ROBERT SMITH, HOST:
Hey everyone, Robert Smith here. Last week, we played an episode from a series that we made in 2012, when we created the perfect presidential candidate. He was a fake candidate, but his policy ideas were great, at least according to economists. Today, you will hear us bring our candidate to the people.
Previously on PLANET MONEY, six economists from across the political spectrum...
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DEAN BAKER: Dean Baker, co-director...
RUSS ROBERTS: It's Russ Roberts...
LUIGI ZINGALES: I'm Luigi Zingales.
BAKER: ...Left-of-center, to be fair...
ROBERTS: ...Hardcore free market...
ZINGALES: ...Pro-market but not necessarily pro-business...
SMITH: ...Thrown together with one impossible mission - to come up with an economic plan to rescue the economy. One catch - in order to save the country, they're going to have to work together to restructure the tax code...
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ROBERT FRANK: The corporate income tax makes no sense whatsoever.
SMITH: ...Eliminate charish (ph) deductions...
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BAKER: ...The mortgage interest deduction...
SMITH: ...To preserve the environment...
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KATHERINE BAICKER: ...Tax, energy use or carbon emissions...
SMITH: ..And finally, deal once and for all with the scourge of illegal drugs.
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ROBERTS: Make them legal.
SMITH: And maybe, just maybe, this rag-tag team can come up with a platform that every economist would love and every presidential candidate would hate - except for our fake one.
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DAN PIERCE: (As Fake Presidential Candidate) God bless you, and God bless the United States of America.
CAITLIN KENNEY, HOST:
Hello, and welcome to PLANET MONEY. I'm Caitlin Kenney.
SMITH: And I'm Robert Smith. And, Caitlin, this is it. For six months now, we have been hatching this plan to create a fake presidential candidate based on the best ideas that economics has to offer. We've done PLANET MONEY episodes where we created the platform for a presidential candidate. We hashed out disagreements. We brought in political consultants who laughed at us at first, but then said, no, no, we can help you sell this plan. We have done it all. And today...
KENNEY: We take it to the people.
KENNEY: At least a very carefully selected and screened group of people. We take this to a focus group in D.C. and ask, would anyone vote for these crazy ideas anyway?
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SMITH: In order to see what real people think, you have to go to a very fake place.
KENNEY: We're in Washington, D.C., in this very generic office tower, probably one of the blandest conference rooms you've ever seen.
SMITH: And that's actually intentional because this is where they do the focus groups. And nothing is supposed to be controversial here. It's supposed to be very bland, nothing to distract real voters from their real opinions. You want pure information in this room.
KENNEY: And I got to say, it was pretty sweet. We got to sit behind this two-way mirror looking into the conference room. And we watched as they lead 10 independent voters in. And it was cool because we could see them. We could hear everything they were saying. But they couldn't see us.
MICHAEL GROSS: Well, thanks everybody for coming out. We'll try and keep this...
SMITH: And this is something that you never get to do in real life - listen to a bunch of people talking about you, talking about PLANET MONEY, talking about our economist's ideas. And they have no idea that we're listening to them. I feel like I'm eavesdropping on my friends.
KENNEY: Another thing that's weird is that the people in the focus group, they're in the sterile room, it's really bright. But we're here behind the glass. It's dimly lit. There's some rows of seats. We have free drinks and all you can eat M&Ms. It's kind of like being in a movie theater.
SMITH: Ipsos Public Affairs in Washington, D.C. kindly agreed to let us borrow their focus group for the night. Michael Gross is the moderator. And he told us what to look for. He says you're basically looking for something called resonance, which is not only what people say but what they don't say.
GROSS: Part of the beauty of focus groups and having people, you know, be able to see them is you can see the small little visual and physical cues.
SMITH: Like what?
GROSS: You know, you'll see people, you know, kind of cocking the head, maybe start to start to noddle a little bit, like, you know, they - OK, I get the concept and, yes, I like it.
