Sunday, July 12, 2009

Obama's philosophy of Behavioral Economics

The Obama administration has embraced the assumption that people are hard wired for failure and must be motivated by economic reward, as exemplified by a program which now pays inner city girls for every day that they do not get pregnant.

The ideology, branded as behavioral economics, has been rolled out as a sophisticated and smart method backed by leading psychologists, though critical economists suggest that the theories are founded on a collection of anomalies and don't hold up in the real world.

A friend who grew up in public housing was outraged, stating 'Well, then I suppose I should be paid for every day that I am out of prison.'

I heard the article on NPR and probed around for reference - the NPR audio is available, along with a mix of other sources. Certainly there are supportive media pieces being rolled out.

From the article "Using Psychology To Save You From Yourself":

"Cass Sunstein, President Obama's pick to head the Office of Information and Regulatory Affairs, was a vocal supporter of the program, because it was an economic policy that shaped itself around human psychology. Sunstein is just one of a number of high-level appointees now working in the Obama administration who favors this kind of approach.

All are devotees of behavioral economics — a school of economic thought greatly influenced by psychological research — which argues that the human animal is hard-wired to make errors when it comes to decision-making, and therefore people need a little "nudge" to make decisions that are in their own best interests.

And that is exactly what Obama administration officials plan to do: By taking account of human psychology, they hope to save you from yourself."


NPR on behavioral economics:
http://www.npr.org/templates/story/story.php?storyId=104803094

Wikipedia:
http://en.wikipedia.org/wiki/Behavioral_economics

An article about the program for paying teens to avoid pregnancy - yes, its Fox News, get over it:
http://www.foxnews.com/story/0,2933,529037,00.html

Link to the program itself 'College Bound Sisters' at UNCG School of Nursing:
http://nursing.uncg.edu/cbs/index.html

Time Magazine's very supportive take on behavioral economics:
http://www.time.com/time/magazine/article/0,9171,1889153,00.html

USA Today:
http://content.usatoday.com/communities/theoval/post/2009/04/65813273/1


Wall Street Journal:
http://online.wsj.com/article/SB124570998785138771.html