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(Bloomberg)   Economists agree on most major macroeconomic issues - it's politics that makes it appear otherwise   (bloomberg.com) divider line 101
    More: Obvious, U.S., Ramesh Ponnuru, Arthur Laffer, mainstream economists, Jeffrey Goldberg, economics  
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1678 clicks; posted to Politics » on 24 Jul 2012 at 11:14 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-07-24 12:41:16 PM  

Talondel: Serious Black: It's funny that you specifically point out that these two things are policies no Democrat would ever support when Paul Krugman, Obammunist extraordinaire, has written about why rent control laws are bad for poor people and why free trade laws help American workers.

Right, but Krugman is an economist not a politician (I think, I know sometimes he blurs the line these days). And last I checked that is what both the linked article and this thread are about. Politicians who don't support well established economic policy for political reasons.

I mean, Milton Friedman would have supported the majority of the things the article lists "Republicans" as opposing, but it would be moronic to use him as a counter example, because he was an economist and not a politician.

And even if you can find individual Republican or Democratic politicians that are exceptions to the rule (and they do exist, on both sides) that still wouldn't undermine the general point of the linked article or my post. Both of which are simply illustrating sound economic policies that are far outside the mainstream views of the parties.


Good point. And the reason they're out of the mainstream views of the Republicans and the Democrats, quite frankly, is because many of those policies would prevent their corporate and stinking rich benefactors from skimming any money off the top.
 
2012-07-24 12:41:34 PM  

WombatControl: I know, let's cherry-pick 40 economists who agree on most issues and use that to argue that all economists agree! That's not deceptive, it's science!

There's a few things in there that are true: the bank bailouts probably did save the banking industry, at a huge moral hazard. No, tax cuts do not pay for themselves, but that's not the reason for them.

But the argument that the stimulus worked is silly - it's an unfalsifiable statement because we can't create an alternative universe in which the stimulus didn't happen and compare the results. What we can do us figure out the cost of the stimulus compared to the number of jobs reported to have created - which comes out to over $200K/job. We can compare GDP and employment growth in this recession compared to past recessions to determine how effective the stimulus was - and this recovery has been far slower than others. Yes, when you spend $800B, that will create some jobs - but the question is whether the costs incurred were worth it.

And again, science does not operate by consensus. Saying X number of experts agree is next to worthless. Every economist on the planet could agree on something save one, but that one economist's theory could still be better than the "consensus" view. What matters us whether a theory fits the facts, and there is a wealth of data showing that Keynesian economic theory does not work.


You and your factless assumptions sound tired, Wombat.
 
2012-07-24 12:42:18 PM  

WombatControl: And again, science does not operate by consensus. Saying X number of experts agree is next to worthless. Every economist on the planet could agree on something save one, but that one economist's theory could still be better than the "consensus" view. What matters us whether a theory fits the facts, and there is a wealth of data showing that Keynesian economic theory does not work.


Actually, science works by evidence-based consensus. The consensus can change, if one person can come up with strong enough evidence that the mainstream view is wrong, but think about what falsifiability means. You can test a hypothesis to the point that it would be perverse to withhold agreement, but you cannot "prove" a statement. The decision as to when a theory is sufficiently tested to become the basis for future work is consensus-based among scientists in the appropriate field.

And by the way - if you're facing a decision that is affected by a scientific field, your odds of making the correct decision are far better if you go with the 99.99% consensus instead of the lone guy yelling that he's the only one who is correct. There have been historical cases where the lone guy was correct, but they're famous for a reason.

Don't believe me? Think about it this way: Would you choose the "Christian Scientist" treatment for your next appendicitis instead of surgery. Would it make you question your decision if the Christian Scientists showed you a wealth of anecdotes* all indicating the superiority of their treatment?

*Yes, I know I'm using anecdotes here and you said "data" in your post, and anecdotes =/= data, but let's just say if there was a "wealth" of data clearly showing that Keynesian economic theory did not work, then the current consensus of economists would not rely on Keynesian theory.
 
2012-07-24 12:44:04 PM  

Null Pointer: born_yesterday: I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

One of the problems is that Austrian Economics eschews all data. So there is nothing to prove or disprove with Austrian Economics (and one of the reasons why Bush Sr. called it 'voodoo economics').


Bush was just referring to Reaganomics / supply-side economics -- at least they try to make positive claims that can be proven or disproven by data. The Austrians are much, much farther outside the ballpark of meaningful economic analysis. I remember someone (possibly on Fark) saying that "The Austrian School is the creation science of economics."
 
2012-07-24 12:47:29 PM  

coeyagi: WombatControl: I know, let's cherry-pick 40 economists who agree on most issues and use that to argue that all economists agree! That's not deceptive, it's science!
...
You and your factless assumptions sound tired, Wombat.


