Beware of framing effects
In a recent post I discussed how the government was extorting money from big bankers. Many commenters thought I was sympathizing with bankers, or implying they had not violated laws. Actually, I assume bankers do violate lots of laws, as do all big businesses. It’s impossible to operate a big business in America without violating some of the more than 1,000,000 government regulations at the federal level alone (and no, that number is not hyperbole.)
I think part of the problem is that in America we’ve developed the view that “victims” are not bad people. God help anyone who “blames the victims.” Actually victims are like everyone else, some good and some bad. Indeed victims are probably slightly worse than average, as people who behave poorly are often easier to victimize.
Noah Smith has a post that I think illustrates the problem with framing effects. Here’s an excerpt:
There’s a strong instinct to abdicate that responsibility – to look at things like global warming, poverty, environmental destruction, human misery in all its forms and say “God will take care of that.” For some people it’s not God, but “the free market”, or “evolution”, or “history”. But even if you believe in those things, you don’t really know that they’ll make everything right, any more than God knows whether a hidden SuperGod is guiding all of His actions.
The truth is, whether you like it or not, it’s all on you. The responsibility for those weaker than yourself is not on God’s or the free market’s or history’s or evolution’s head, it’s on your head. So think hard about what you’re going to do with all your power.
You might be fooled by framing effects into assuming that Noah is making a political point. More specifically, a liberal political point. But read the passage again and replace free market, evolution and history with “government.” Notice that the meaning is essentially the same. He’s actually making a claim about personal responsibility.
I implore readers to try to look past framing effects when reading my posts. Hopefully it will allow us to avoid fruitless debates in the comment section.
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17. November 2013 at 08:25
noah. heh.
the more someone is striving to help themselves, the greater our obligation to help them.
when noah admits GI / CYB is correct (miles has already nodded to it), we’ll know noah is serious in his godly endeavor.
17. November 2013 at 08:35
Speaking of framing effects…
a) So why doesn’t Noah mention government? Does he consider voting every four years personal responsibility?
b) Isn’t “free markets” about personal responsibility more than anything? Isn’t free markets just another way of saying that people and groups of people have the freedom to take on societal problems as they see fit?
17. November 2013 at 08:55
It is a reasonable request, and I shall oblige (and in so doing accept my personal responsibility).
However, I often find that in response to a ‘failure to communicate’ it is often most productive to look inward. Perhaps speak/write more precisely to convey the message you want your audience to take? Especially when discussing such emotionally charged issues?
My heavens, you have been victimized by Framing Effects!! So maybe you would do well to blame yourself just a little.
17. November 2013 at 09:07
Dustin, In the post in question I wrote the following:
“Most people react to this type of story that an emotional level; either the banks deserve what they’re getting (liberals) or they’re being treated unfairly (conservatives.) Let’s try to rise above emotions and look at this from a public policy perspective. I see two other issues here:”
Wouldn’t you say that represents an attempt on my part to steer people toward the real issues, and away from a fruitless discussion of whether bankers are or are not bad guys? If not, can you explain why?
17. November 2013 at 09:09
Agree agree agree wholeheartedly. Getting caught up in framing instead of arguing the point seems to be a weakness lots of people have.
17. November 2013 at 09:33
I love this statement, it is all one can ask for – “Most people react to this type of story that an emotional level; either the banks deserve what they’re getting (liberals) or they’re being treated unfairly (conservatives.) Let’s try to rise above emotions and look at this from a public policy perspective.”
Honestly, though, the narrative of the post was quite a different tone. Phrases like “if a government extorts money” or “this allows President Obama to raise taxes on banks without congressional approval” are very emotional, or at the least elicit great emotion in the reader. The thesis could have been presented in a more neutral tone is all!!
To be clear I thought it was, among many others, a good blog post. I don’t comment much (mostly I have only an abundance of questions as I try to keep up), so here’s to hoping my being slightly critical doesn’t come off as sniping from the sidelines.
17. November 2013 at 11:33
Dustin, Good point, but there is a trade-off. If I am so careful that there is no misunderstanding at all, then the posts will have to be written in a very boring style.
17. November 2013 at 11:58
Good catch, Scott. I have to wait before blogging about Noah’s post, because right now my comments would not be Christian.
