I'm definitely reading the Macro Memoir. I was a Macro correspondent (for WSJ & Bloomberg) for a decade and boy oh boy. Anyway, it really is refreshing to see an almost-obituary that doesn't celebrate the departed as the Greatest Person Who Ever Lived. The British tradition of being rude to the dead is one I really cherish.
People who hold themselves out as experts are expected to show superior knowledge. The cult of expertise, i.e., the presumed authority of such people, depends upon a certain demeanor that is inconsistent with showing humility. They are expected to affect an unqualified confidence in their prognostications and pronouncements, as Walter Cronkite did in always closing his news show portentously with the words "And that's the way it is." Harry Truman complained of what he called one-hand economists, those who would say "on the one hand, but on the other hand..." Apparently those advising him did have a degree of humility.
2008 avoided "at almost no cost with more stimulus"
Well if you want to call it "stimulus."
With monetary policy that actually, actively, transparently, and credibly sought to engineer above-target inflation until the relative price distortions caused by the crisis were worked out, roughly speaking until full employment was achieved. If it had acted quickly (zero EFFR and massive QE in September, there would have been hardly any recession t all much less a "Great" one (and no TARP and no bank and automobile industry bailouts). Granted that would have been superlative performance and one cannot expect to see that often, yet why expect less?
If the period of low inflation and low employment persisted, as it should not, fiscal policy, acting on a rule of making the NPV of the marginal expenditure = 0, should then have stepped up relief and public investments. How much would depend on just how big and persistent the Fed failure was.
Intellectual thugs are claiming the “T-truth” mantle of science, including social “science” using the word. Because humans have free will, where materials do not, there are human regularities rather than laws/ principles which always work.
This is especially true in economics where, if any Econ law is found about human behavior, those who exploit that law will induce a change in behavior which, after some time and some folks getting rich, will invalidate the law.
Nobody gets rich from the Iron Law of Bureaucracy—so it’s not being invalidated, unfortunately.
The economists getting money & status do so by supporting govt policy & plans, rather than private business plans. So they are actively looking for and producing rationalizations for their Economist status, a big market. More govt, of one form or another, for almost every problem, especially those caused by prior govt.
The USA needs to build more housing, near areas with more jobs, to reduce the problems of young folk trying to buy a house. This has long been known but where is the consensus on what policies are best for building more houses? A clear failure of economics. As are so many.
I don't understand that last paragraph. Any economist will tell you that when demand goes up and supply doesn't, prices increase. And similarly, that when demand goes down and supply doesn't change, prices go down. Thus, the different housing markets in the Boston area and in much of the midwest. They will also tell you that in places like Boston it is hard to increase supply due to restraints caused by zoning, building codes, enviromental laws, etc. So until the economy in eastern Mass. cools considerably, housing prices will be high.
"What policies would be best" is a moral question, and most people think the moral high ground is "don't change my neighborhood", "don't increase traffic in my neighborhood", "that land should stay undeveloped forever", etc. Economists can tell them that leads to higher prices, but they can't force them to change their priorities.
"I don't want any more houses in my neighborhood" IS NOT SCIENCE. It is NOT ECONOMICS. No economist, thug or otherwise, can tell you that you are scientifically wrong. Because that statement is not about economics.
An economist could legitimately say, "You say it is terrible how expensive housing is but you also don't want new development. No new development means housing will continue to be expensive (and maybe even get more expensive). So what do you really want?"
Some of the dislike of economists comes from people wanting impossible things and economists telling them that's impossible.
Yeah, economists often claim too much. "X will lead to a Hicks-Hanson condition where there is enough additional money to compensate the people who lose (even if they never get anything and even if money is only part of what matters)" becomes "X is better."
I think it's worse than just ignoring the downsides. What one sees more often is a pretense or confident claim that the author has considered all the strongest counterarguments and that he's knocked them all down, and that he's weighed all the important downsides, but in combination they don't outweigh the benefits.
I call this "Potemkin Steelmanning." The author may be intentionally or inadvertently claiming to be presenting the actual steel-man, but it's not the real steel-man, it's hollow and still full of straw so still easy to knock over.
The possibility of this type "intellectual foul play" and the obvious temptation to engage in it is why one should always be leery when a proponent of some idea claims to be presenting the best version of his opponents' arguments. The adversarial trial system is based on the insight that one can only really trust an argument to be in its strongest from when presented by a motivated opponent, and not when words are put in the opposition's mouth by the proponent.