While I disagree with many of Wombat's positions, neither the article nor the link to the study itself provided much reassurance that the sample was in any way representative of any well-defined group of economists. And no, the burden of proof should not be on those who question the results - they should indicate the representativeness of their sample. See my earlier post.
 
2012-07-24 12:50:03 PM  

Arkanaut: Bush was just referring to Reaganomics / supply-side economics -- at least they try to make positive claims that can be proven or disproven by data. The Austrians are much, much farther outside the ballpark of meaningful economic analysis. I remember someone (possibly on Fark) saying that "The Austrian School is the creation science of economics."


in a way, yes. Austrian Econ is based on what they hold to be axiomatic truths of the universe (well, at least of human psychology). If something happens which seemingly disproves Austrian theory, they hold it is either because of errors in data collection, the impossibility of accounting for all variables or because an underlying assumption in the theory is wrong.

Basically, Austrians economists believe that Austrian Economics cannot logically be wrong. Not very helpful especially considering the underlying assumptions are based in the simplification that people always act rationally.
 
2012-07-24 12:51:56 PM  

draypresct: coeyagi: WombatControl: I know, let's cherry-pick 40 economists who agree on most issues and use that to argue that all economists agree! That's not deceptive, it's science!
...
You and your factless assumptions sound tired, Wombat.

While I disagree with many of Wombat's positions, neither the article nor the link to the study itself provided much reassurance that the sample was in any way representative of any well-defined group of economists. And no, the burden of proof should not be on those who question the results - they should indicate the representativeness of their sample. See my earlier post.


You're right, it wasn't representative, it was mostly Ivy League. Elitists! (yawn)

Yeah, I know (yawn), echo chamber of elitist ideas (yawn).

//yawn
 
2012-07-24 01:00:49 PM  

Serious Black: Good point. And the reason they're out of the mainstream views of the Republicans and the Democrats, quite frankly, is because many of those policies would prevent their corporate and stinking rich benefactors from skimming any money off the top.


Yes, I'm sure eliminating rent controls, refusing to increase the minimum wage, eliminating trade tariffs, and continuing to allow outsourcing of jobs overseas are all things that are opposed by powerful corporations and the 'stinking rich'. Do you ever stop to think before you hit the submit button?
 
2012-07-24 01:03:18 PM  

coeyagi: draypresct: coeyagi: WombatControl: I know, let's cherry-pick 40 economists who agree on most issues and use that to argue that all economists agree! That's not deceptive, it's science!
...
You and your factless assumptions sound tired, Wombat.

While I disagree with many of Wombat's positions, neither the article nor the link to the study itself provided much reassurance that the sample was in any way representative of any well-defined group of economists. And no, the burden of proof should not be on those who question the results - they should indicate the representativeness of their sample. See my earlier post.

You're right, it wasn't representative, it was mostly Ivy League. Elitists! (yawn)

Yeah, I know (yawn), echo chamber of elitist ideas (yawn).

//yawn


if your jokes are starting to make you yawn, does that mean you're going to begin sparing the rest of us?
 
2012-07-24 01:06:19 PM  

WombatControl: I know, let's cherry-pick 40 economists who agree on most issues and use that to argue that all economists agree! That's not deceptive, it's science!


Nice catch! Those libby-libs at the University of Chicago couldn't sneak that one by you!
 
2012-07-24 01:06:50 PM  

draypresct: neither the article nor the link to the study itself provided much reassurance that the sample was in any way representative of any well-defined group of economists.


Eh, the opinions expressed in this study are similar to those I've seen reported in other surveys of economists that have been conducted by people with a wide range of views. I dislike the way the article reported the results in a couple of places, but the results seem fairly typical. I recall another survey that had similar results for the stimulus. Virtually all economists agreed that the stimulus reduced unemployment, but that group split about 50/50 as to whether the long term benefits of the stimulus outweighed the long term costs.
 
2012-07-24 01:08:49 PM  

skullkrusher: coeyagi: draypresct: coeyagi: WombatControl: I know, let's cherry-pick 40 economists who agree on most issues and use that to argue that all economists agree! That's not deceptive, it's science!
...
You and your factless assumptions sound tired, Wombat.

While I disagree with many of Wombat's positions, neither the article nor the link to the study itself provided much reassurance that the sample was in any way representative of any well-defined group of economists. And no, the burden of proof should not be on those who question the results - they should indicate the representativeness of their sample. See my earlier post.

You're right, it wasn't representative, it was mostly Ivy League. Elitists! (yawn)

Yeah, I know (yawn), echo chamber of elitist ideas (yawn).

//yawn

if your jokes are starting to make you yawn, does that mean you're going to begin sparing the rest of us?


"Elitism" as a credible threat is a joke to you too? I knew it couldn't just be me, Armond.
 
