Democratic Senator Claire McCaskill was on the front page of the KC Star yesterday after her heated remarks proposing limits on compensation for investment banking executives:
Sen. Claire McCaskill — steaming mad and not going to take it anymore — on Friday called Wall Street executives “idiots” and proposed limits on some of their salaries.
Her proposal would force companies taking federal bailout money to limit compensation for any employee to what the president of the United States currently earns: $400,000 a year.
My initial reaction was to wonder why Congress critters continue to receive six-figure salaries and generous benefits when the federal budget has been in the red for all but four years since 1970 and the national debt has quadrupled (in real terms) over the same period of time.
My intention here, though, is not to discuss the potential merits of quasi-nationalizing various industries. It is to point out that if (or as) demographic trends depress national average IQ going forward, expect to hear similar calls from elected US officials more frequently in the future.
Latin America provides a few examples of this. In Mexico, the right-leaning PAN party supports industry privatization in opposition to the PRD, which favors more nationalization along the lines of leftist governments in other Latin American countries like Venezuela and Bolivia. As Andrew Gelman demonstrates, in these countries supporters of leftist parties are on average less affluent than supporters of rightist parties are. Thus it is no great leap to conclude that the electorate supporting government control of private business tends to be less intelligent than the electorate opposing such nationalization, at least to our south.
What about in the US? The GSS suggests the same applies stateside. The average IQ, arrived at by converting the mean Wordsum score of whites to an IQ of 100 with a standard deviation of 15, for those who responded in the following ways to the question of what the government’s role should be in banking and insurance:
|N = 683||IQ|
|Gov’t should own||91.2|
|Gov’t should set prices||100.2|
|Gov’t should stay out||100.8|
For Leviathan’s role in the steel industry:
|N = 685||IQ|
|Gov’t should own||91.8|
|Gov’t should set prices||98.6|
|Gov’t should stay out||101.2|
Inexplicably, for 1985, the year in which an auto variation of the regulation question was asked, Wordsum scores were not obtained. So average years of education are used instead as a proxy for the government’s role in the auto industry:
|N = 606||Educ|
|Gov’t should own||9.71|
|Gov’t should set prices||11.67|
|Gov’t should stay out||13.44|
In each of the three response pools, the percentage of people saying the government should control the respective industry is small, on the order of 3% to 5%. When it comes to financial services, the intelligence gap is minor. For manufacturing industries, it is more distinct. But the trend is consistent–duller people are more likely to favor government intervention into private industry than more intelligent people are.
Libertarians who support open borders need to come to grips with the fact that they are stoking the fires of government intervention into the economy.
GSS variables used: WORDSUM, EDUC, OWNBANKS, OWNSTEEL, OWNAUTOS