Episode 406: Making Economics Sexy

Sep 28, 2012
Originally published on October 3, 2012 12:17 pm

Earlier this year, we created a presidential candidate. A fake candidate, sure. But a candidate with real ideas — ideas embraced by economists across the political spectrum, and rejected by every politician who wants to get elected.

Getting rid of the mortgage-interest tax deduction. Eliminating corporate taxes. Legalizing marijuana.

On the show today, we bring in real political consultants to help us plan a campaign for our fake candidate. Our goal: Sell our candidate to America by making economics sexy.

Download the Planet Money iPhone App. Music: Justin Timberlake and Timberland's "Sexyback." Find us: Twitter/ Facebook/ Spotify/ Tumblr

Copyright 2018 NPR. To see more, visit http://www.npr.org/.


We here at PLANET MONEY came up with something. I'm just going to say it - it was a brilliant idea.


It was your idea, to be clear.

SMITH: Yeah. Like I said, it's a brilliant idea. We created a presidential candidate.


UNIDENTIFIED ACTOR: (As Fake Presidential Candidate) Thank you. Thank you. Thank you.

SMITH: OK. It was a fake presidential candidate - that's an actor - but a fake presidential candidate with real ideas, with a real plan.

BLUMBERG: A real plan that was agreed on by real economists from across the political spectrum - liberal, conservative. We asked them, what should our PLANET MONEY candidate be talking about? What great economic ideas are out there that you all can agree on?

SMITH: We've done two shows on this so far. And if you've heard them, you know it actually worked. We got economists to agree on six ways to improve the economy, six no-brainer ideas that the real presidential candidates are not talking about. Things like a total restructuring of our tax system, eliminating deductions, even legalizing marijuana. Hello and welcome to PLANET MONEY. I'm Robert Smith.

BLUMBERG: And I'm Alex Blumberg. Today on our show, we are going to give our fake candidate a very real campaign. We're bringing in real consultants to figure out, how do we get those no-brainer economic ideas out into the American public? In other words, how do we make economics sexy?


BLUMBERG: So we knew from the beginning, our economists ideas - they may be economic no-brainers but they're not political no-brainers. They have some political problems, these ideas. They're a tough sell. But politicians have stupid ideas all the time. They sell those. And so we figured, obviously, what we need - political experts, consultants - people who know how to sell a message to the American people.

SMITH: We went out. We went hunting for these consultants, and we found two of the best in the business. First, Hank Sheinkopf. He's been doing this for 40 years. He's worked on the campaigns of people you've heard of, a lot of Democrats - Bill Clinton, Eliot Spitzer - before the scandal, good years - even Michael Bloomberg, Republican-turned-independent, former Democrat, mayor of New York.

BLUMBERG: And on the other side of the aisle, Republican consultant Kim Alfano. She has 20 years' experience working with presidential candidates like Fred Thompson, also Mitch Daniels, the governor of Indiana, and Lamar Alexander, a senator from Tennessee.

SMITH: So we had them come in, and we showed them our fake candidate and our list of ideas. And we told them, OK, be brutally honest.

KIM ALFANO: You have a radical plan which will bankrupt families.

HANK SHEINKOPF: A lot of these things can't be sold.

ALFANO: You're just too dangerous. You're insane.

SHEINKOPF: I think you should move to another country. That'd be good.

SMITH: (Laughter) Canada, perhaps?

SHEINKOPF: Not even Canada. I mean, that's - some of this won't fly in Canada.

SMITH: And after they finished laughing at us, they said, sure, we can help you sell this stuff. No problem. Piece of cake.

BLUMBERG: Hank Sheinkopf says this is what consultants do all the time. Some policy expert or economist is working for a candidate, comes up with some wonky plan, perfectly logical, lots of charts and graphs. And Hank, he's the one who has to look the candidate in the eye and say...

SHEINKOPF: Nobody makes rational decisions in public life when they vote. Voting is an irrational act. Choices are generally rational. Based upon the data, we know that people do not vote from their heads, they vote from their stomachs and their hearts. Give them some emotional context, emotional sense, so they can create a contextual argument for themselves.

SMITH: So we put a challenge to our political guru. We're going to go through our candidate's six big ideas, and he's going to try and find the emotional core.

BLUMBERG: Which, obviously when you think economics, emotional core is the first thing that comes to mind.

SMITH: It has a lot of heart.