2012-07-24 01:18:43 PM  

Talondel: draypresct: neither the article nor the link to the study itself provided much reassurance that the sample was in any way representative of any well-defined group of economists.

Eh, the opinions expressed in this study are similar to those I've seen reported in other surveys of economists that have been conducted by people with a wide range of views. I dislike the way the article reported the results in a couple of places, but the results seem fairly typical. I recall another survey that had similar results for the stimulus. Virtually all economists agreed that the stimulus reduced unemployment, but that group split about 50/50 as to whether the long term benefits of the stimulus outweighed the long term costs.


To be clear, in this poll, more than 50% thought the long term benefits were worth it. About 33% weren't sure. Only about 16% thought the long term benefits were not worth it.

So to state that economists were divided "50/50" is unfair, unbalanced, biased, and misleading.
 
2012-07-24 01:21:20 PM  
This is... almost news. Politics has very little to do with facts: it's about the manipulation of perceptions. If it were otherwise, public relations wouldn't be an industry.
 
2012-07-24 01:23:32 PM  

Talondel: draypresct: neither the article nor the link to the study itself provided much reassurance that the sample was in any way representative of any well-defined group of economists.

Eh, the opinions expressed in this study are similar to those I've seen reported in other surveys of economists that have been conducted by people with a wide range of views. I dislike the way the article reported the results in a couple of places, but the results seem fairly typical. I recall another survey that had similar results for the stimulus. Virtually all economists agreed that the stimulus reduced unemployment, but that group split about 50/50 as to whether the long term benefits of the stimulus outweighed the long term costs.


I'm not an economist, and haven't kept up on the economist surveys. I was surprised by the claim that economists are all substantially in agreement on these complex issues (it would be really neat if this were true), but then I was disappointed by the poor reporting and/or scholarship of the study in question.

You mentioned a number of surveys of economists conducted by people with a wide range of views (I'm guessing these were surveys on the stimulus and other similar subjects). Have you seen a good summary that puts these together?
 
2012-07-24 01:27:30 PM  

Talondel: Serious Black: Good point. And the reason they're out of the mainstream views of the Republicans and the Democrats, quite frankly, is because many of those policies would prevent their corporate and stinking rich benefactors from skimming any money off the top.

Yes, I'm sure eliminating rent controls, refusing to increase the minimum wage, eliminating trade tariffs, and continuing to allow outsourcing of jobs overseas are all things that are opposed by powerful corporations and the 'stinking rich'. Do you ever stop to think before you hit the submit button?


To be perfectly honest, I try to avoid thinking at all costs. Thinking hurts too damn much. I'd rather just parrot Rush's latest talking points.
 
2012-07-24 01:28:21 PM  

jodaveki: This is... almost news. Politics has very little to do with facts: it's about the manipulation of perceptions. If it were otherwise, public relations wouldn't be an industry.


To be clear, on economic matters, the Democratic Party is offering solutions well in comportment with mainstream economic theory. The Republican Party is offering anti-government ideology at odds with mainstream economic theory. Thus, the only side which is "manipulating perceptions" to sell the view that its economic policy has strong intellectual backing is the right.

Sorry, conservatives. Ayn Rand's histrionic screeds do not constitute "solid intellectual backing." Among the many things she was not, she was not an economist.
 
2012-07-24 01:34:54 PM  

draypresct: I was surprised by the claim that economists are all substantially in agreement on these complex issues (it would be really neat if this were true),


The areas economists disagree differ from those in which laypeople disagree. Economists widely agree, for example, that deficit spending to prop up aggregate demand during an economic downturn is good policy. They even agree that both tax cuts and spending increases are suitable for that purpose. They disagree over whether tax cuts or spending increases are more stimulative.

By contrast, the right is selling the proposition that deficit spending itself is the problem, and that the proper response to economic downturn is austerity. I'll grant, I haven't studied economics in depth, but I would describe myself as an informed layman on the subject. The idea that we should balance the budget now, while politically popular, contradicts everything I understand about economics.
 
2012-07-24 01:45:26 PM  

bugontherug: By contrast, the right is selling the proposition that deficit spending itself is the problem, and that the proper response to economic downturn is austerity.


They only argue that when black man who plays for Team Donkey is in the oval office. They've pretty much adored it when Reagan was in office.
 
2012-07-24 02:00:16 PM  

bugontherug: jodaveki: This is... almost news. Politics has very little to do with facts: it's about the manipulation of perceptions. If it were otherwise, public relations wouldn't be an industry.

To be clear, on economic matters, the Democratic Party is offering solutions well in comportment with mainstream economic theory. The Republican Party is offering anti-government ideology at odds with mainstream economic theory. Thus, the only side which is "manipulating perceptions" to sell the view that its economic policy has strong intellectual backing is the right.

Sorry, conservatives. Ayn Rand's histrionic screeds do not constitute "solid intellectual backing." Among the many things she was not, she was not an economist.


