Narcissus 'Salome'. April, 2013. Photo by joanneleon.
Poor Little Fool - Ricky Nelson (1958)
News and Opinion
The Rogoff and Reinhart trainwreck.
The 1 Percent’s SolutionNot just one, but TWO op-eds in the NYT. I'm not going to excerpt their justifications but they are there for everyone to see, plus they give a link to an "online-only" appendix. I am more focused on their tone today because we all know how important tone is, right? Their other defenses are there for everyone to read.
Economic debates rarely end with a T.K.O. But the great policy debate of recent years between Keynesians, who advocate sustaining and, indeed, increasing government spending in a depression, and austerians, who demand immediate spending cuts, comes close — at least in the world of ideas. At this point, the austerian position has imploded; not only have its predictions about the real world failed completely, but the academic research invoked to support that position has turned out to be riddled with errors, omissions and dubious statistics.
And the studies did not hold up under scrutiny. [...] Yet austerity maintained and even strengthened its grip on elite opinion. Why?
Part of the answer surely lies in the widespread desire to see economics as a morality play, to make it a tale of excess and its consequences. [...] But it’s not just a matter of emotion versus logic. You can’t understand the influence of austerity doctrine without talking about class and inequality.
You get the idea: 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.
Reinhart and Rogoff: Responding to Our CriticsPoor Rogoff. Poor Reinhart.
By CARMEN M. REINHART and KENNETH S. ROGOFF
Published: April 25, 2013
LAST week, we were sent a sharply worded paper by three researchers from the University of Massachusetts, Amherst, [...]
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.
Our critics seem to suggest that they can ignore everything else we have done because we are somehow going around placing great emphasis on one outlier estimate for growth. This is wrong. We have never used anything but the conservative median estimate in our public discussions, where we stated that the difference between growth associated with debt under 90 percent of G.D.P. and debt over 90 percent of G.D.P. is about 1 percentage point. See, for example, a Bloomberg Businessweek article from July 2011 that has been cited as evidence that we are fiscal hawks. In that article, we cite only the median.
Debt, Growth and the Austerity DebateRogoff at a Peterson Institute event.
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.
Reinhart and Rogoff Are Not Being StraightYeah, when even Yglesias turns on you... and Colbert takes you down with a double segment, you're screwed. Poor, poor Rogoff and Reinhart.
Carmen Reinhart and Ken Rogoff, used their second NYT column in a week, to complain about how they are being treated. Their complaint deserves tears from crocodiles everywhere. They try to present themselves as ivory tower economists who cannot possibly be blamed for the ways in which their work has been used to justify public policy, specifically as a rationale to cut government programs and raise taxes, measures that lead to unemployment in a downturn.
This portrayal is disingenuous in the the extreme. Reinhart and Rogoff surely are aware of how their work has been used. They have also encouraged this use in public writings and talks. While it is unfortunate that they have "received hate-filled, even threatening, e-mail messages," as one who works in the lower-paid corners of policy debates, let me say, welcome to the club.
Reinhart & Rogoff Call Backsies
Controversial economists Carmen Reinhart and Vincent Rogoff have a response to their critics in today's New York Times that ought to persuade nobody. The crucial move in this op-ed, as in other defenses of their "Growth in a Time of Debt" piece, is to obscure what it was that was allegedly interesting and allegedly important about the paper. The question, recall, was about the relationship between indebtedness (measured as the ratio of debt to GDP) and economic growth (measured as a change in GDP). The raw fact that there's a statistical correlation between debt:GDP being high and GDP growth being low is trivial and offers no policy guidance. Countries with a high ratio of sheep to people generally have low populations, but that doesn't mean that killing sheep leads to population growth. Right?
Study Debunking Austerity Research Sparks Wide ReactionColbert
Published on Apr 23, 2013
Bob Pollin (Co-Author of Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff): Deficit Hawks still defend conclusions of a study that contained spreadsheet errors and weighted selected countries in an inappropriate way; led to incorrect theory about public debt and growth
Austerity's Spreadsheet Error
Carmen Reinhart and Kenneth Rogoff's 2010 debt study inspires austerity around the world, but grad student Thomas Herndon debunks the results.
Austerity's Spreadsheet Error - Thomas HerndonAnd the president and Harry Reid look for a way to sort of quietly erase the sequester, at least for a number of months. That sequester? .... nevermind. They can bury the cuts in some huge bill later or something, with their sweeping "tax reform" and "entitlement cuts".
Graduate student Thomas Herndon identifies little staggering omissions in a prominent academic paper, "Growth in a Time of Debt."
White House: Obama supports Reid plan to replace sequester
White House press secretary Jay Carney said Wednesday that President Obama supports a plan proposed by Senate Majority Leader Harry Reid to replace the sequester cuts, even though it doesn't contain new tax revenue.
The president had previously said he would oppose such measures unless Republicans agreed to include taxes as part of the deal.
Carney said Obama supports Reid's plan because it is a temporary fix that would allow time to reach agreement a permanent solution that does include higher taxes on the wealthy.
Blog Posts and Tweets of Interest
In which Reinhart & Rogoff pretend they never backed austerity and have consistently been voices of moderation. slate.com/blogs/moneybox…— Matthew Trumbell (@MTrums) April 26, 2013
@prosyn Reinhart & Rogoff ≈ Ren & Stimpy— Thomas Bullemore (@tbullemore) April 26, 2013
@deanbaker13 I feel so sorry for Rogoff and Reinhart. They must be as miserable as the millions of unemployed their paper created. Oh wait— Brett (@QuietAmerican55) April 26, 2013
Shorter Reinhart/Rogoff: "We were wrong but really we were right" – nytimes.com/2013/04/26/opi…— Matt Seaton (@mattseaton) April 26, 2013
A "let's be concerned about debt and not our paper" response: Reinhart and Rogoff’s Rejoinder - po.st/ndI8tW— Dan Otto (@MonetaryTheory) April 26, 2013
Reinhart & Rogoff try to call backsies on their austerity-mongering: slate.com/blogs/moneybox…— Matt Yglesias (@mattyglesias) April 26, 2013
"Poor Me" - Fats Domino