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Monday, January 19, 2009

"Economists, Ideology, and Stimulus"

Paul Krugman says what I've been trying to say:

Economists, ideology, and stimulus, by Paul Krugman: Mark Thoma and Brad DeLong are both, in slightly different ways, perturbed by the state of debate over fiscal stimulus. So am I. This has not been one of the profession’s finest hours.

There are certainly legitimate arguments against spending-based fiscal stimulus. You can worry about the burden of debt; you can argue that the government will spend money so badly that the jobs created are not worth having; and I’m sure there are other arguments worth taking seriously.

What’s been disturbing, however, is the parade of first-rate economists making totally non-serious arguments against fiscal expansion. You’ve got John Taylor arguing for permanent tax cuts as a response to temporary shocks, apparently oblivious to the logical problems. You’ve got John Cochrane going all Andrew-Mellon-liquidationist on us. You’ve got Eugene Fama reinventing the long-discredited Treasury View. You’ve got Gary Becker apparently unaware that monetary policy has hit the zero lower bound. And you’ve got Greg Mankiw — well, I don’t know what Greg actually believes, he just seems to be approvingly linking to anyone opposed to stimulus, regardless of the quality of their argument.

Needless to say, everyone I’ve mentioned is politically conservative. That’s their right: economists are citizens too. But it’s hard to avoid the conclusion that all of them have decided on political grounds that they don’t want a spending-based fiscal stimulus — and that these political considerations have led them to drop their usual quality-control standards when it comes to economic analysis.

Has there been any comparable outbreak of mass bad economics from good liberal economists? I can’t think of one, although maybe that’s my own politics showing. In any case, what’s happening now is pretty disturbing.

Greg Mankiw's response is:

Let me make clear: When I link to another economist here on this blog, it is typically because I think his or her arguments are worth hearing and thinking about, not necessarily because I agree with all of them. I don't have the time to offer a refereeing service for every article I mention. So when I say, "Here is an article by Professor X," I mean "Here is an article by Professor X," not "Here is an article by Professor X, and I approve of everything he says."

I don't think this is satisfactory (and I've told Greg that by email in the past, though it's been awhile). If he has read something and disagrees with it, why not say so (e,g, "I think this is interesting, but don't necessarily agree with the point about whatever"). It only takes a few seconds to add this, and it alerts readers who wouldn't know otherwise that there may be flaws in the argument. He doesn't have to say why he disagrees, that can take a long time, but he can state that a disagreement exists. Basically Greg has given himself a free hand to post things that support his point of view - further his political agenda - without having to take responsibility for what is said or how it is presented (and the excuse that he doesn't have time to vet everything he posts because he's such a busy, important guy doesn't cut it). I used to think I could post things without comment that were decent arguments, but that I disagreed with, but I found that people attribute the views posted here to me whether I like it or not (hence, for example, when I posted the recent Borjas piece, I italicized the word his in the introduction, "George Borjas with his advice for the incoming administration," and even then I worried I wasn't clear enough that I didn't necessarily agree). If I post something and disagree, then I think I need to say so. If I don't state disagreements and post something anyway, then I shouldn't be surprised if people think it's a view I endorse.

But this misses the biggest part of the problem. The problem isn't Greg Mankiw linking to Paul Krugman even though he disagrees and having people believe that Greg endorses Paul's views. Those cases are pretty clear, and the disagreement is usually stated pretty clearly anyway (or it doesn't get posted). The problem comes when you post things that support your point of view, but you don't necessarily agree with the theory, methodology, etc. used to arrive at the supporting conclusion. This is where the confusion is the greatest. People know, for example, that Greg has been a skeptic on stimulus spending, so when he posts an argument against government spending as a stimulus tool, people naturally think it's an argument he endorses. And they should, why else would it be posted if not as supporting evidence? Declaring that you might post things that support your agenda without any comment at all, even when you have questions about how the conclusion was derived, is a license to mislead.

Update: Also see Robert Waldmann with What's in the Water in Chicago? and The Effect of Government Spending on GNP in the Classical model.

    Posted by on Monday, January 19, 2009 at 10:17 AM in Economics, Methodology | Permalink  TrackBack (0)  Comments (66)


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