Wrt Ayn Rand, agreed.

Wrt the manipulation of perceptions, both sides do it, regardless of fact. That's politics. The climategate debacle is a perfect example: the damning email was about excluding a paper because of its lack of rigor in methodology, its skewed results and that, if included in the main body of work, there would arise the perception that there was debate on a specific point, when more than a preponderance of the evidence clearly demonstrated consensus. The email author's justifications were in private correspondence precisely because their author knew both how the inclusion & exclusion could be viewed politically, even though the facts were on his side.

While one party may have the facts on its side, how it manages the perception of those facts determines the success of its attempts to implement policy based on them. That has always been the nature of politics.
 
2012-07-24 02:05:33 PM  

FTA:

The same panel of economists was almost unanimous in agreeing that "long run fiscal sustainability in the U.S. will require cuts in currently promised Medicare and Medicaid benefits and/or tax increases that include *higher taxes on households with incomes below $250,000.*" Only one in 10 was uncertain. None objected.

So the panel obviously disagrees with a precept of Obama. Obama says we can sustain Medicaid and Medicare while only raising taxes on those earning more than $250,000. The economists say you must either cut Medicare (a cut to what is "currently promised", not even Paul Ryan's people propose that), or raise taxes on the middle class. Obama says we can get by doing neither.

The article goes full tilt emphasizing how much the economists disagree with Republicans, just read it:
Angry Republicans have pushed their representatives to adopt positions that are at odds with the best of modern economic thinking.
However there is no similar condemnation of the Democrats' view that middle class taxes can be left alone. This too is "at odds with the best of modern economic thinking."

The survey and the economists who responded to it seem neutral, but liberal article is liberal.
 
2012-07-24 02:07:16 PM  

bugontherug: The areas economists disagree differ from those in which laypeople disagree. Economists widely agree, for example, that deficit spending to prop up aggregate demand during an economic downturn is good policy. They even agree that both tax cuts and spending increases are suitable for that purpose. They disagree over whether tax cuts or spending increases are more stimulative.

By contrast, the right is selling the proposition that deficit spending itself is the problem, and that the proper response to economic downturn is austerity. I'll grant, I haven't studied economics in depth, but I would describe myself as an informed layman on the subject. The idea that we should balance the budget now, while politically popular, contradicts everything I understand about economics.


You'd be fairly correct. A fair amount of discussion that occurs tends to be more toward the question of the size of policy impacts. Empirical economic work gives us sign and significance of results, but due to the myriad of problems that get introduced in much of the statistical analysis, the exact numerical results tend to be questioned and debated over. This is why economists don't always see eye-to-eye when comparing two different policies. We may agree that they both provide the same positive or negative result, but not necessarily agree on which policy results in a greater welfare gain or loss.
 
2012-07-24 02:07:19 PM  

Talondel: While the main point of the article, that there is widespread agreement among economists on a number of issues, the article itself is misleading. It discusses points of agreement among economists that Republicans disagree with, and it discusses points of agreement among economists that *both* parties disagree with, but ignores those areas where there is broad consensus among economists that only Democrats disagree with.

For example, here's a list of ten things that have a broad base of support among economists.

Rent control limits quantity/quality of housing 93 %
Tariffs and quotas reduce economic welfare 93 %
The United States should not restrict employers from outsourcing work to foreign countries. 90 %
Floating exchange rates are effective international monetary policy 90 %
The United States should eliminate agricultural subsidies 85 %
The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged 85 %
Large federal deficits adversely affect the economy 83 %
Welfare should be administered as a negative income tax 79 %
A minimum wage increases unemployment among young and unskilled workers 79 %
Taxes and permits are a better way to control pollution than pollution ceilings 78 %

Note that at least three of those (indicated in bold) are issues that Democrats would not support, despite broad support from economists, but which Republicans likely would. A couple (noted in italics) are issues neither party would support.


But Democrats aren't trying to support those on economic reasons. We know that if you could employ someone at $.10/hr, you'd probably end up with a few more people with jobs. We just don't think that someone should be wasting their time working for $.10/hr.

Rent control does limit the quality and quantity of housing, but it's generally only done in places where the quantity is limited anyway. So you get lower quality housing, but you also get lower rent, which helps those people making $.10/hr.

Going against the advice of the economists is fine. The issue is that Republicans are misrepresenting the advice of the economists. The Republicans not making tradeoffs with non-optimal economic conditions in exchange for some societal benefit. The Republicans are just doing crazy stuff.
 
2012-07-24 02:12:07 PM  

bugontherug: draypresct: I was surprised by the claim that economists are all substantially in agreement on these complex issues (it would be really neat if this were true),

The areas economists disagree differ from those in which laypeople disagree. Economists widely agree, for example, that deficit spending to prop up aggregate demand during an economic downturn is good policy. They even agree that both tax cuts and spending increases are suitable for that purpose. They disagree over whether tax cuts or spending increases are more stimulative.

