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Wednesday, June 11, 2014

'What's the Penalty for Pundits Who Get It Wrong?'

Barry Ritholtz:

What's the Penalty for Pundits Who Get It Wrong?: Five years ago, Arthur Laffer ... wrote an op-ed article. It was a grab bag of his pet peeves: opposition to Federal Reserve policies ... and concern about the “unfunded liabilities of federal programs,'' including Social Security and Medicare. And, of course, he decried deficits, which in large part are the result of his thesis that tax cuts often increase revenue. As it turns out, for the most part, they don’t.
The article he penned on June 11, 2009? “Get Ready for Inflation and Higher Interest Rates.”  ...
Pretty much every single warning, every data point, every item Laffer complained about was wrong.
Why does this happen, and why are there no penalties for being so inaccurate? ... This isn't about economics, it's about politics. Unfortunately, the dismal science has become the vehicle of choice for those who seek to further their own political agenda. ...

I would separate those who are honestly wrong from those who take a misleading position (or one they know is wrong) for political purposes. There should be consequences in both cases, those who are honestly wrong again and again should come to be ignored, but those who intend to mislead and deceive should face much higher penalties. As it stands, there's hardly any penalty at all for telling people what they want to hear even if there is no basis for it, or misleading people to accomplish a political agenda.

    Posted by on Wednesday, June 11, 2014 at 07:07 AM in Economics, Press | Permalink  Comments (36)


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