17. November 2013 at 12:12
“But read the passage again and replace free market, evolution and history with “government.”
You left out God.
17. November 2013 at 12:13
Is this just an example of “the government giveth and the government taketh away”?
Would the big banks exist in their current form if not for the implicit backing of the federal government? To the extent that JPM owes its current existence to our policy of bailing out systematically important institutions, it is hard to too upset with the government arbitrarily extracting another pound of flesh.
I think a big part of the reason we wind up with regulatory “solutions” like Dodd-Frank is because the big banks prefer them to a more simple, straightforward solution like much higher equity requirements.
It’s sort of analogous to the FDA and the big pharma. Big pharma companies may not like having to comply with the FDA’s onerous regulatory requirements, but they absolutely like that it’s virtually impossible for anyone outside of big pharma can do it.
17. November 2013 at 12:18
[…] Scott Sumner links to–and points out the central problem with–a recent Noah Smith post. I can’t summarize it; here’s an excerpt that captures its spirit: […]
17. November 2013 at 12:34
Bob, Just to be clear, I have no problem with his post.
17. November 2013 at 12:37
Michael, Two problems with your comment. You seem to assume that taxes are absorbed by businesses, not passed on to consumers.
Also, the fact that businesses might prefer to be treated in a certain way doesn’t tell us anything about whether it is good public policy.
You need to stop thinking in emotional terms and start thinking logically. It doesn’t matter what the banks “deserve”, that’s a concept with no relevance for public policy economics.
17. November 2013 at 12:58
If you believe that central banking is “more efficient” or “superior”, or “better” than a purely self-responsibility driven world, i.e. anarchism, or anarcho-capitalism, where individuals live and die on the consequences of their own behaviors, then you are really no pro-self-responsibility. You actually don’t want the individual to be responsible. You want another person, or a group of people, to be “responsible on behalf of all other individuals.”
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“I think part of the problem is that in America we’ve developed the view that “victims” are not bad people. God help anyone who “blames the victims.” Actually victims are like everyone else, some good and some bad. Indeed victims are probably slightly worse than average, as people who behave poorly are often easier to victimize.”
Communists and criminals of all stripes would be very happy to hear you say that.
17. November 2013 at 19:06
Let’s just make sure everyone that:
1. what the banks deserve is: SH*T
2. What the optimal slice of deal making, placing capital is: SH*T
The only thing Scott doesn’t get, largely bc he has no grip on tech, is that entrepreneurs can’t be replicated (harder than chess), and money placers can be (easier than checkers).
Either way, altho morality is a bad reason: Wall Street is Europe. Dead, dying, and nearly worthless to the future.
17. November 2013 at 19:12
Scott, ask yourself who is the ATM?
Entrepreneurs stand before a machine and take some money out, some machine charge a higher vig than others – this is how they cover costs of “fraud” for being sh*tty at deciding who to hand money too.
There is no “robot” ATM entrepreneur for bankers to put money into.
Bankers are the piss boy.
Bankers are being made worthless.
Entrepreneurs are now finaly grabbing a larger piece of pie.
We’ll spend the next 50 years watching TOO MUCH money chase TOO FEW ubermen – let’s be glad one of Scott’s assumptions has been proven wrong.
17. November 2013 at 19:14
Scott,
I agree on both points – I hadn’t thought about the tax issue.
The issue of “good public policy” vs. “how businesses want to be treated” is an interesting one. They are not the same, but big businesses spend a lot of money to try to push public policy towards the latter.
I’d like to see an amendment to Dodd-Frank that says: this law applies only to institutions that are funded predominantly by debt.
17. November 2013 at 19:48
“I implore readers to try to look past framing effects when reading my posts.” You can help by framing your points in as many different ways as you can.
17. November 2013 at 19:58
“So think hard about what you’re going to do with all your power.” But I won’t think *too* hard, because, really, I have very little power””certainly little compared to what it would take to *solve* the “problems” of “global warming, poverty, environmental destruction, [and] human misery in all its forms.” (And, of course, there are many other issues””mostly of a more local, less grandiose nature–that ought to, and do, concern me.)
18. November 2013 at 08:01
Morgan, I’m not sure anyone deserves anything.
Michael, It’s the difference between being pro-business and pro-market.
Philo, Good point.