BLUMBERG: (Laughter) Right. So our first plank - one that almost every economist on our panel immediately jumped on, said you need to get rid of this enormous deduction, the largest tax deduction out there.

UNIDENTIFIED MAN #1: One that, you know, I think just defies, you know, common sense the way we have it is the mortgage interest deduction.

ALFANO: The mortgage interest deduction.

LUIGI ZINGALES: Mortgage interest is actually a extremely regressive form of taxation, extremely perverse.

SMITH: Our economists could not hate this deduction more. If you can write your mortgage payments off your taxes, the government loses a ton of money. It ends up overinflating the prices of homes everywhere. Most of the benefits go to homeowners who do not need the benefit because they're rich, they're wealthy, they have these huge homes, giant mortgages. Let's not even get into the homebuilding industry and the bubble and everything that happened...

BLUMBERG: Mortgage bankers who love this, and a lot of it goes to them as well.

SMITH: So here's the way our fake candidate pitched it.

UNIDENTIFIED ACTOR: (As Fake Presidential Candidate) That's why, when I'm elected president of the United States, I have a special plan for the middle class. All of you Americans who own your own homes - I promise to raise your tax bill by thousands of dollars a year.


SMITH: I love the way that trails off - tumbleweeds.

BLUMBERG: Yes. Exactly. Hank Sheinkopf was not thrilled with this idea, either, especially this presentation. But he did think he saw a way, an emotional opening, a way you could pitch this idea that would play on sort of a class-warfare angle that would play on the anxieties over the rich and the poor, the haves and the have-nots.

SMITH: And we should note here that Hank did not have any advance time to think about our candidate, to think about our platform. We just sat him down. He did not script anything. But Hank Sheinkopf has this amazing gift.

BLUMBERG: Amazing.

SMITH: He goes into, like, this trance, almost. And he looks off into the distance and then bam - fully-formed political messages just come out of his mouth. He thinks in commercials.

SHEINKOPF: Let's see. A bold - if I were writing a 30-second spot - a bold economic plan to protect America's future. Get rid of deductions for the rich. Make sure the rich can't take advantage of the system anymore. Make it fair. Tax deduction for home ownership, not - tax deduction for home ownership takes millions of dollars away from people who need, reduces services, takes money away from the places we need to spend it, from education, from health care for our children, for our future. One thing to do - reform the tax system. That's that.

SMITH: Reform. Yeah. Reform's a great word.

SHEINKOPF: Yeah. Yeah. Yes.

SMITH: That feels positive.

SHEINKOPF: People love reform.

SMITH: And I notice you don't say anything about personal sacrifice. You don't say, hey, you're taking advantage of the system.

SHEINKOPF: No one likes to give up anything. The first thing you don't ask people to do, except in time of war, is to make collective sacrifice.

BLUMBERG: So eliminating the mortgage interest deduction, the way our economists put it, in Hank Sheinkopf's world, becomes fair tax reform for our children. I can see the bumper sticker now.

SMITH: Good 'cause these are about to get more difficult for Hank. The next idea we ran by him, plank number two, is a wee bit more complicated.

BLUMBERG: Yes. OK. So the PLANET MONEY candidate is proposing the elimination of a deduction you might not even know you have. The U.S. government doesn't tax health benefits you get from your employer. So you get your salary. Let's say you get $50,000 in salary, and you get another $25,000 in health benefits. They tax your salary but they don't tax your health benefits. And while this sounds like a good thing, our economists were pretty clear it ends up distorting the whole system. And they think we should tax the health benefits as well.

SMITH: Yeah. I got to say, (laughter) as you were saying this to our consultants, they were totally confused. Like, you could see their mind drift away...


SMITH: ...As many of our listeners did as you started to explain it. It's really complicated because you have to explain this whole deduction that people don't know about. And then, after they fully understand why it's there, say, no, no, we want to take that away. And, you know, in the end analysis, we just gave up trying to explain this.

BLUMBERG: Maybe we keep number two sort of a secret.

SHEINKOPF: I think number two should be kept a secret for many years. There's this underground vault. I think you should put it there and never take it out again.

SMITH: Right.


BLUMBERG: All right, number three.

SMITH: Number three is what political consultants live for. It's a big, honking tax cut, which should be easy for a candidate to pitch, right? Except the tax cut isn't going to a hardworking middle-class worker or even to a rich guy who might create jobs. This tax cut is going to a faceless corporate entity.


