I’m reminded of one political consequence of nudge theory, specifically when Thaler’s associate and nudge theory exponent Cass Sunstein was hired by Obama to design economic policy during the Recession. There’s little documentation online on how much influence Sunstein had on the big stimulus package itself, but he did head an influential bureau called the Office of Information Regulatory Affairs.
What is known (primarily from Michael Greenwald’s book “The New New Deal”) is that nudge theory was used to shape the design of a key payroll tax credit. Rather than just send out checks as Bush the Younger did (and as Trump and Biden would later do), the credit would automatically appear in workers’ bank balances, without being a visible line item in some cases. This sudden bump would in theory get people spending. Of course, not many people knew about it, particularly the unbanked, hence why Trump and Biden staked their reputations on checks. It might have even been part of why Obama’s party lost their lower house majority in 2010.
Another problem of nudges for net CO2 emission reduction (to take the biggest environmental problem), without an actual tax on net emissions working through to general equilibrium, it not even knowable which nudges are positive or not.
I’m reminded of one political consequence of nudge theory, specifically when Thaler’s associate and nudge theory exponent Cass Sunstein was hired by Obama to design economic policy during the Recession. There’s little documentation online on how much influence Sunstein had on the big stimulus package itself, but he did head an influential bureau called the Office of Information Regulatory Affairs.
What is known (primarily from Michael Greenwald’s book “The New New Deal”) is that nudge theory was used to shape the design of a key payroll tax credit. Rather than just send out checks as Bush the Younger did (and as Trump and Biden would later do), the credit would automatically appear in workers’ bank balances, without being a visible line item in some cases. This sudden bump would in theory get people spending. Of course, not many people knew about it, particularly the unbanked, hence why Trump and Biden staked their reputations on checks. It might have even been part of why Obama’s party lost their lower house majority in 2010.
Supporting documentation: https://www.nytimes.com/2010/10/19/us/politics/19taxes.html
https://democracyjournal.org/arguments/keep-it-simple-and-take-credit/
https://prospect.org/day-one-agenda/oira-reclaiming-the-deep-state/
The fact N-U-D-G-E-T-0
O-G-O doesn't event scan to the song properly make some hate you more.
Another problem of nudges for net CO2 emission reduction (to take the biggest environmental problem), without an actual tax on net emissions working through to general equilibrium, it not even knowable which nudges are positive or not.