Sunday, June 27, 2010

Why FLG Doesn't Consider Himself An Economics Blogger

FLG writes about economics topics often and just as often makes strong statements, but he doesn't consider himself an economics blogger, mostly because he just doesn't know enough about the topic. And then, from Greg Mankiw's blog, FLG discovers this paper, which articulates roughly how FLG feels:
The following is a letter to open-minded consumers of the economics blogosphere. In the wake of the recent financial crisis, bloggers seem unable to resist commentating routinely about economic events. It may always have been thus, but in recent times, the manifold dimensions of the financial crisis and associated recession have given fillip to something bigger than a cottage industry. Examples include Matt Yglesias, John Stossel, Robert Samuelson, and Robert Reich. In what follows I will argue that it is exceedingly unlikely that these authors have anything interesting to say about economic policy. This sounds mean-spirited, but it’s not meant to be, and I’ll explain why.


Deficits, short-term interest rate targets, sovereign debt are all chewed over with
a level of self-assuredness that only someone who doesn’t know more could. The list of those exhibiting this zest also includes, in addition to those mentioned above, some who might know better. They are the patron saints of the “Macroeconomic Policy is Easy: Only Idiots Don’t Think So” movement: Paul Krugman and Brad Delong. Either of these men will assure their readers that it’s all really very simple (and may even be found in Keynes’ writings).

FLG doesn't agree, however, that the conversation should be limited to experts:
writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams), cannot meaningfully advance the discussion on economic policy. Taken literally, I am almost certainly wrong. Some of them have great ideas, for sure. But this is irrelevant. The real issue is that there is extremely low likelihood that the speculations of the untrained, on a topic almost pathologically riddled by dynamic considerations and feedback effects, will offer anything new. Moreover, there is a substantial likelihood that it will instead offer something incoherent or misleading. Note also that intelligence is not the issue. Many of those I am telling you not to listen to will more than successfully be able to match wits, in any generalized sense, with me. This is irrelevant. The question is: can they provide you, the reader, with an internally consistent analysis of a dynamic system subject to random shocks populated by thoughtful actors whose collective actions must be rendered feasible? For many questions, I and my colleagues can, and for those that the profession cannot, the blogging crowd probably can’t either.

FLG thinks economics bloggers or people, like himself, who just blog about economics some of the time have something useful to offer the conversation, and that is writing about economics without using terms like dynamic considerations and feedback effects. Moreover, the experts may advance the conversation about what the policy options are and their costs and benefits, but the public does need to be involved and informed of the menu of choices offered by the experts for a variety of reasons, not the least of which is that the economics discipline contains normative assumptions, and consequently all of the people to whom the author wants to say the conversation ought to be limited are influenced by them.

FLG thinks this is wise advice, and he always tries to adhere to it:
my hope is that the broader public will ask for a slightly higher bar when it comes to economics, rather than self-selecting into blogs that merely confirm half-baked views that might have been acquired from elsewhere. And I hope that non-economists who write about economics start routinely to do so in a way that references and discusses the premises that lead to particular conclusions about a given issue. Economics is full of this sort of “if-then” knowledge, which, if communicated well, could significantly sharpen the public discussion. This is not asking a lot, it is asking just enough.

To sum up:
FLG agrees that people, including Krugman and Delong, too blithely address macroeconomic policy issues. On the other hand, the answer isn't to leave this to a sacred band of experts who police themselves. Lastly, FLG always tries to explicitly place the assumptions he is operating under on the table.


brad said...

Look: I was taught that even though government budget deficits could boost employment and output in the short run it was wise to balance the budget because:

--a boost to output and employment from deficit spending is a poisoned gift when it produces increases in inflation and still more increases in expected inflation.

--a boost to output and employment from deficit spending is a poisoned gift when it produces a rise in interest rates that crowds out private investment, slowing the long-run growth of the economy and also neutralizing much of what would otherwise be the short-run benefit.

Those were, three years ago, the only reasons people advanced against deficit spending to spur the economy in the short run. Neither of them apply right now. And I haven't seen any of the many stimulus opponents come up with a third reason--other than "we were irrationally exuberant, and so now we must suffer." And that, I think, is the argument of an idiot.

Anonymous said...

Many people objected to the stimulus bill because they thought it was composed of measures that would either be wasteful or take too long to have the desired stimulative effect.* (When the bill failed to produce anything like the results promised by the administration's cheerleaders, the argument suddenly became, well, it should have been bigger. This is the armchair economist's version of "the food's no good and the portions are too small.")

Many people opposed the stimulus bill because they thought various types of tax cuts would have a greater and more immediate stimulative effect than the hodgepodge of spending measures assembled by the Congress. (And it retrospect, this appears likely true, just as Christina Romer's prior work had suggested.)

And today, many people think that a blind devotion to "fiscal stimulus" in the abstract, regardless of its composition and likely consequence on the mid- to long-term performance of the economy, is the true mark of idiocy.
*The same thing happened in 1979, when the Carter Administration's call for a third round of countercyclical public works was rejected once the Congress realized how long it would be before those projects would actually begin.

Anonymous said...

Did you catch this regarding Krugman? Kind of funny actually...

Oh and did catch the latest example of epistemic closure over at the WaPo - Dave Weigel? That one is even funnier.

Mrs. P

Anonymous said...

Herb Stein used to say, with the requisite humility of a really wise man, that economists make predictions about the future because politicians ask them to -- and not because they have any particular gift for doing so.

There's an ancient Zen joke: If you come upon the Buddha in a forest, kill him!

Perhaps we need some new (nonviolent) koan that deals with economists who lack humility.

Anonymous said...

The eco-bloggo-sphere strikes back!


FLG said...


I was totally going along with that post until this:
Unlike Athreya, I don’t judge people by their credentials, but rather by the quality of their arguments. Yglesias is the only person listed above that I read routinely. Although he is much more liberal than I, and we differ on many public policy issues, I find his reasoning ability on economic issues to be superior to the majority of professional economists that I have met or read.

I stopped reading at that point. If Yglesias' economic reasoning is better than the majority of professional economists he's met or read, then I must be better than the majority of John Bates Clark Medal recipients because a lot of what comes off his keyboards is idiotic. I'll admit, some is good stuff, but a lot of it is idiotic.

Anonymous said...

In fairness, there's a somewhat arbitrary connection between an economist's ability to do first-rate, groundbreaking research and his/her ability to write persuasively for a popular audience.

Richard Feynman was not just a great physicist, he was a great explainer. Edward Witten is only half that. The same thing happens in economics and many other fields. The trouble starts when the great explainers aren't the great economists ...

(This sets aside the unanswered question of whether macroeconomics is sufficiently mature to offer useful advice to policymakers in times of crisis.)

FLG said...

The Ancient:

I completely agree about the research versus explaining. Krugman happens to be good at both. The problem with him for me is that he views himself in popular writing as a polemicist first, economist second. Perhaps Mankiw is the same, but I find him less offensive because I tend to agree with his polemics.

The Ancient said...

FLG --

To get back on the nominal topic...

Krugman's "pellucid" style (as Larry Summers recently called it) has always been both a blessing and a curse. It's a blessing when he uses it to explain complicated things that the economics profession more or less agrees on. It's a curse when he employs it to disguise or smooth over important areas of disagreement.

(I linked to that Sachs piece in part because it has all the virtues that Krugman's current writing lacks.)

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