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View Diary: How much longer can the Austerians and their puppets go on with their failed policies and lies? (125 comments)

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  •  Physics v. economics (1+ / 0-)
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    FG

    Overall, physics and the other natural sciences provide definite answers to questions by way of controlled experiments with replicable results (at least in principle). Economics cannot, on the whole, perform controlled experiment, let alone replicable one. As it exists today, it is as much an expression of and discussion about perspectives, and the choice of these perspectives has less to do with value-neutral natural science than with various philosophical stances.

    And that is why Mr. Krugman is not safe from ridicule or disagreement. Just to illustrate the issue obliquely—Krugman won a Nobel prize for economics, but so did Milton Friedman and Friedrich Hayek. I'm sure all three would have a great time in a discussion (and I'd like to be a fly on that wall), but there is little chance that any of them will leave that meeting having persuaded the other two to crown him as King of the Economists.

    •  I think that's a cop-out (1+ / 0-)
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      katiec

      There are certain economic truths, and they have to be established, so that the charlatans who push falsified ideas are marginalized.

      as i had written as well, social sciences, even hard ones like Economics, are harder to establish consensus on some issues than the raw hard sciences like physics, but there are universal truths in economics, you can't just shrug it off as if it's purely a matter of ideological difference, that's just wrong.

      the point is, at what point do we say "okay, we know austerity doesn't work. let's check that one off the list" under the current conditions that we can establish?

      it's not an opinion that should be respected any less than someone's blind faith in creationism should be respected.

      •  Universal truths (0+ / 0-)

        Immediate problem: in order to meet your test, you would have to define "austerity" according to value-neutral criteria. I submit that this is, at best, no going to be an easy thing to do. To be honest, I think it is impossible. But in any case, I know of no generally-accepted definition of such a thing that all "mainstream" economists would sign on to.

        Intermediate problem: the things claimed to be universal truths in economics are often either obvious, trivial, or value preferences disguised and smuggled in under pretense of neutrality. Alternatively, there are always abundant counter-examples in need of explanation (or to be explained away).

        Larger problem: the fact that economics deal often with numbers does not, in fact, make it "hard" or somehow more scientific. The mere fact that one can amass numerical data and manipulate it statistically says very little about the quality of the data. E.g., economists often need to ask people their opinions, which are then quantified. Among other issues, sometimes people lie, or are mistaken. Again, contemporary economics depends on various indices, all of which are subject to somebody's decisions as to what counts or what belongs in the index—these matters are fought over. Economics has never even managed to erect uncontroversial criteria of what it is studying. Homo economicus? The rational consumer? A free market? The money supply? All are contested entities.

        To sum up—there may be all sorts of economists with whom we disagree, but we might wish to hold off on denouncing them as charlatans. Economics is not, and never will be, anything like a natural science, and it is simply not the case that, say, Hayek or Friedman was deliberately and fraudulently purveying demonstrably false analysis.

        Below, just three areas where, as you can read, there is plenty of disagreement about what, in fact, is being studied. This sort of basic issue is not generally a problem in chemistry or biology.

        http://en.wikipedia.org/...
        http://en.wikipedia.org/...
        http://en.wikipedia.org/...

        •  That's why I like MMT. It begins with merely (1+ / 0-)
          Recommended by:
          dorkenergy

          describing our current national accounting practices.

        •  Austerity was ... (1+ / 0-)
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          melo

          ... only one example of many. but since we're on that, I'm hard-pressed to find any model that justifies austerity, or any empirical data that would support that kind of thing.

          Maybe it's a "value preference" to insist on full employment and stable growth as optimal outcomes, but it breaks down to semantics. However, even I'm old enough to have studied the field in a time when those were value-neutral metrics...

          Accounting balances (sectoral, production,income) are not up for discussion. Supply and demand effects are not up for discussion.  Theoretical physicists have extreme differences that are often impossible to reconcile, but every field has their strong points and their flimsy ares.

          Your larger problem seems a bit more pedantic than constructive in its criticism. Of course economics is a much harder and scientific social science because it has numbers. This leaves all theories open to falsifiability, which is central to "scienceness". But again, this is just getting silly.  

          And i hate to break it to you, Hayek and the Austrians (no, Friedman was not an Austrian)  are no longer considered credible because they essentially refused to embrace empirics or the hard analysis that subjects it to the standards to which other harder sciences are held.

          Hey I can play that game too, here's a handful of physical topics that are under debate where there's plenty of disagreement even about what is being studied:

          http://en.wikipedia.org/...
          http://en.wikipedia.org/...
          http://en.wikipedia.org/...

          It's completely unproductive to try and go on a mission to discredit a field that has made serious progress in the past century, but because of the political implications of economic theory it's fair game to hijack it in the interest of political charlatans to confuse the progress we have made.

          The goal of the Austrian (Austerian) is to confuse the empirical advancements in order to destroy the discussion so that it becomes one of semantics and that it is brought down to the philosophication that they are limited to in their own subfield.

          •  Short summary (0+ / 0-)

            I think you've arrived at a very strange set of views. However one responds to Hayek or Friedman, to say that they "refused to embrace empirics or ... hard analysis" is just plain peculiar. The work for which Friedman was cited by the Nobel committee was basically statistical. Hayek produced reams of work in microeconomics.

            Beyond that, in the social sciences, in economics, there is and has long been a very active discussion over the extent to which the natural sciences can provide a model for social sciences. You seem to imagine that there has been a consensus opinion arrived at; there has not. In economics, the profession continues to discuss the question of what processes are amenable to mathematical treatment—again, not settled issues. Even more oddly, you apparently believe that to even raise these issues is to attempt to discredit the field entirely.