SMITH: So I should be taking notes on that? I should just be watching for that, or?
GROSS: Yeah, you should be watching for visual cues. Oftentimes you'll see people, you know, if they're not really interested in something, they'll push back from the table a little bit. Or they'll cross their arms in front of them, which means they really don't care about talking about that kind of subject.
KENNEY: We move our chairs up about two inches from the glass so we can catch every facial expression.
SMITH: Yeah. And Julia Clark, who runs the political team at Ipsos, sits next to us. And Michael, the moderator, goes into the room with the focus group and he hands out our plan. So everything we've worked on over the last six months is now a stack of papers. And each page has one idea, one item of the presidential platform on it. And he encourages the focus group to start going through it with a pen. He asks them to cross out what they don't like and circle what they do.
KENNEY: There was a lot of crossing out.
SMITH: There was a lot of crossing out. The first idea's one that our economists from across the political spectrum loved. It's to get rid of the mortgage interest tax deduction. Now if you own a home, you can write off a big chunk of your mortgage on your taxes. Our economists say what this really is, is a huge government subsidy for people who happen to own rather than rent.
KENNEY: Michael read off some of the arguments for eliminating the deduction.
GROSS: The mortgage interest deduction is an extremely regressive form of taxation and is extremely perverse. That we shouldn't be helping Bill Gates or whoever, subsidizing them to get an expensive home. Rich people get a larger subsidy, which causes the price of houses to increase, making homes less affordable for poor people.
SMITH: And what they don't know is those are actual quotes from previous shows that PLANET MONEY has done. But he's just reading them off. And people when they hear this just - they shake their heads, like, they hate everything he's saying. On the left side of the table is a well-dressed older woman. Her name is Irene (ph). We have a briefing book that tells us about all the participants here. And this tells us that she has a high school education. And although it doesn't say it, we can tell the woman owns her own home.
IRENE: Three quarters of your mortgage goes to interest. So if they eliminated that, that deduction, it would be like you're throwing your money out the window every month, you know, if you didn't get that deduction - get something for it.
SMITH: Once people start talking about this, you can pretty much tell who owns a home and who doesn't. Because the homeowners hate this idea for a very simple reason. The amount that they pay in taxes is going to go up, that is inevitable.
And then the moderator explains another argument about eliminating the mortgage interest tax deduction, and it's this - this deduction, this subsidy by the government actually makes the price of homes too high. If you eliminate it, then the price of homes will actually go down. And you can see people just look terrified at this prospect.
KENNEY: Yeah. Marilyn M. (ph), we know from our book that she makes under $25,000 a year. She has some college education. And she seems to sway the group when she speaks. They really listen to her. She hates it.
MARILYN M.: If housing prices go down lower, this is going to be very dangerous, especially for a society that's top-heavy with baby boomers that are aging.
GROSS: You know, there were actually, like, economists that came up with this. I just want to, like, read you a couple of comments...
SMITH: People actually made a sour face when the moderator said the word economist. They had this, like, visceral reaction, like, oh, economists.
KENNEY: And this was something our political consultants warned us about. They were like, listen, no one's going to care that economists designed this plan. People don't particularly like economists. It turns out they were right.
SMITH: Yeah. It gets worse because it turns out it's not just the economists they hate. They hate the very language that the economists used to help sell the plan. Even the words are turning off the voters. There was one young woman, Eva A. (ph), and she jumped in to say that she hated one particular word that she heard - eliminate.
EVA A.: I feel like any time you eliminate something or get rid of it, it's going to backfire in a different area.
SMITH: There's lots of nodding now around the table. Julia from Ipsos, she leans over to us as soon as she hears this. She says, listen, this kind of thing from a focus group participant, this is exactly what the political pros are listening for. If they hear this, they might not want to use the word eliminate.
JULIA CLARK: Those words scare her and they wouldn't want to use those words in a communication because it would be off-putting perhaps to her, perhaps to people from her demographic.