By contrast, the right is selling the proposition that deficit spending itself is the problem, and that the proper response to economic downturn is austerity. I'll grant, I haven't studied economics in depth, but I would describe myself as an informed layman on the subject. The idea that we should balance the budget now, while politically popular, contradicts everything I understand about economics.


Re: austerity during a downturn, what you've said matches my own (vague, non-expert) impression of current economic theory. I don't know how many of the other issues mentioned in the article have an actual consensus position from a representative sample of mainstream economists.
 
2012-07-24 02:19:21 PM  

bugontherug: So to state that economists were divided "50/50" is unfair, unbalanced, biased, and misleading.


Which is why I said the results were 'similar' and not 'identical', which is a distinction I'm confident even you can grasp. They're similar in that (nearly) all economists agree that stimulus reduces unemployment, but that there is less agreement regarding whether or not the benefits outweigh the costs.
 
2012-07-24 02:22:10 PM  

seanpg71: But Democrats aren't trying to support those on economic reasons. We know that if you could employ someone at $.10/hr, you'd probably end up with a few more people with jobs. We just don't think that someone should be wasting their time working for $.10/hr.

Rent control does limit the quality and quantity of housing, but it's generally only done in places where the quantity is limited anyway. So you get lower quality housing, but you also get lower rent, which helps those people making $.10/hr.

Going against the advice of the economists is fine. The issue is that Republicans are misrepresenting the advice of the economists. The Republicans not making tradeoffs with non-optimal economic conditions in exchange for some societal benefit. The Republicans are just doing crazy stuff.


They're misrepresenting the advice of the economists, yes, when it comes to things we've already done, like the bank bailout and the stimulus. However, when it comes to things we might do in the future, they agree with 9 out of the 11 things Talondel listed, while Democrats, on a good day, might agree with 8 at most. What Talondel did not list is the efficacy of further across-the-board tax cuts, without cutting spending by an equal amount, in growing the economy. That is the one thing Republicans promise to do in the future that can fairly be categorized as "crazy stuff" from an economic perspective, while the Democrats seem to have many more deficiencies with the precepts laid out by Talondel.
For instance, both a pollution tax scheme and a pollution cap scheme are likely to reduce pollution, but one is favored by economists and one is not. Democrats consistently ignore the advice of economists and go the cap route instead of the tax route. Why?
 
2012-07-24 02:24:53 PM  
Just as it was humorous for the Romney campaign to try to use Politifact and factchecker.org to back them up, it is equally humorous for Democrats and liberals to try to hang their hats on consensus among economists.
 
2012-07-24 02:24:58 PM  

seanpg71: But Democrats aren't trying to support those on economic reasons.


Democrats support those ideas because they believe they will help the working poor. I recognize that reasonable minds may differ, but that sounds like an 'economic reason' to me. Economists believe that those policies actually end up hurting the working poor, not helping them. The policy is misguided no matter what the underlying intent.

Your argument seems to be to be more "Democrats support bad economic policies while having good intentions, while Republicans support bad economic policies while having bad intentions." That's a fine argument to make, and it's probably true. I just don't particularly care what the politician's motivation is, I only care about the policies they support. Politicians that support bad polices with good intentions are no better (and sometimes worse) then politicians that support bad policies with bad intentions.
 
2012-07-24 02:31:19 PM  
JMK is the climate change of economics: a tiny group of well-funded idiots is convinced that if they keep denying objective reality loud enough, that counts as "controversy".
 
2012-07-24 02:40:18 PM  
Hey Talondel, does the EITC count as "Negative Income Tax," and if not why?
 
2012-07-24 02:42:21 PM  

skullkrusher: Not very helpful especially considering the underlying assumptions are based in the simplification that people always act rationally.


The statement is false. You're probably confusing the claim with some Chicago school junk. The basic assumption used by the Austrians is that "people always act purposefully"

A person forms a goal, and then proceeds to take actions which they believe will bring about the goal. These actions may succeed or fail in realizing the end. They may fail because the person analyzes his information incorrectly or only has access to incomplete or false information. A person might also succeed in spite of the same handicaps.

This is in clear contrast to the physical sciences where phenomenon occur without purpose. Constants exist and can be used to fully describe cause and effect. An object falling in a vacuum on earth always accelerates at 9.8 meters per second squared. This result comes from the mass of the earth, which is easy to measure, the universal gravitational constant which doesn't change, and a math formula. However, economics has no constants, and any proposed descriptive formula is going to contain some variables which are either prohibitively difficult or literally impossible to measure. The result can be summarized with a common phrase: "Garbage in, garbage out." Evidence supporting this summary takes the form of policies based on "economics as a physical science" blowing up the economy repeatedly for almost a century.