            That aside, you entirely miss the point of the thought that there is disagreement over what is being studied. No one in physics disagrees about the existence of matter, energy, atoms, electrons, fields, or how to measure the speed of light or the energies released in a particle accelerator. All scientists understand what is meant by a molecule, an element, a bond, etc. The links you provide are not about basics, but about high-end theories of possible ways to account for some mathematical anomalies. But there are any number of physicists who will inform you that string theory and dark matter are so far little more than speculative hypotheses, and that a unified theory is something worth seeking, but whose existence is also as yet undemonstrated.

            No economist denies that markets exist or that populations of human beings make choices which can then be interpreted. However, those are what I called trivial or obvious truths, right on up there the inverse relation between supply and demand. It does turn out, though that there is much ink spilled over what qualifies as a market and what could be valid measures of those choices, whether the humans doing the choosing should be understood as rational, etc. The ramification of these difficulties is that economics is perpetually in need of justifying and explaining the particular assumptions of any given economic explanation—with the broadest claims in need of the greatest amount of explanation. In the end, for all its nifty mathematical apparatus, economics is and will likely remain more art than mathematical science.

            You, of course, are welcome to believe otherwise—much as with any faith. And I suppose that to any True Believer, the beliefs of other sects must be denounced as the opinions of dastardly charlatans. I can only suggest that you might wish to rethink this narrow, ideological stance.

            •  One last thing (0+ / 0-)

              Just as an exercise, you might try to tell us exactly what is "austerity," and how it can be scientifically recognized, let alone differentiated from prudent expenditure.

              •  Here's a simple exercise in the math (0+ / 0-)

                http://online.wsj.com/...

                The economy reversed from a 3.1% pace of growth in the third quarter to a 0.1% drop largely because federal government spending fell by 15%....
                Austerity is the drop in gov spending perpetuating lower GDP in a time of already sluggish growth.

                Solution? Spend gov money, higher gdp.

                Simple.

                You can masturbate around that all you want, but that's a mathematical reality.

                The politicians can comei n and say "NO WE CANT SPEND THE MONEY " but that really doesn't matter, because if they spent the money, the GDP would have been positive, if not, it wasn't.

                Simple, mathematical.

                •  Needs more work (0+ / 0-)

                  Lower government spending (in time of slow growth) is how you define austerity? Great! We'll ramp up crop subsidies and grain export credits, then offer to help the French out with more troops and equipment for Mali, as well as increase the pay for execs at AIG and Fannie and Freddie. Bam! No more austerity—watch that GDP soar (leaving side various issues as to how GDP reflects or does not reflect government spending—the kind of thing that, sadly, there is no scientific principle to solve).

                  The above is not entirely fanciful, as the article you link to claims that the 15% decline in federal spending comes largely from declining defense expenditure. Now, why is it that I don't think that the choices above are what you had in mind?

                  Enjoy your mathematical masturbation. And if you can get around to it, someday you can try to figure out a "scientific" definition of austerity. But this ain't it.

                  •  Funny... (0+ / 0-)

                    ...out of all the times I've discussed austerity, never has anyone been so hopelessly pedantic.

                    The fact is whether that money was spent on export credits or wasted on whatever you have a personal preference for, as long as cash was spent on government spending as accounted for in the GDP identity, then higher-than-reported gov spending of any sort would have prevented recession if it was to offset the decline.

                    Go philosophize on that, von Misses.

                    •  I never met (0+ / 0-)

                      the von Misses. Are they related to Ludwig von Mises? But never mind—I can see that getting things right, asking for clarity is too pedantic for you. Given that you came in with grandiose claims about a variety of technical issues, crying "pedantry" seems more than a litte disingenuous, however.

                      Among the other pedantic little things you don't want to know about are the technicalities of how govnment expenditure is accounted for in GDP. But hey, like Casey Stengel said, you could look it up.

                      Meantime, your so-called "definition" of austerity as any decline in government spending on anything during a recession does nothing more than open various cans of worms, including the question of why call this "austerity," as opposed to, say, prudential budgeting. Try answering a direct question: if during time of recession government cuts back on defense spending and agricultural supports, throwing all those savings into social welfare programs, are you still going to refer to this as austerity? I'm going to bet that you would not. But that will mean that your definition of austerity, as I said, needs work.

                      Something else that needs work (besides your manners), is your limited view of the world, in which anyone who opposes you must be of some evil faction of charlatans. In fact, I have no particular brief for Mises or Hayek—they were just examples. If you could read beyond your own ire, you might have noticed that I said nothing in support of their theories, only that they were serious people taking on serious problems. Would that you were more like them in this regard.

            •  You have not progressed the discussion (0+ / 0-)

              You're playing a game of rhetoric.

              Just as in physics there are theoretical aspects that are in contention, so too in economics do they participate in the same circle jerk.

              But both fields have mathematical certainties, identities, and laws, which you ignore in order to divert any economic discussion into a session of philosophical masturbation.

              You also are being dishonest by purposely misinterpreting what I wrote (when I clearly excluded Friedman from the bunch, since he's not an Austrian schooler and has embraced empirics that's why he is  respected and I excluded him):

              "And i hate to break it to you, Hayek and the Austrians (no, Friedman was not an Austrian) "

              But you have to lie in orer to push your agenda, to begin your comment with such a false premise strengthens the perceived strength of the rest of what you spew.

              I used to read Mises forum stuff, i'm very familiar with the semantic games you guys play, that's why I called you on it right away before you overtly stated as much.

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