SMITH: Yeah, like, I want to strongly moderate taxes.
CLARK: This is why candidates sound the way they do oftentimes because their statements have been focus grouped to death. And it does mean they modulate their own opinions so strongly to try to line them up with American voters, that some of probably their own true views are lost. I think that's almost certainly the case.
And it's, you know, it's the challenge of focus groups. They're useful, but to what extent do you want to react to them and to what extent do you want to fly in the face of public opinion? I mean, it's a balance for politicians to deal with.
SMITH: It's better to know now than later.
CLARK: Absolutely. Even if you're going to stick to your guns and say something unpopular, at least you know how people are going to react. And that's useful, too.
KENNEY: It's not just the words that people hate that the pros are listening for, they're also listening for the way people describe things, the language that they use. Because what better way to appeal to the average voter than to use something that came out of their own mouth? Julia says that when you see those ads that feature this real person or that real person, some of those people actually came out of focus groups just like this.
SMITH: Yeah. That's what we were kind of hoping for, but at least when it comes to the mortgage interest tax deduction, there were no nice words. We're not going to have that option.
GROSS: OK. So quick show of hands. Like, how many of you would vote for a candidate that had this as part of their economic policy?
STEVE: Without specifics, with no specifics?
IRENE: As written?
GROSS: As written.
MARILYN M.: Absolutely not.
GROSS: No? OK.
SMITH: Nobody raised their hand, nobody in the entire room. Oh, no.
KENNEY: Not a single person. I'm scared. Like number one - they hate it.
SMITH: Yup. No one supports eliminating the mortgage interest tax deduction. Not a single person.
KENNEY: And this was just the start of it. It was a long night. People either hated the plans or they didn't understand them. Sometimes it was both.
SMITH: Yeah. So as the moderator is going through our list of ideas, vote after vote turns against us. The economists had this idea about taxing health benefits, that's rejected almost immediately. Another idea, which was to move away from an income tax to more of a consumption-based tax - kind of like the VAT they have in Europe - that's dismissed as weird and vague, two actual words used by focus group participants.
KENNEY: Another plank in our platform was eliminating the corporate income tax. The economists argued it taxes something we want to encourage - corporations making a profit. We want them to reinvest the money so that they can go out and hire people.
SMITH: Yeah. When people argue that we should have a high corporate income tax, what they're really saying is we want to soak the rich. We want the rich to pay their fair share. And the economists argue just don't do that through corporations. If you want to tax rich people, then tax rich people. Leave the corporations to create jobs. And if they pay out any of their profits to their shareholders and dividends, then you can tax it.
KENNEY: But this idea, it gets Steve (ph) to lean forward. He's sitting at the end of the table. College-educated, middle aged. And he just doesn't buy it.
STEVE: So if you don't tax the companies, then you - where are you going to get the money from? Which is like Kevin said...
SMITH: It is so strange to sit behind the glass and listen to something like this because you want to go in and argue with the guy. Because our economists have thought of this, you know, they've described where the money can come from and you can get it in other places. It's just basically shifting the tax burden in what they would say is a more fair and effective and productive - you know, it doesn't it doesn't matter because I'm not allowed to argue with the guy. And Julia for Ipsos, she says this reaction happens all the time.
CLARK: And you've got a client behind the screen and the message testing is going badly, it's all that you can do to keep that client from marching out of this room into the focus group room and explaining to Joe (ph) from Cincinnati why his position is wrong. Of course, if you have to convince - work that hard to convince someone of your point of view, you've already lost the argument when it comes to communications and messaging. But I've definitely been in this room before with a client who is - has to be restrained, literally, from going around the corner to have a chat with those people in the focus group room.
SMITH: Our moderator saves one particular idea for last. And you can see why he wanted to keep it at the end. So every economist agreed absolutely that we should legalize marijuana. They said making it illegal just drives up the price, makes drug dealers rich. The government gets no tax revenue for it. And yet, the government is on the hook to build prisons to put all those people who smoke pot into the prisons. So they agree that this just economically makes no sense whatsoever.