If it were possible to use math to centrally plan the economy then they would have succeeded by now.
 
2012-07-24 02:46:47 PM  

Larofeticus: The statement is false. You're probably confusing the claim with some Chicago school junk. The basic assumption used by the Austrians is that "people always act purposefully"


yes, I suppose that is the root. People are not acting randomly. However, do they not assume that that purpose is driven by rational self interest?
Without that additional assumption, purposefulness becomes randomness.
 
2012-07-24 03:03:55 PM  

Talondel: seanpg71: But Democrats aren't trying to support those on economic reasons.

Democrats support those ideas because they believe they will help the working poor. I recognize that reasonable minds may differ, but that sounds like an 'economic reason' to me. Economists believe that those policies actually end up hurting the working poor, not helping them. The policy is misguided no matter what the underlying intent.

Your argument seems to be to be more "Democrats support bad economic policies while having good intentions, while Republicans support bad economic policies while having bad intentions." That's a fine argument to make, and it's probably true. I just don't particularly care what the politician's motivation is, I only care about the policies they support. Politicians that support bad polices with good intentions are no better (and sometimes worse) then politicians that support bad policies with bad intentions.


Look at these two statements:
A minimum wage increases unemployment among young and unskilled workers.
Rent control limits quantity/quality of housing.


They're similar to saying that safety and emissions regulations make cars more expensive. It is a true statement. However, that doesn't mean it's good policy to not have such regulations. It simply means you need to take into account the negative effects of them and to not make the regulations too extreme.

Sure, you could lower unemployment by dropping the minimum wage, and you can increase unemployment by raising it. But that doesn't necessarily mean that would help the economy to remove it and that statement doesn't suggests that economists think it would help the working poor to do so either.
 
2012-07-24 03:54:36 PM  

I alone am best:
Well, the fact that they had slaves kind of made the whole thing moot no? The only people making money where the people who owned the production, and they literally owned the whole thing including the labor. It would be better to look at 1980-1994 to see where supply side did fine. It just stopped working when we eliminated the foundation of the economy by allowing manufacturing jobs to be exported easily. Then loss of income was trickle up.


*snerk*

My sarcasm meter assploded.
 
2012-07-24 04:17:27 PM  

Talondel: While the main point of the article, that there is widespread agreement among economists on a number of issues, the article itself is misleading. It discusses points of agreement among economists that Republicans disagree with, and it discusses points of agreement among economists that *both* parties disagree with, but ignores those areas where there is broad consensus among economists that only Democrats disagree with.

For example, here's a list of ten things that have a broad base of support among economists.

Rent control limits quantity/quality of housing 93 %
Tariffs and quotas reduce economic welfare 93 %
The United States should not restrict employers from outsourcing work to foreign countries. 90 %
Floating exchange rates are effective international monetary policy 90 %
The United States should eliminate agricultural subsidies 85 %
The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged 85 %
Large federal deficits adversely affect the economy 83 %
Welfare should be administered as a negative income tax 79 %
A minimum wage increases unemployment among young and unskilled workers 79 %
Taxes and permits are a better way to control pollution than pollution ceilings 78 %

Note that at least three of those (indicated in bold) are issues that Democrats would not support, despite broad support from economists, but which Republicans likely would. A couple (noted in italics) are issues neither party would support.


This represents much of what I came here to say. I don't think Democrats or Republicans have a higher score with regard to listening to Economists. Perhaps Republicans work more from a basis of political manipulation and blind idealism nowadays, but I would say much of what we've done over the recent decades is to move to the Right with regards to eliminating some 'well intentioned' but ultimately detrimental policies set in place by the old Left, whom you don't really hear form anymore. You don't, for example, see many Democrats suggest fixing the price of oil, or advocating protectionism and high tariffs in trade, much less more extreme reforms. The ideologue, Marxist left-wing from 100 years ago has largely gone the way of the Dodo. We're all capitalists now.
 
2012-07-24 04:17:34 PM  
Hmm, given how little use current economics seems to be in any real world applications, if they all basically agree that suggests it is pretty much a dead end and should be abandoned as a discipline. Maybe someone will rediscover it later but coming from a different direction and find something that is actually useful.
 
2012-07-24 04:20:28 PM  

SnakeLee: Eapoe6: That article was a tough read. The editorial opinion of Bloomberg is a tough pill to swallow.

I'll interpret.

"We sold everything for a paper scam that is about to go belly up in a big way, but we want to keep you calm until the election. Here are some well-paid academic opinions about how creating money and handing it to banks is a great idea. We just need to keep the money we took from your paychecks and cut the services we told you we were saving it for. The well-paid experts who appear on television need to steer the debate toward not "if" the banks should get more stimulus but "How Much?" should the banks get. Your taxes need to increase too. "

No it wasn't. You may need to take some reading comprehension classes and come back to it. Did you even try to read it?


