headed the economics society.
Glaeser, the Harvard economist, said it should come as no surprise that politicians offer up proposals that the public likes, even if they might know the economics are dubious. Maskin argued that Trump’s tendency to offer simple-sounding solutions to complex problems—a hallmark of populism—encourages his rivals to do the same.
Some see the gulf between voters and economists on policy as an example of the public’s deepening distrust of experts and institutions. “The American public, they’re unhappy with stuff,” said Shapiro.