Monday, March 21, 2011

Re: Conservative Economists Parroting Ridiculous "Dead Ideas" of Right-Wing Ideologues

One of the most impressive accomplishments of the modern right is its ability to generate plausible technical papers to justify conservative tropes that are basically ridiculous.

For example, during last year's campaign it was popular to claim that our economy was weak because of regulatory uncertainty. This made no real sense at all. Our economy is weak because of economic uncertainty: businesses don't have enough customers to make it worth investing in new capacity or hiring new workers, and they aren't sure when or if new customers will appear in the future. Unfortunately, that didn't make for very good campaign trail bashing. Republicans wanted to convince people that the economy was weak because President Obama and congressional Democrats kept passing onerous new regulations that had businesses scared to death, so that's the story they kept repeating ad nauseum.
It never really caught on outside of campaign stump speeches, though, because — well, because it was ridiculous. What to do? Answer: find someone to write a technical paper demonstrating that regulatory uncertainty really is holding back the economy. But who could they get for this job?
Paul Krugman provides the answer: none other than Alan Greenspan.  Krugman's comment after reading the paper:      
I could go through the weak reasoning, the shoddy econometrics that ignores a large literature on business investment and ignores simultaneity problems, etc., etc.. But never mind; just consider the tone.
Greenspan writes in characteristic form: other people may have their models, but he’s the wise oracle who knows the deep mysteries of human behavior, who can discern patterns based on his ineffable knowledge of economic psychology and history.
Sorry, but he doesn’t get to do that any more. 2011 is not 2006. Greenspan is an ex-Maestro; his reputation is pushing up the daisies, it’s gone to meet its maker, it’s joined the choir invisible.     (End of our excerpt from Drum* - read his whole piece HERE.)
Update: Matt Yglesias at "Think Progress" has another instance of deliberate misinformation endorsed as "expert analysis" by one of the most prominent conservative economists - read more about that bit of dishonest "scholarship" HERE.  A more "nuanced" take by Drum, HERE.

*Drum's piece via Brad DeLong, who has also contributed to this critique of Greenspan & Co. - and if you don't get the last bit about "pushing up the daisies...joined the choir invisible" you need to watch the video below, which provides a good metaphor for the disingenuous hucksterism of phony "conservatives" like Greenspan selling ideology as expertise:

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