Public esteem for economists really ought to fall when they read this from Nobel Prize winner Paul Krugman:
When it comes to domestic policy, there are two Barack Obamas.
On one side there’s Barack the Policy Wonk, whose command of the issues — and ability to explain those issues in plain English — is a joy to behold.
But on the other side there’s Barack the Post-Partisan, who searches for common ground where none exists, and whose negotiations with himself lead to policies that are far too weak.
Both Baracks were on display in the president’s press conference earlier this week. First, Mr. Obama offered a crystal-clear explanation of the case for health care reform, and especially of the case for a public option competing with private insurers. “If private insurers say that the marketplace provides the best quality health care, if they tell us that they’re offering a good deal,” he asked, “then why is it that the government, which they say can’t run anything, suddenly is going to drive them out of business? That’s not logical.”
OBVIOUSLY, the reason a "public option" might drive private insurers out of business is not because of its superior efficiency, but because a government-run health care system would get taxpayer subsidies. If it didn't, it's not even clear in what sense it could be a "public option." This is perfectly consistent with "the government not being able to run anything [well]." An incompetent health care program funded by other people's money might be preferable to a high-quality program you have to pay for yourself.
It's one thing for Barack Obama to make this mistake. Politicians are not known either for their ability to grasp economic principles or for their willingness to honestly articulate even what little they do understand. But for Krugman to give this elementary fallacy as an example of how "Obama's command of policy issues - and ability to explain those issues in plain English - is a joy to behold."
If you're an average college-educated reader and you think you see what's wrong with Krugman/Obama's argument, but you doubt whether you're competent to second-guess a Nobelist in economics... well, don't worry, in this case, you are. (Or maybe you should worry.)