Shhhhh, little one. Turn on your TV and drift off to sleep. The adults have the helm now.
 
2012-07-24 05:16:09 PM  

GentDirkly: Hey Talondel, does the EITC count as "Negative Income Tax," and if not why?


Different economists have used the phrase 'Negative Income Tax' to refer to different things. Friedman proposed a NIT as part of his proposed flat tax reforms, but opposed the EITC. However, I think most when most economists refer to a NIT they're referring to any system of progressive taxation where people at the bottom of the income scale get back more money from their refund than they paid in. Under a NIT, people with zero or near zero earned (i.e. non-government) income do not get this refund. The EITC has the word 'earned' in the name, but some people with no 'earned' income are still eligible under certain circumstances. So the EITC has most of the features of a NIT but not all, depending on whose definition you use.
 
2012-07-24 05:58:06 PM  

madgonad: born_yesterday: I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

It is extremely difficult to 'control' for economic factors. You can't just 'bottle-up' part of the economy and see what happens if you change something. The closest thing we have to this in the US is analyzing the impact of changes within different states.
For example - Texas has a large supply of low-income workers, favorable tax rates (especially for business), and large revenue streams from exporting energy. These factors helped get them out of the recession quicker. This happened even more in the Dakotas which saw change occur faster because the population was so low. A really interesting state to watch right now is Kansas. They just changed their income taxes so that only the poor and middle class need to pay them. The wealthy and business owners can actually avoid paying state taxes on income. It will be interesting to watch how this impacts the economy of the state and how the population changes to take advantage of it.


www.titaniumteddybear.net

I don't see it on there...
 
2012-07-24 06:03:36 PM  

born_yesterday: The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.


I always explain it like this:

The laws of economics are constructs invented by man to explain, predict and record collective human behavior. What that means is that economics is a number-crunching science much like physics, filling in values and numbers and formulas in an impossibly massive equation. Unlike physics, however, the mathematics of economics don't always work the way we think they will because they are subject to human farking behavior.

So we don't actually know what that equation looks like. We have general ideas of what parts of it look like and how it operates, but no one understands the complete, big picture to mathematical clarity, such that when we make small adjustments to the equation like changing interest rates or deregulating investment brackets, the results surprise us. Because they're almost nothing like what we predicted would happen. Not even supply and demand works the way it should.

Economics is simultaneously a hard and soft science. The changes people make to the great economics algorithm are always blind, usually self-serving, and won't work the same way forever.

There are men who come forth every now and then -- Keynes, Friedman, Greenspan, etc -- who propose theories and write treatises on how to manipulate the equation to make good things happen, and people put these theories to the test...and the theories always get things temporarily right and partly wrong, but no theory ever gets it completely right.
 
2012-07-24 06:11:35 PM  

Ishkur: The laws of economics are constructs invented by man to explain, predict and record collective human behavior. What that means is that economics is a number-crunching science much like physics, filling in values and numbers and formulas in an impossibly massive equation. Unlike physics, however, the mathematics of economics don't always work the way we think they will because they are subject to human farking behavior.


Your post looked informative, and it was probably in my best interests to read it, but there were lots of shorter, cheaper, faster posts, so I read those instead.

/But seriously, well put, and thanks
//Have you favorited already because of expertise in religious history
 
2012-07-24 07:25:28 PM  

impaler: Can't_Think_Of_A_Name: The problem in economics is that you can't run a good experiment.

Until now...

Massively multi-player online games are finally a means for economists to test theories scientifically.


Specific theories that can be applied(Set the game tolerances). Check
Irrational markets based on human behavior(Human run markets). Check
Ability to create multiple simultaneous scenarios(Different servers). Check

It sounds like it might be time for someone to write a thesis and beg someone access to create special private servers specifically to collect data to test economic theories. I'm sure if they used the right phrase(tax-write off), then it shouldn't be a problem.

/That sounds like a grad school project though.
 
2012-07-24 07:39:52 PM  

Can't_Think_Of_A_Name: born_yesterday: I have often wondered about this point, having only a limited background in economics.

The physical sciences rely on theory being affirmed by experimentation. Can't economists point to examples of the implementation of a law and the consequences that follow? I'm guessing they can't, or that's where arguments arise, due to it being an open system with outside factors.

Or, I could just read the damn article, and see if that helps.

The problem in economics is that you can't run a good experiment. We never change just one thing at once, unexpected events come up, and so on. So even if you have a pretty clear cut change in, say, tax policy and you compare five years of economic data on each side of the change, you have to include the volcano that exploded in year 8 and the election in year three and so on.

/DNRTFA


Africa provided us with wonderful opportunities to conduct experiments, and we wasted them on a Rick Romero discovery that shoveling $$$ into an economy doesn't work if - and this is the discovery - the government is corrupt.
 
