Wednesday, July 7, 2010

Right and Wrong

Paul Krugman illustrates the problem:
A quick note on David Brooks’s column today. I have no idea what he’s talking about when he says,

The Demand Siders don’t have a good explanation for the past two years

Funny, I thought we had a perfectly good explanation: severe downturn in demand from the financial crisis, and a stimulus which we warned from the beginning wasn’t nearly big enough. And as I’ve been trying to point out, events have strongly confirmed a demand-side view of the world.

But there’s something else in David’s column, which I see a lot: the argument that because a lot of important people believe something, it must make sense:

Moreover, the Demand Siders write as if everybody who disagrees with them is immoral or a moron. But, in fact, many prize-festooned economists do not support another stimulus. Most European leaders and central bankers think it’s time to begin reducing debt, not increasing it — as do many economists at the international economic institutions. Are you sure your theorists are right and theirs are wrong?

Yes, I am. It’s called looking at the evidence. I’ve looked hard at the arguments the Pain Caucus is making, the evidence that supposedly supports their case — and there’s no there there.

And you just have to wonder how it’s possible to have lived through the last ten years and still imagine that because a lot of Serious People believe something, you should believe it too. Iraq? Housing bubble? Inflation? (It’s worth remembering that Trichet actually raised rates in June 2008, because he believed that inflation — not the financial crisis — was the big threat facing Europe.)

There are two types of economists right now: There are those that do actual research, examine the past and come to scientific conclusions, and there are those blinded by an ideology that believes everyone but the rich in this country have it too easy. This isn't a straight ideology split (McCain's former economist Mark Zandi has supported more stimulus), but it is most certainly a split between those that have been right, and those that have been wrong.

The economists who have been wrong about just about everything for the past 30 years think that we should focus on reducing the deficit, while the economists who have been largely right are arguing that we needed and continue to need more stimulus.

David Brooks is a moron who thinks the biggest problem our country faces right now is that the poor have it too good. Paul Krugman is a Nobel prize winning economist who has been spot on in predicting the economy over the last 3 years. The idea that the administration has shut out Paul Krugman (and similar minded economists) yet is bending over backwards to please David Brooks is fucking appalling.

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