UNIDENTIFIED ACTOR: (As Fake Presidential Candidate) My opponent, Barack Obama, has proposed lowering the corporate tax rate to 28 percent. Mitt Romney suggested 25 percent. I say, read my lips - no taxes for corporations. Zero. Nada. Nothing.

BLUMBERG: So economists everywhere have sort of a basic creed. And it goes like this - if you tax something, you will get less of the thing you're taxing. So if you eliminate a tax on something, you are going to get more of that something. So when a corporation makes a profit, it either invests it or it creates more jobs with it. So why tax something that can lead to investment and create more jobs? Even our liberal economists said, in a blue-sky world, yeah, get rid of the corporate income tax. If you want to tax rich people then tax rich people. Don't go after the corporations.

SMITH: OK. So Hank Sheinkopf gets into his trance state again, channeling a possible message. This one's a little tougher.

SHEINKOPF: We're eliminating the corporate tax?

SMITH: Oh, yeah.


SHEINKOPF: We're eliminating it. OK. You remember this business in blah, blah, wherever it is? It used to employ 300 people. There were good jobs there. And then the government had a plan - tax the corporations. Tax places like this. And the result - hundreds out of work. There's a way to fix this. Make it easier for businesses to stay in business. Reduce the regulation by reducing the taxes on them. And what'll happen? Well, the rich won't get any more, but people like you will sure benefit. How? Well, your jobs will be saved.

BLUMBERG: Would you craft a different message depending on whether our candidate was running as a Democrat or a...

SHEINKOPF: Oh, sure.

BLUMBERG: ...Republican?


BLUMBERG: If it - so what's the...

SHEINKOPF: Sure. The Republican response, the Republican one is, you know how to get the government off our backs? Protect our jobs. Something the government won't do. You know how we do that? My plan - get rid of corporate taxes - no, get rid of the kind of taxes that put small corporations out of business. Why? Because the government doesn't care but I do. I'm going to vote against taxing the profits - no, not the profits - I'm going to vote against excess taxes on companies like blah, blah. Put the name in right here in our state.


SHEINKOPF: And by doing that, I'll protect our jobs. That's my plan. I need your help to make it happen. Thanks.

BLUMBERG: So the economists say eliminate corporate income tax. Hank Sheinkopf - protect our jobs.

SMITH: Protect our jobs. You know, you start to get the feeling, talking to these guys, especially when you challenge them to flip political parties in the span of a second - Republican, you're Democrat, you're Republican - you get the idea that they can spin anything. I mean, Hank can do this in his sleep. You know, oh, don't say corporations. You say companies. Don't say profits. Say jobs. It's not taxes. It's excess taxes. And both these ads, I timed them - 30 seconds exactly, with no script.


It's amazing. And it's not just Hank. We tried the next plank out on our Republican consultant, Kim Alfano. Kim is very different, stylistically, from Hank. He's all emotion and slogans and clever words. She likes to find the big-picture theme before she talks about any of the details.

KIM ALFANO: You're going to have to sell the big enchilada before you start saying that, you know, in this recipe, there's going to be some bitter herbs.

SMITH: So let's see how Kim takes on our next big idea, idea number four. And this one's a very interesting one. It caused a lot of discussion on our blog about how we would pull it off, exactly. Here's the way we had our actor do it.

UNIDENTIFIED ACTOR: (As Fake Presidential Candidate) You're going to like this. Something else I'm proposing - I promise to eliminate all income and payroll taxes.


BLUMBERG: So that's a pretty extreme way to put it, but the logic is the same as with the corporate income tax. We want people to have more income, so why tax their income? You want people to have more of it, you tax it less. So you get rid of the income.

SMITH: Yeah. And there's an obvious question here - where does the government get the money to do the things the government does and that we want them to do? Well, you would move toward a consumption tax.

BLUMBERG: And this is where the debate came in.

SMITH: Because there's a lot of different ways to do it. In Europe, they have a VAT. I'm sure you've seen it if you've been to Europe. They add on, you know, whether it's 15, 20, 25 percent, sometimes to the cost of all goods. That's how they fund governments there. But there's other ways to do a consumption tax. And, in fact, in a future show we will talk about various ways to do that. But in general, the way it works is you tax the things you buy. Tax the things you consume rather than taxing income. And our consultant Kim Alfano, she got it immediately.