2012-07-24 07:42:08 PM  

bugontherug: jodaveki: This is... almost news. Politics has very little to do with facts: it's about the manipulation of perceptions. If it were otherwise, public relations wouldn't be an industry.

To be clear, on economic matters, the Democratic Party is offering solutions well in comportment with mainstream economic theory. The Republican Party is offering anti-government ideology at odds with mainstream economic theory. Thus, the only side which is "manipulating perceptions" to sell the view that its economic policy has strong intellectual backing is the right.

Sorry, conservatives. Ayn Rand's histrionic screeds do not constitute "solid intellectual backing." Among the many things she was not, she was not an economist.


Don't confuse Ayn Rand with Supply-Side Economics. It's like saying Communism and Socialism are the same.
 
2012-07-24 07:45:57 PM  

Benni K Rok: impaler: Can't_Think_Of_A_Name: The problem in economics is that you can't run a good experiment.

Until now...

Massively multi-player online games are finally a means for economists to test theories scientifically.

Specific theories that can be applied(Set the game tolerances). Check
Irrational markets based on human behavior(Human run markets). Check
Ability to create multiple simultaneous scenarios(Different servers). Check

It sounds like it might be time for someone to write a thesis and beg someone access to create special private servers specifically to collect data to test economic theories. I'm sure if they used the right phrase(tax-write off), then it shouldn't be a problem.

/That sounds like a grad school project though.


Games where you can buy and sell resources needed for building stuff tend to have economics that approach looking like real-world economics. They'd have to design a game with that in mind - it could work, but seems unlikely that they would bother designing a commercially viable game that closely models economics. I wish they would.
 
2012-07-24 07:59:19 PM  

vygramul: Benni K Rok: impaler: Can't_Think_Of_A_Name: The problem in economics is that you can't run a good experiment.

Until now...

Massively multi-player online games are finally a means for economists to test theories scientifically.

Specific theories that can be applied(Set the game tolerances). Check
Irrational markets based on human behavior(Human run markets). Check
Ability to create multiple simultaneous scenarios(Different servers). Check

It sounds like it might be time for someone to write a thesis and beg someone access to create special private servers specifically to collect data to test economic theories. I'm sure if they used the right phrase(tax-write off), then it shouldn't be a problem.

/That sounds like a grad school project though.

Games where you can buy and sell resources needed for building stuff tend to have economics that approach looking like real-world economics. They'd have to design a game with that in mind - it could work, but seems unlikely that they would bother designing a commercially viable game that closely models economics. I wish they would.


That sounds like a lot of grad theses over the course of a few years. Hence why I also used the phrase tax-write off.

I don't know how well it would work with finite resources over the history of the project. Uneven distribution of resources, uneven distribution of useable property. It could be a very interesting, complex, and I'm pretty sure it wouldn't be commercially viable. It probably would also be free to play, simply because I don't see people paying for it. Why limit it to one university, or even one state. I'm sure the data that would be gathered from different areas in the US, or even the world would be... interesting, to say the least.

/Or it might be viable, provided you can figure out how to do an even larger scale than Simcity 5.
//Simeconomy... it sounds interesting.
 
2012-07-24 10:51:33 PM  
Isn't there a report from some GOP group saying the DOD cuts at the end of the year would eliminate 3 million jobs.

Hmmm, so the Republicans are admitting that government spending creates jobs. This article is spot on, there's no philosophy debate: spending creates jobs, cutting spending slows economic activity.

Simple.
 
2012-07-24 11:08:24 PM  

Bob16:

Eherenrichs point exactly. I laughed my ass off when I watched her lecture on YouTube about the book. The head of the real estate division of Lehman told his boss in 2005 that it looked like the real estate market my be headed for a downfall. They immediately fired him and "sent him to the cornfield" for not thinking happy thoughts. At least they didn't turn him into a Jack in the box.


Ehrenreich... this is the gal that wrote a book about how hard it is to get a job, but smoked a bunch of pot before applying to work retail? Y'know, the type of job that, as she noted in her first chapter, tends to require drug tests?

Yeah, I'm not crediting her with an overabundance of intelligence.
 
2012-07-25 12:34:47 AM  

xria: Hmm, given how little use current economics seems to be in any real world applications, if they all basically agree that suggests it is pretty much a dead end and should be abandoned as a discipline. Maybe someone will rediscover it later but coming from a different direction and find something that is actually useful.


Trolling? I mean, I get discouraged with the imperfections of the 'dismal science' as much as anyone, but come on. What a improvement we could make in the world if everyone, especially those in charge, could be made to understand a few simple economic principles: supply and demand, the function of prices, etc,
 
2012-07-25 01:32:00 AM  

fusillade762: I don't see it on there...


it's a hybrid of applied psychology and math

economists think it's more of the latter when it's actually more of the former
 
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