Peter Schiff and the Daily Show: The trouble is, graphs don’t win arguments.

Anyone can read the news to you; The Daily Show promises to feel the news at you.

I thought Jon Stewart was heroic when he took on Paul Begala and Tucker Carlson on Crossfire, exposing media theater and the uncomfortable truth that news organizations essentially take cues on integrity from Comedy Central. I bought it for a long time that Stewart’s The Daily Show was almost an acceptable substitute for cable news. Well, we all got a cold splash of reality last week, when Jon proved to us that his show is really is only comedy, and properly scheduled after puppets making crank phone calls.

Last week, the producers of The Daily Show defamed one of my intellectual heroes, Peter Schiff. Many libertarians criticized Schiff for walking into an obvious trap, but I can understand why Schiff took the bait. He personally appeared on the show in 2009 to speak with host Jon Stewart after having correctly predicted the 2007 financial meltdown. Stewart treated Schiff respectfully, and Schiff won the audience’s approval:

I imagine Schiff was expecting similar respect and thoughtfulness this time around. What he received instead was the following hatchet job, led by comedian Samantha Bee:

You can see the full clip at The Daily Show’s website. Schiff suggested after the cut-off above that the work of the “mentally retarded” might be worth $2.00/hr, and he is catching a lot of flak for that across the Internet. Peter Schiff responded to the blowback on his web site:

Of the more than four hours of taped discussion I conducted, the producers chose to only use about 75 seconds of my comments. Of those, my use of the words “mentally retarded” (when Samantha Bee asked me who might be willing to work for $2 per hour – a figure she suggested) has come to define the entire interview. … When asked the $2 per hour question, I responded that very few individuals would take a job at that pay, even if it were legal. In a free market, businesses compete for customers by keeping prices down, and for labor by keeping wages up. Any employer offering even low-skilled workers just $2 per hour would be outbid by others offering to pay more. … However I did suggest two groups of people who might be willing to work for $2 per hour. The first group — which was edited out — was the unpaid interns who tend to value work experience and connections more than pay. (In fact, “The Daily Show” staffer who booked me, and who was present during the interview, had been thrilled to start there as an unpaid intern). Since many interns work for free, $2 per hour would be an improvement.

Minimum wage supporters are now starting to respond to Schiff’s self-defense by … lambasting him further on his use of the word “retarded”. The word “intern” does not appear at all in this Huffington Post response. This post from Americans Against the Tea Party used the word once, but chose not to elaborate on Schiff’s comments thereupon. Raw Story took the cake with this lapse of attention:

Mr. Schiff then went on to further clarify that there were were two groups who would probably be happy to work for $2 an hour: the more appropriately named ” intellectually disabled”  and  “…unpaid interns who tend to value work experience and connections more than pay. ” He then pointed out that the Daily Show staffer who booked him for the show and attended the interview had  “… been thrilled to start there as an unpaid intern.”

Turning back to the “intellectually disabled”, Mr. Schiff added …

What? Will any progressives out there step up to the plate and agree that interns should earn more than $0.00/hr? Why is it that when Peter suggests that the mentally challenged might accept work at $2.00/hr, that’s a national outrage, but when Peter suggests that college graduates should be paid more than $0.00, that’s a total non-story to sweep under the rug? Of course, obviously, never mind Schiff’s explanation of the marginal revenue productivity theory of wages, under which employers bid up wages on the job market commensurate with the value the employers expect to receive from the labor. I’ve haven’t seen reference to that on any progressive site, and I expect never to see one for a million years. Which brings me to the title point: Economics doesn’t win arguments. Graphs, charts, and theories don’t win arguments. If you put a guy in front of a camera and have him explain how he has to support five siblings, that wins an argument. ¡Viva el intervención! Graphs and economic theories? Not so.

Case in point, the Econ 101 graph that the Daily Show used to ridicule Peter Schiff’s economic arguments:

Notice something awry?

Notice something awry?

