97. Lying to Ourselves

[0] From APM, American Public Media, and WNYC, this is Freakonomics Radio on Marketplace.

[1] Here's the host of Marketplace, Kai Risdahl.

[2] Time now for a little Freakonomics Radio.

[3] It's that moment every couple of weeks.

[4] We talk to Stephen Dubner, the co -author of the books and the blog of the same name.

[5] It is the hidden side of everything.

[6] Dubner, it's good to have you back.

[7] Kai Risdahl, thank you for having me back.

[8] I know we're all excited about the second presidential debate last night.

[9] Yes.

[10] It was a good one, don't you think?

[11] Interesting.

[12] It was a lot of, I thought, scintillating talk about taxation in particular.

[13] You need to get out more, but okay.

[14] Turn you.

[15] It did get me to thinking, however, about lying.

[16] Now, I don't mean the lying of the sort that each campaign is accusing the other of doing every two seconds.

[17] I mean, Kai, lying to ourselves.

[18] All right.

[19] Go ahead, because I don't know.

[20] I have no idea where you're going.

[21] All right, let me explain.

[22] A couple weeks ago, I saw a poll on Yahoo Finance.

[23] It asked people, it said that France's wealthiest man is.

[24] is talking about leaving the country to avoid high taxes there.

[25] Would you ever leave the U .S., it asked, to avoid high taxation?

[26] Now, about a third of the respondents to this poll said, no, I would never leave.

[27] But everyone else was willing to entertain the idea.

[28] In fact, another third said they would leave the U .S. if taxes were to go higher than even 40%, which isn't really that much of a stretch.

[29] Yeah, from where they are now.

[30] All right, so I'm going to show off here.

[31] You ready?

[32] I'm ready.

[33] All right.

[34] So this is the Laffer curve, right?

[35] Arthur Laffer, the economist, and he said, you know, it in theory shows the point at which high taxes make people stop trying to work hard and make money.

[36] That is the theory.

[37] The Laffer Curve theory is a bit, however, like a unicorn.

[38] We don't really know where that cutoff point is.

[39] Sometimes they may be in California where you live, I think, more real than in some places.

[40] I did ask my economist co -author, Steve Levitt, what he would do if, for instance, he had to pay, let's say, 50, percent in taxes.

[41] All right.

[42] I wouldn't leave the U .S., but I definitely would work less hard.

[43] Maybe not at 50 percent, but at 70 or 80 percent, I would spend a lot more time playing golf and a lot less time trying to make money.

[44] That's for sure.

[45] Oh, please.

[46] First of all, the man has what, four or five children?

[47] How are you going to feed four or five kids making less money?

[48] But you don't believe him.

[49] Yeah, well, here's what I think.

[50] I think he's an economist and he sees this theory, and so he's talking to the theory.

[51] I wouldn't say you're wrong there, But let me also say this.

[52] We lie to ourselves all the time.

[53] We're constantly trying to predict how we're going to behave in the future when something happens, a tax hike, a price change, a presidential election.

[54] And we're almost always wrong.

[55] You take something as simple as driving, okay?

[56] AAA, the American Automobile Association, is constantly surveying drivers.

[57] Say something like, you know, if gas prices stay as high as they are now go up, will you drive less?

[58] And people always say, oh, absolutely, and then you look at the data, and they do not drive less.

[59] Here's Joel Weiksel with AAA.

[60] I think there may be people who lie to themselves or imagine that they're doing something that they're not.

[61] But I think there are also people who maybe forget about things that they've done.

[62] Forget.

[63] He's being very polite and just saying we're lying right off.

[64] That's what he's saying.

[65] It's a synonym.

[66] But I will say this.

[67] I don't believe it's necessarily intentional.

[68] Okay.

[69] One problem with any survey is that the power of suggestion comes into play.

[70] All right.

[71] So, well, let's get it back to the debate then, Dubner, and talk about this idea of polling and people lying to themselves.

[72] Do political polls change behavior, do you think?

[73] Quite possibly.

[74] And also, we're probably just getting a lot of answers that don't reflect reality.

[75] Okay, you think about it.

[76] What every poll relies on is one stranger telling the truth to another stranger about the future.

[77] Okay?

[78] So there are many ways in which that answer can go wrong.

[79] Silver runs the blog 538 .com.

[80] Yeah, we had them on a couple of weeks ago.

[81] He takes all these different political polls and analyzes them and weights them, depending on how good a poll they are.

[82] He says, Nate Silver says it can be hard even to figure out whether a given person will vote at all.

[83] You can ask Americans and say, are you going to vote?

[84] But people lie about that.

[85] Just like they lie about always washing their hands or using condoms or never running a red light or anything else.

[86] I don't even know what to make.

[87] Is hope been lost for being able to do this kind of stuff?

[88] I wouldn't say hope is quite lost, but I will say this.

[89] The cardinal rule should be don't listen to what people say, right?

[90] Watch what they do.

[91] So the next time you hear, you know, a friend of yours say, oh, man, if that guy gets elected president, I am out of here.

[92] I'm moving to Canada.

[93] You go and check back in a year or so, I promise you, the odds are pretty good.

[94] He hasn't budged an inch, kind.

[95] Stephen Dubner, he'll be back in a couple of weeks.

[96] Freakonomics .com is the website.

[97] We'll see you, man, if, you know, if you're still in the country.

[98] Thanks, Guy.

[99] See you.

[100] In our next Freakonomics Radio podcast, it's election time.

[101] You want to know what economists are thinking?

[102] I've almost never actually listened to politicians.

[103] I sometimes read transcripts.

[104] And when I read those transcripts for no matter what the party the person is, I just think, like, I wouldn't give you a C in my economics class.

[105] This is just not acceptable for a person to be saying.

[106] It's just so wrong.

[107] That's coming up on the next Freakonomics Radio podcast.