KENNEY: But the folks at Ipsos, Julia and Michael, they predicted that talking about something like drugs was bound to divide any group. And they were right. People don't calmly think about this issue and consider both sides. They're just either immediately for it or against it.
MARK: You can really go to jail for a small amount of weed. And it's not OK. Marijuana helps a lot of people. It can be social. It can be for recreational use. And, I guess, creative - it makes you creative in some ways if you're artistic.
MARILYN M.: I have enough faith in my own creativity that I don't need to make myself artificial in my brain to be creative. It's in me and I don't need a drug to turn the key. And I don't think anyone else does either, unless you've become dependent on it. But, I mean, that's going off kind of the...
SMITH: That was Mark (ph) and Marilyn. They are never going to agree on this issue. And, in fact, that's true of the entire focus group. When they took the vote, the group is evenly split on legalizing drugs. And in some ways, this was a tiny victory because legalizing drugs did better than just about any other plank on our platform. But you cannot build an entire campaign - one approved by economists - on legalizing pot. It's just not going to work.
KENNEY: But little did they know, we had our secret weapon.
KENNEY: We have been talking for weeks to political consultants, to advertising experts, to the best in the business. And we've said, listen, we know these ideas are going to be a tough sell. What do you got for us? Help us convince people that they would vote for this candidate. So we told the moderator - bring out the ads.
SMITH: OK. Picture a guy in a casual shirt he's talking straight to the camera. He's standing in front of some out of focus foliage. And he's going to talk about the economists' plan. Now our moderator just read out the copy to the focus group. We're going to do it with an actor. Listen.
UNIDENTIFIED MAN: Courage, common sense. I know that to fix our economy, we need some hard truths. Legalizing marijuana would save billions in law enforcement and prosecution, add to the tax base and stop making drug dealers rich. My old jobs plan would end the corporate income tax so American companies can reinvest and create American jobs. It's about hard truths. It's about change. It's about time.
KENNEY: This ad is by political consultant Joe Slade White. He's out of Buffalo and he's won a ton of awards. He's been doing this for years. But right away with the focus group, we could see that it wasn't quite working. By including all the controversial parts of the plan, people just have this immediate visceral reaction to the part of the plan they didn't like or maybe more than one part of the plan they didn't like. The ad restarted that whole argument we had about marijuana.
MARILYN M.: I don't think it matters what he says because the legalization of marijuana is one of those very specific polarizing issues like abortion, like gay marriage. And you're for it or you're against it. And there's nothing the candidate's going to say that's going to change your mind.
SMITH: OK. Stay away from drugs in a political campaign. It took us a long time to learn that but we learned it.
KENNEY: OK. But we had another ad. This one came from The Strategy Group for Media. Alex Tornero is their creative director. And he took a different approach. Rather than putting in a bunch of ideas, he focused on just one - eliminating the mortgage interest deduction. Hit it.
UNIDENTIFIED MAN: It's time for real tax reform to help the middle class. For years our country has subsidized home mortgage payments, a deduction that benefits the wealthy and pushes up home prices for everyone else. It's unfair. And I believe it's time we end that deduction and return the savings to you by bolstering education, improving services for seniors and funding job training programs.
SMITH: OK. I'm just going to pop in here for a quick second because I just - I should mention here that the ad guys came up with the bit about children and seniors, not the economists. They never mentioned that. OK, proceed.
UNIDENTIFIED MAN: Renting, owning, large house or small - American families deserve a fair tax plan that helps every home. I'm an actor giving voice to a plan designed by economists and I approve this message.
SMITH: So after the moderator reads out this ad, Mark at the end of the table leans in a little bit and says...
MARK: Thumbs up.
SMITH: Seriously, they liked it.
SMITH: Now remember, every single person voted against this when we used the economists' language. Now even Marilyn, the one who was so concerned about house prices for baby boomers, even Marilyn kind of liked it.