ALFANO: Let's just say, look, dude, if you want to smoke cigarettes, if you want to buy a powerboat, if you're incredibly wealthy and you want to buy a jet and you want to have a luxurious life, then you're going to pay for it. If you want to buy milk and bread and you're just trying to get by, well, we're not going to tax those things.

BLUMBERG: And Kim saw this eliminating of income taxes and payroll taxes and moving to a consumption tax as part of this broad overall message that we were trying to send. And so here's her vision for this ad.

ALFANO: It's basically a freedom message. Scrap the tax code. Put the power back into the hands of the people. And give you the power to decide how much you want to be taxed - by how much you choose to buy and purchase. Let's just free ourselves from all this - forgive me - crap that we've put on our backs. And I see a horse.


SMITH: There's going to be a horse in the ad?

ALFANO: I see a horse. I see a guy. I see a crazy, you know, freedom. I see - I don't know. I see a song. I see a jingle. I don't know.

SMITH: So whereas economists want to talk about incentives and consumption taxes, political consultants say all you need is one word - freedom.

BLUMBERG: Now at this point, Robert, you and I were feeling pretty good. Like, presented this way, you could actually imagine these ideas getting through to the average voter.

SMITH: And I know we did this project but I didn't feel it until I heard these guys do some of these ads. When I heard them, I went, you know, maybe we can sell this thing.

BLUMBERG: But then our consultants reminded us, you guys are forgetting something - opponents.

SMITH: Yeah.

BLUMBERG: Opponents will be running lots of ads against your ideas - negative ads.

SMITH: And it turns out, the genius that is Hank Sheinkopf can also channel a negative ad, in fact, even more quickly than he can make a positive ad. So, for instance, idea number five on our candidate platform was a carbon tax. This is extra taxes on gasoline and other polluting stuff, same logic we've used all along. Pollution is bad, so you tax it, right? Make it go away.

Now, a positive ad is easy. You have kids, you have trees, clean air, you know, blah, blah, blah, environment, save the earth, that kind of thing. But Hank imagined, for a moment, how much money the oil companies would throw against this proposal and what kind of ad they could put on the air. So he said this - I picture a motorist gassing up a car. And then all of a sudden, the dial on the gas gauge, it just starts going higher and higher, spinning out of control.

SHEINKOPF: So the thing blows up, OK. That's what's going to happen if they get their way. They're going to tax our gas and make it impossible for us to get to work. Do you think that's fair? Well, they want to take our freedom away, too. Not so good. Charge you more. Take your freedom. That's what they're really talking about when they say tax carbon emissions. Do you think that's what America was made for? And then you show the Founding Fathers or some nonsensical patriotic thing. Don't let them take your freedom.

SMITH: Alex, we're bad people (laughter).

BLUMBERG: We're taking people's freedom...

SMITH: I know.

BLUMBERG: ...Again. So this is the problem - the consultant can give, the consultant can take away. A consumption tax can equal freedom, but a carbon tax, which is not far away from a consumption tax...

SMITH: Can equal slavery.

BLUMBERG: ...Can equal slavery, exactly. What was most striking though about this conversation with the political consultants was how little actual overlap there was between what they said and what our economists said. It was such a joy to talk with, like, a lot of these brilliant economists and have them lay out all these logical arguments that the - sort of the pure logical beauty of it is very enticing. But the consultants, they were talking about the same six policies. They were like, toss everything the economists said out. And they would come up with a completely different rationale for selling the idea.

SMITH: Yeah. The most striking one was our final idea for the Planet Money candidate, plank number six, legalizing marijuana. And if you've ever talked to an economist about this, you know that they favor it for a bunch of reasons. I mean, first of all, when it's not legal it means you can't tax it, right? It robs the government of potential revenue. Also, if it's not legal, it tends to drive up the price, which just makes drug dealers richer. It allows them to spend more money on weapons, kidnapping, bodyguards, body armor. And all of this just escalates violence.

BLUMBERG: Hank said, yeah, none of that. None of that's going in the ad.


BLUMBERG: And then he invented, on the spot, an entirely different rationale for why you would want to legalize marijuana. And it's not at all about the economics or the violence. It's about health and, of course, the children. And the person you need in the ad is not a border agent or an economist or a drug dealer behind bars. It's a doctor in a white coat.