As you can see, the masterminds behind the Daily Show hatchet job either failed Econ 101 or never had it. The supply curve should go up. The demand curve should go down. Some of Peter Schiff’s supporters had a laugh at this economic faux pas:

Ah. That's better.

Ah. That’s better.

The pirated YouTube version of the Daily Show segment above still carries the error. Catch it while it lasts, but if you look at the video now up on The Daily Show‘s website, you might think that, somewhere over the last two days, a space-time anomaly has thrust us all into an alternate reality in which the Daily Show producers now recall the first two weeks of Econ 101. Well, either that or they quietly corrected their error to cover their ignorance. Either way, their argument remains unaffected. In the original graph, heads rolled down the supply curve. In the corrected version, heads roll down the demand curve. The heads roll either way. The economic argument simply doesn’t matter. If you put a guy on camera and have him explain how he has five siblings to support, that matters. ¡Viva el intervención!

My friend and guru, Nik, was right about libertarians and emotions. Economic arguments don’t win. Libertarians and the advocates of markets have to argue emotions. Here is an example from a bit ago. Jeffery Tucker of the Ludwig von Mises Institute told this tearful story about his mentally challenged coworker, Tad. Stories like this are necessary, though as we shall see, certainly not sufficient, for winning converts:

Mr. Tucker explains, through his own “personal experience goggles” about how a mentally challenged co-worker lost his job in the wake of a minimum wage increase. Mr. Tucker used the word “retarded”, so obviously this video will never get anywhere with minimum wage supporters. But even if Mr. Tucker had said “mentally challenged”, I still don’t think the video would have gone all that far. You see, as soon as the supporter of markets starts with the emotional anecdotes, out comes the faux economic truthiness in the form of facially questionable progressive studies. Samantha Bee interviewed a proponent of such studies in her segment. See how that works? Fail Econ 101. Laugh at economics, generally, as a basis for argument. Rely on emotional personal experiences to make the case for minimum wages. Refute free-market personal experiences with faux economic truthiness.

Free market economist Bob Murphy explained deftly why these studies purporting to show that minimum wages don’t increase unemployment are unreliable for the purpose of helping the underprivileged. It shouldn’t be too hard to follow:

Again, even taking the new generation of studies at face value, they overlook a major drawback to the progressive goal: The studies look at the absolute growth in employment, rather than the unemployment rate, among low-skill workers. So even if it’s true that, say, a Burger King franchise will hire roughly the same number of teenagers between now and 2020 as it otherwise would have, it might not be the same group of teenagers getting jobs. Rather, at the $7.25 level there will be lower-skilled applicants cycling through, with a high turnover rate as the store manager tries to find the few decent workers in the bunch. At the higher rate of $10.10 per hour, higher-skilled kids (perhaps those from affluent families who are home from college) will enter the mix in greater numbers. The manager will be pickier on the front end in giving somebody a bite at the apple, and there will be less turnover. (Note that this isn’t merely hypothetical; the studies finding “no effect” often cite “lower job turnover” as an explanation for how the firm responds.) Thus, even taking the studies at face value, it is entirely possible that there are a bunch of people with low skills who now can’t get a job, who otherwise would have been able to. They are merely being displaced by higher skilled workers who otherwise would not have been interested in a position paying so little.

But why follow it? Economics is a joke, not an argument, to The Daily Show‘s producers. There isn’t enough personal experience in an Econ textbook. Better to rely on the gut, as Stephen Colbert would. Anyone can read the news to you. The Daily Show feels the news at you. Check out Stephen Colbert’s segment on Truthiness, and tell me that isn’t what you’re getting at The Daily Show. I can’t find an easily postable video right now, but do enjoy the segment at by clicking the icon below.

Stephen Colbert - Truthiness[3]

I don’t trust books. They’re all fact and no heart. … That’s where the truth comes from, ladies and gentleman: the gut. … Now, somebody’s gonna say that I did look that up, and it’s wrong. Well, Mister, that’s because you looked it up in a book. Next time, try looking it up in your gut. I did. ~Stephen Colbert

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