MARILYN M.: I think that it's an effective ad.
KENNEY: So we're feeling pretty good. We're thinking we are actually going to pull this off. With the help of these experts, we're going to convince people that these are ideas they would actually vote for, things that they like.
SMITH: Yeah, no.
KENNEY: Yeah. It turned out the effect was fleeting. After the focus group wrapped up and people were heading out, I pulled Marilyn aside and said, tell me more about how you really liked that ad.
SMITH: And she said that although she liked the part about fair taxes, she said the ad left you with a big question.
MARILYN M.: Wait a minute, what are they eliminating? How does that help? But in that quick moment it feels good.
SMITH: And I guess this is why political advertising gets a bad rap as manipulative. But I was thinking, like, there is a serious point here. Which is if you can make someone feel good about an issue even for a quick moment, then maybe they can consider an idea that otherwise they would have completely shut out before.
So the whole thing - the emotional content, the kids, the seniors, the stressing a fair tax plan, a fair tax plan - in some ways, all we did was to open just a tiny door. Open a door that says the mortgage interest tax deduction, we can at least just talk about this. We can at least consider what the economists had to say.
KENNEY: One small problem - our economists, the folks who came up with these ideas, they hated it.
SMITH: Yeah. They spent a long time explaining the intricate logical reasoning behind their plan and then they see 29 seconds of, let's be honest, like, not the most sophisticated thinking in the world.
So, you know, I called up Luigi Zingales from the University of Chicago. And he looked at the ad and he said, you know, you picked the wrong argument. He said that we should've pointed out that by eliminating the mortgage interest tax deduction, we could lower tax rates for everyone.
ZINGALES: In the ad you are pushing more, we can spend the money in a lot of other ways, education, this and that. Which is also true but it's not the way I would sell it.
KENNEY: Dean Baker, another one of our economists, he liked the part about fairness. He says he uses that argument himself. But he said that perhaps we should have pointed out that the mortgage interest deduction doesn't save as much money as most people think. In other words, we could have argued instead that getting rid of that deduction won't hurt too much.
SMITH: Everybody has ideas after you make your ad, right? Katherine Baicker from Harvard, she agreed with Luigi and Dean Baker about some of those criticisms. But she came away with sort of a bigger lesson. Perhaps, she said, she and the other economists, perhaps they should stick to the classroom where they have hours and hours and hours to explain this stuff.
BAICKER: From an academic perspective where we try to spend a lot of time going into the details of the pros and cons of things, that just doesn't seem compatible with the 30-second sound bite.
KENNEY: We're going to let you decide what you think. I got to say though, I think I did a pretty good job encapsulating that sort of warm fuzzy feeling you get from a political ad where you just look at the candidate and say, hey, I could talk to that guy. He looks friendly. He's not wearing a tie. Anyway, check them out yourself - npr.org/money.
SMITH: Yeah. I am a little bit impressed with how political the ad is. If it were on TV, you wouldn't think twice. You wouldn't think that's a radical economist's plan. You would just think, oh, another political ad. But I was thinking there actually is something a little revolutionary about this whole project that we've done. And that's this - our candidate, our fake PLANET MONEY candidate, is not going to get a single vote. I think we can agree with that. But maybe the next candidate that comes along, a real candidate that comes along and suggests one of these economist-approved ideas, maybe that candidate won't sound as radical because he or she can say at least I'm not as crazy as the PLANET MONEY guy.
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SMITH: On our website you can watch the two political ads we made for our candidate. That's npr.org/money. Tell us what you think of the episode. Find us on Facebook or Twitter or email us - firstname.lastname@example.org. Today's rerun was produced by Rayna Cohen (ph).
The election is almost here and the NPR POLITICS podcast is counting down to Election Day with new episodes every day, every day now through November 9. After November 9, who knows? All bets are off. So you should subscribe or listen now on the NPR One app. I'm Robert Smith. Thanks for listening.