As the saying goes in public debate: “When you’re defending, you’re losing.”

Unfortunately, someone forgot to remind Harvard economists Carmen Reinhart and Kenneth Rogoff about that inconvenient fact as they rambled on in--not one, but--two lengthy op-eds in today’s NY Times (See: “Debt, Growth and the Austerity Debate” and “Reinhart and Rogoff: Responding to Our Critics”) where they managed to trivialize their recently-discovered bush league f*ck-up Excel “mistake” within their highly-publicized and oft-quoted academic research from their May 2010 academic paper: "Growth In A Time of Debt.”      

Luckily, level-headed Princeton economist Paul Krugman reminds us in, “The 1 Percent’s Solution,” that the first thing fellow economic scholars should do when they find themselves in a deep hole caused by incompetent research methodologies is to admit the truth and stop digging. But, apparently, once again, someone forgot to copy Carmen and Kenneth on that memo. And, after you read Krugman today, you’ll realize he’s a bit cynical about how this is all going to end, as well.

Reinhart’s and Rogoff’s work, up until just a couple of weeks ago, served as the go-to scholarly reference validation for national government budget “austerians” around the globe and amongst all the very serious people in Washington. Adding insult to injury, Harvard’s daily double also made the brilliant move on the pages of today’s NYT of blaming virtually the entire “left” for expressing misdirected outrage and “impugn[ing] their integrity” over this minor issue.

After all, what’s a little thing like a hugely-flawed piece of academic research, when the ONLY effect it’s going to have is to validate the egregious actions of governments around the world so that their leaders feel justified as they pillage their citizens’ life savings and steal food off the tables of billions of poor souls? I mean, seriously?! How dare the public hurt these two esteemed economists’ feelings! Gosh! Look what we’ve done! Reinhart and Rogoff are genuinely pissed-off at us in today’s NYT…

Reinhart and Rogoff: Responding to Our Critics
New York Times
Friday, April 26th, 2013


LAST week, we were sent a sharply worded paper by three researchers from the University of Massachusetts, Amherst, at the same time it was sent to journalists. It asserted serious errors in our article “Growth in a Time of Debt,” published in May 2010 in the Papers and Proceedings of the American Economic Review. In an Op-Ed essay for The New York Times, we have tried to defend our research and refute the distorted policy positions that have been attributed to us. In this appendix, we address the technical issues raised by our critics.

These critics, Thomas Herndon, Michael Ash and Robert Pollin, identified a spreadsheet calculation error, but also accused us of two “serious errors”: “selective exclusion of available data” and “unconventional weighting of summary statistics.”

We acknowledged the calculation error in an online statement posted the night we received the article, but we adamantly deny the other accusations…

…we view ourselves as scholars, though obviously given the prominence of book, and the extraordinary circumstances of the financial crisis, politicians will of course try to use our results to advance their cause. We have never advised Mr. Ryan, nor have we worked for President Obama, whose Council of Economic Advisers drew heavily on our work in a chapter of the 2012 Economic Report of the President, recreating and extending the results.

In the campaign, we received great heat from the right for allowing our work to be used by others as a rationalization for the country’s slow recovery from the financial crisis. Now we are being attacked by the left — primarily by those who have a view that the risks of higher public debt should not be part of the policy conversation. Above all, we resent the attempt to impugn our academic integrity…

Now, if you’ve been paying any attention in this debate over the past few years, you realize that this Harvard dynamic duo’s line: “Now we are being attacked by the left — primarily by those who have a view that the risks of higher public debt should not be part of the policy conversation,” is pure, unadulterated bullsh*t. Any New Keynesian economist worth their salt will tell you that you certainly DO address higher public debt throughout the policy conversation, but you plan to resolve it after the economy’s returned to some semblance of normalcy. Not before the public’s stopped bleeding profusely.

Sanity…from Professor Krugman in his own, regularly-scheduled column in today’s Times…

The 1 Percent’s Solution
New York Times
April 26, 2013

many economists raised fundamental questions about Reinhart-Rogoff long before we knew about the famous Excel error. Meanwhile, real-world events — stagnation in Ireland, the original poster child for austerity, falling interest rates in the United States, which was supposed to be facing an imminent fiscal crisis — quickly made nonsense of austerian predictions.

Yet austerity maintained and even strengthened its grip on elite opinion…

…The austerity agenda looks a lot like a simple expression of upper-class preferences, wrapped in a facade of academic rigor. What the top 1 percent wants becomes what economic science says we must do.

Does a continuing depression actually serve the interests of the wealthy? That’s doubtful, since a booming economy is generally good for almost everyone. What is true, however, is that the years since we turned to austerity have been dismal for workers but not at all bad for the wealthy, who have benefited from surging profits and stock prices even as long-term unemployment festers. The 1 percent may not actually want a weak economy, but they’re doing well enough to indulge their prejudices.

And this makes one wonder how much difference the intellectual collapse of the austerian position will actually make. To the extent that we have policy of the 1 percent, by the 1 percent, for the 1 percent, won’t we just see new justifications for the same old policies? …

Here’s more from Reinhart and Rogoff; this excerpt's from their second piece in today's Times…
Debt, Growth and the Austerity Debate
New York Times
Friday, April 26th, 2013


IN May 2010, we published an academic paper, “Growth in a Time of Debt.” Its main finding, drawing on data from 44 countries over 200 years, was that in both rich and developing countries, high levels of government debt — specifically, gross public debt equaling 90 percent or more of the nation’s annual economic output — was associated with notably lower rates of growth.

Given debates occurring across the industrialized world, from Washington to London to Brussels to Tokyo, about the best way to recover from the Great Recession, that paper, along with other research we have published, has frequently been cited — and, often, exaggerated or misrepresented — by politicians, commentators and activists across the political spectrum.

Last week, three economists at the University of Massachusetts, Amherst, released a paper criticizing our findings. They correctly identified a spreadsheet coding error that led us to miscalculate the growth rates of highly indebted countries since World War II. But they also accused us of “serious errors” stemming from “selective exclusion” of relevant data and “unconventional weighting” of statistics — charges that we vehemently dispute. (In an online-only appendix accompanying this essay, we explain the methodological and technical issues that are in dispute.)

Our research, and even our credentials and integrity, have been furiously attacked in newspapers and on television. Each of us has received hate-filled, even threatening, e-mail messages, some of them blaming us for layoffs of public employees, cutbacks in government services and tax increases. As career academic economists (our only senior public service has been in the research department at the International Monetary Fund) we find these attacks a sad commentary on the politicization of social science research. But our feelings are not what’s important here…

Many economists have no patience for the inconvenient reality that politics overrides (and severely "interferes" with) their “science” more often than not. So, frankly, I have no patience for economists that don’t focus upon this greater truth. (Orthodoxy has no place in any sane economic discussion these days, IMHO.) And, when it comes to the ongoing and extractive behavior of the one percent, I have zero tolerance for virtually anyone (regardless of whether or not they’re an economic scholar) that proselytizes about the benefits of austerity in this era of unbridled capitalist greed.

Yet, some still wonder why economics is referred to as the “dismal science?”

Originally posted to http://www.dailykos.com/user/bobswern on Fri Apr 26, 2013 at 01:43 AM PDT.

Also republished by Keynesian Kossacks and Money and Public Purpose.

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