Another Reason Not To Trust The Talking Heads

Bill Keller, who otherwise has always struck me as a pretty good guy, wrote this opinion piece in the New York Times today, and it is a perfect example of a little knowledge going a long way.  He seems to understand that the evidence is that a short term stimulus is a good idea.  So far so good.  Then he wanders off into why economists can't agree, and that is when the trouble starts.  He quotes Glenn Hubbard as a smart economist.

For any of you who haven't seen the documentary INSIDE JOB, see it now.  Then you will understand why so many economists can't agree.  They are for sale!  Disgusting!  Pathetic!  And he is the dean of the school of business at Columbia.

"The Politics of Economics in the Age of Shouting

By BILL KELLER

I share a virtual neighborhood with a legion of Times reporters, editors and columnists who know more than I will ever know about business and economics. (Look! Right over there: a Nobel-prize-winning economist!) In this humbling company, on this intimidating matter, who am I to tell anyone what to think? And so my plan was, frankly, to avoid the subject.
But while there are things a columnist can ignore (if Kim Kardashian ever features in this column, just shoot me), our failing economic ecosystem is not one of them. So for the past several weeks my airplane and bedside reading has consisted of sexy documents like “A Roadmap for America’s Future” and “The Way Forward” and “The Moment of Truth” and “Restoring America’s Future” and “Living Within Our Means and Investing in the Future.” I’ve also reached out to a few economists respected for the integrity of their science and their patience with economic illiterates.
The first thing I gleaned from this little tutorial will probably not surprise you: There really is a textbook way to fix our current mess. Short-term stimulus works to help an economy recover from a recession. Some kinds of stimulus pay off more quickly than others. Once the economic heart is pumping again, we need to get our deficits under control. The way to do that is a balance of spending cuts, increased tax revenues and entitlement reforms. There is room to argue about the proportions and the timing, and small differences can produce large consequences, but the basic formula is not only common sense, it is mainstream economic science, tested many times in the real world.
So what’s the problem? Why is our system so fundamentally stuck? Partly it’s a colossal, bipartisan lack of the political courage required to tell people what they sort of know but don’t want to hear. Partly it’s a Republican Party that, for its own cynical reasons, wants no deal with this president. Partly it’s moneyed, focused lobbies that swarm in defense of specific advantages written into the law; there is no comparable lobby for compromise, let alone sacrifice.
But also, I’ve come to think something is rotten in the state of economics. The dismal science, as Thomas Carlyle called it, has been ravaged by the same virus that has corrupted the rest of our national discourse.
Back in the very pre-digital days, the writer A. J. Liebling famously remarked that freedom of the press was guaranteed only to the man who owned one. Nowadays, of course, freedom of the press belongs to anyone with Internet access, from the information guerrillas of WikiLeaks to the blogger next door. The democratization of media has diminished the authority once held — and sometimes abused — by a few big newspapers and broadcasters. In many ways this has enriched society, creating a great global buffet of information and opinion, pooling the knowledge of the masses and providing an almost instantaneous reality check on the conventional wisdom.
The consequences have not all been happy, though. The easiest way to stand out in such a vast crowd of microbroadcasters is to be the loudest, the angriest, the most outrageous. If you want that precious traffic, you stake out a position somewhere in oh-my-God territory and proclaim it with a vengeance. Global warming is a hoax! Vaccines make you sick! Obama is a Muslim! In vanquishing the conventional wisdom, sometimes it seems we have vanquished wisdom itself.
Economists don’t live in caves, so there is no reason they should be immune to the centrifugal politics of this noisy world. Thus serious scholars are tempted to sign onto ideas that stretch their own credulity, and lesser economists are thrust forward for their moment of fame as witnesses on behalf of dubious claims. Economists cluster in ideological think tanks that promote political conformity rather than intellectual rigor. Politicians, with no generally accepted consensus to challenge them, can get away with plucking data out of context to bolster assertions that are based more on faith than on reality. Tax cuts pay for themselves! Protectionism saves jobs! It’s all the Fed’s fault! Deficits don’t matter! Obama is a socialist! Say it often enough and before long it’s a serious discussion on cable TV, in which the proven and the preposterous get the same respectful chin-wagging.
“Nobody who is taken seriously as an economist is going to say ‘cancel the Fed,’ ” said Glenn Hubbard, the dean of Columbia Business School, chairman of the Council of Economic Advisers under George W. Bush, and now Mitt Romney’s chief economic adviser. “I find it very disturbing that the media is giving equal time to some ideas that are just crazy.”
The Web site PolitiFact, the Pulitzer-winning fact-checking service, recently did a thorough debunking of Republican claims that Obama’s 2009 stimulus program created, quote, “zero jobs.” In fact, the checkers established, using still-trustworthy sources like the Congressional Budget Office, that the stimulus created or saved a couple of million jobs. Case closed? No, the Republicans just went on repeating the claim.
“The talking points drive the discourse,” said Bill Adair, the editor of PolitiFact. “They repeat the talking points so often I think they start actually believing them.”
In the Internet age, anyone can be an expert, and anyone who says otherwise is an elitist.
The other day House Speaker John Boehner put out a list of 132 economists who signed a statement endorsing a Republican menu of spending cuts, tax cuts and deregulation. All of these are legitimate things to propose, but the statement claimed the Republican list “will do more to boost private-sector job growth in America in both the near-term and long-term than the ‘stimulus’ spending approach favored by President Obama.” Reputable number-crunchers like Moody’s Analytics and some top-tier economists of both parties said Boehner’s statement would have little or no impact on the short-term employment problem. So who were these 132 economists? With a few exceptions they were academics from off-the-beaten-path colleges (no offense to Dakota State University), bloggers (the Calafia Beach Pundit?) and economists from devoutly libertarian think tanks. But the news had the right-wing tom-toms beating with excitement.
“I’ve never in my professional life seen the disjunction between the political debate about economics and the consensus of economists be as large as it is today,” said Justin Wolfers, a Wharton School economist who favors Democrats, and who tweeted withering commentary on the list of 132.
Surely this dilution of authority contributes to our national paralysis. At the very least it befogs the discussion and fosters a pervasive cynicism.
Columbia’s Hubbard says the way to weed out the quackery is for serious economists to speak up when silly ideas get a political foothold. He’s right, but once a mainstream economist has settled comfortably into a party-line think tank or joined a candidate’s brain trust, or even enjoyed the adulation at partisan cocktail parties, a degree of self-censorship takes hold.
Of course, there have always been economists who leaned right or left — and some outright snake-oil salesmen — but until recently the public debate about economics pretty much stayed within the boundaries of accepted science. Friedrich Hayek and Milton Friedman have become conservative icons, John Maynard Keynes and Paul Samuelson are stalwarts of the liberals, but in their lifetimes they all had a reverence for evidence (even if their acolytes did not).
Rereading some of the alternating, left-right weekly columns Samuelson and Friedman wrote for Newsweek in the 70s, I’ve been struck by their shared assumptions, and by the fact that the tone was so civil. It’s not hard to imagine both men signing on to the kind of grand bargain that keeps eluding Congress now. But if they were getting started in today’s media market, they would probably be obliged to amp up the vitriol, to sound like the old “Saturday Night Live” “Point-Counterpoint” parody:
“Paul, you pompous ass!”
“Milt, you ignorant slut!”"