There is no reason the President's economic understanding might be somehow more advanced than common notions of economic theory held by ordinary citizens. However, the President and perhaps all politicians and famous public figures can no doubt lend credibility to certain misconceptions. The media aid the sanctification of beliefs by providing coverage that makes the believes seem true. We do not ever hear of any of the big media raising doubts about the naivete of Presidential understandings and it seems that reporters hold some of the same misconceptions. How would reporters know how to critique economic understanding if they themselves remain rather primitive in their thinking, particularly considering that the form of economic conceptions and misconceptions operates at a subconscious level? Since they take for granted that Presidential understandings are true and only policies lead to disagreement, policies are not anchored in advanced economic understanding. As a result, policies are not challenged from the point of view of an advanced understanding of economic science, only from the common sense policy point of view, and any misconceptions that lie hidden and embedded in policy talk remain hidden and unconsidered. The overt policy choices then become the sum total of the reporting and analysis, choices that appear to be decidable only on the basis of which political party one belongs to.
Economist can recognize how this naive public dicussion comes to be led by the President and prominent politicans who easily obtain widespread media coverage. Not only do economists see this myth making at work in the media coverage of politicians, some are also aware that this has occurred at all times in history. For example, Don Bourdreaux wrote a Dear Washington Times: Rhetoric of 'Doom' letter citing H.L. Mencken:
…President-elect Obama predicts doom if a new 'stimulus' plan isn't enacted… Alas, Mr. Obama is simply following his profession's code of conduct. What H.L. Mencken astutely observed back in 1918 is no less real in 2009: "Civilization, in fact, grows more maudlin and hysterical; especially under democracy it tends to degenerate into a mere combat of crazes; the whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary." (H.L. Mencken, In Defense of Women, New York: Knopf, 1918), p. 53.)
So, we seem to have a public policy myth making process that appears necessary, at least to the politician, for the public support and political success of a government program. The process draws not on economic science but on economic misconceptions that are held by the politicians and the media. Since the vast majority of citizens have no possible intellectual ability to recognize this myth making process but themselves use misconceptions in their own economic reasoning, it takes little to sell a massive government program such as the stimulus package. Since among the tiny percentage of the population that are economists, if some of those scientists disagree, it is easy for the politicians to imply there is widespread agreement among scientists. Who would ever know there is not since the media certainly are not interested and don't seek out those who disagree. How would an obscure economists ever make the news? The relationship is so asymetrical the politicians and media can ignore it.
However, perhaps there is some hope from one of the media, the blogosphere, in which serious disagreements do get a hearing. Some economists are concerned about the public's economic misconceptions since increasingly areas of private activity become taken over by government and pushed into the sphere of public policy. Not only is the difference in coverage between advanced economic thought and the politicans' notions asymetrical, the process of increasing government take-over of private activities seems to be a one way process that is supported by the myth-making process.