SHEINKOPF: And say I'm Dr. So-And-So and I'm from this hospital. And I've done research for 20 years, and I'm telling you that there's no reason why we shouldn't legalize marijuana so that people who have terminal diseases can use it if they need it. And so that, frankly, we can make sure that poisons aren't put in it that will kill our children. Because after spending billions of dollars to get rid of marijuana, it's like a plague. It's all over the place. And that doesn't mean we're giving up. But it means we want to save our kids from being killed. And this, just this one reefer here, was what they call that has blah, blah, 1,400 chemicals. And that can create all kinds of damage to human beings. So let's legalize it, so we can we can supervise it. And then we'll all be a lot better off.

SMITH: Fourteen-hundred chemicals...


SMITH: ...In his reefer? I don't think that's true.

BLUMBERG: I know, but you just got to go with it.

SMITH: OK. Fine. The slogan, once again - legalize it, so we can supervise it. OK. One major difference between our two consultants though - Hank, he was happy to do this exercise with us, to go issue by issue, to turn each plank of the platform into a 30-second sound bite, find the exact right language, throw in an iconic image, carries the right emotional trigger.

BLUMBERG: But for Kim Alfano, she suggested a much more, shall I say, holistic approach. Take the platform as a whole and don't go plank by plank. Boil the whole thing down, and use it to create a broader narrative. See, the one thing that we don't have, with our fake campaign, that a real campaign does have is an actual person, a human being with an actual biography that you can use to connect with people. You can say, I'm Mitt Romney and this is what I believe, or I'm Barack Obama and here's my family. We don't have that. All we have is our ideas, our politically untenable ideas.

SMITH: But Kim said maybe that's our narrative. Your candidate might be fake, she said, but at least he's honest, right? You can build a campaign around that. Someone who cares enough, someone who is brave enough to say the things that other people won't.

ALFANO: As a candidate, I'm willing to stick my neck out. If I'm going to say these things, I'm risking my political life. So I'm at least being honest. I'm at least not playing politics. So give me some credit for being, you know, somewhat bold in my political, you know, courage here.

BLUMBERG: So it sounds like you're saying to sort of, like, put the craziness of this platform sort of front and center and say...

ALFANO: Sure. Just say listen...

BLUMBERG: ...Look at me, I have this bold...

ALFANO: ...I'm not Republican.

BLUMBERG: ...Crazy plan.

ALFANO: I'm not Democrat. I'm doing this for the good of the country. I'm going to go ahead and step out and say I'm not doing this for political sake. I'm doing this because our country's in a really terrible place, and let's agree that what we have isn't working, and that it's time to put the power squarely in the hands of the people.

SMITH: OK. So we have two directions we can go. We can break this down plank by plank, use emotional language to sell each idea. Or we can go big. Don't sweat the details. Sell the audacity, the freedom, the horse. Crazy 2012.

BLUMBERG: Right. And so we are going to leave that to you to decide - well, a tiny, scientifically-selected, statistically significant group of you to decide. We're going to talk with polling experts, try and run some focus groups and figure out which message sells, which approach will work best.


JUSTIN TIMBERLAKE: You ready? You ready? You ready?

BLUMBERG: That's coming up in future episodes as the Planet Money fake presidential candidate saga continues.

SMITH: Hey, only a month to go, we've got to hurry on this thing. And we would love to hear your ideas, even if you do not make our focus group. Because it's, again, scientifically selected here. Go on to our blog, www.npr.org/money. We would love to hear from you if you have even better bumper sticker ideas for our candidate.

BLUMBERG: You can also find us on Facebook, Twitter, Spotify. I'm Alex Blumberg.

SMITH: And I'm Robert Smith. Thanks for listening.


TIMBALAND: Let me see what you're twerking with.

TIMBERLAKE: Go ahead, be gone with it.

TIMBALAND: Look at those hips.

TIMBERLAKE: Go ahead, be gone with it.

TIMBALAND: You make me smile.

TIMBERLAKE: Go ahead, be gone with it.

TIMBALAND: Go ahead, child.

TIMBERLAKE: Go ahead, be gone with it.

TIMBALAND: Get your sexy on.

TIMBERLAKE: Go ahead, be gone with it.

TIMBALAND: Get your sexy on.

TIMBERLAKE: Go ahead, be gone with it.

TIMBALAND: Get your sexy on.

TIMBERLAKE: Go ahead, be gone with it. Transcript provided by NPR, Copyright NPR.