And it can get even worse, because often times because of likely severe social penalties, the opponent is not free to give the strongest version of the argument in public under his own name or to articulate and explain the biggest legitimate downsides that may be as important as they are taboo to discuss.
This is "discourse in the shadow of the Guillotine," and has two forms. It is already bad when an author ought to know that the opposition is forced to bite their tongue and announced, "Not hearing any further good objections, I can conclude that *there aren't* any other good arguments against my thesis. Because no one is making them, they must not exist!"
But it is even worse when the author goes further and turns it into a matter of reputation and honor and basically dares opponents to step on landmines or else be publicly embarrassed for being poor intellectuals unable to articulate a defense of their positions. I call this "Pariah Baiting." "You say you still don't agree with me, but you concede all the points I have made thus far, and have made no others on your own behalf, so you have exposed yourself as either dishonest about your true motives or irrationally stubborn in the face of contrary evidence, so, which is it? You say you have secret reasons you are not allowed to say in public that make me wrong, but that's the same kind of thing any intellectual charlatan would say, it's completely unfalsifiable and just a cop-out or a cover story for bad motives that are publicly condemned because they are in fact worthy of condemnation." When not allowed to prove it moves, the only dignified response that doesn't compromise one's integrity is, "Eppur si muove."
The real trouble is that there is no way to tell from the manner or style of argumentation alone whether these arguments are valid or not, fair or foul. Everyone involved has to share some common knowledge about the social framework of taboos and also about which of them are accurate or bogus, but the communicative steps required to converge on common knowledge for the sake of productive discourse are precisely the ones that are being suppressed.
In my opinion this is the most subtle but also most important justification for "free speech" in the context of "academic freedom" (at least in a health and functional academic culture that hasn't already gone to hell) because without it, literally every kind of argument's conclusion must be presented with a disclaimer like the asterisk cut out of Barry Bonds' 762nd home run ball, meaning, "Likely true unless the demonstration otherwise is one of the things one is not allowed to say."
Or, "Thus, as all right-thinking people already know, the earth doesn't move, that is, unless proving it does will get you placed under house arrest, in which case, it might!"
I'm definitely reading the Macro Memoir. I was a Macro correspondent (for WSJ & Bloomberg) for a decade and boy oh boy. Anyway, it really is refreshing to see an almost-obituary that doesn't celebrate the departed as the Greatest Person Who Ever Lived. The British tradition of being rude to the dead is one I really cherish.
People who hold themselves out as experts are expected to show superior knowledge. The cult of expertise, i.e., the presumed authority of such people, depends upon a certain demeanor that is inconsistent with showing humility. They are expected to affect an unqualified confidence in their prognostications and pronouncements, as Walter Cronkite did in always closing his news show portentously with the words "And that's the way it is." Harry Truman complained of what he called one-hand economists, those who would say "on the one hand, but on the other hand..." Apparently those advising him did have a degree of humility.
2008 avoided "at almost no cost with more stimulus"
Well if you want to call it "stimulus."
With monetary policy that actually, actively, transparently, and credibly sought to engineer above-target inflation until the relative price distortions caused by the crisis were worked out, roughly speaking until full employment was achieved. If it had acted quickly (zero EFFR and massive QE in September, there would have been hardly any recession t all much less a "Great" one (and no TARP and no bank and automobile industry bailouts). Granted that would have been superlative performance and one cannot expect to see that often, yet why expect less?
If the period of low inflation and low employment persisted, as it should not, fiscal policy, acting on a rule of making the NPV of the marginal expenditure = 0, should then have stepped up relief and public investments. How much would depend on just how big and persistent the Fed failure was.
I think you will appreciate this post, in which I team up with Friedrich Hayek to explain what's gone so horribly wrong with economics. https://charles72f.substack.com/p/the-pretense-of-knowledge
Intellectual thugs are claiming the “T-truth” mantle of science, including social “science” using the word. Because humans have free will, where materials do not, there are human regularities rather than laws/ principles which always work.
This is especially true in economics where, if any Econ law is found about human behavior, those who exploit that law will induce a change in behavior which, after some time and some folks getting rich, will invalidate the law.
Nobody gets rich from the Iron Law of Bureaucracy—so it’s not being invalidated, unfortunately.
The economists getting money & status do so by supporting govt policy & plans, rather than private business plans. So they are actively looking for and producing rationalizations for their Economist status, a big market. More govt, of one form or another, for almost every problem, especially those caused by prior govt.
The USA needs to build more housing, near areas with more jobs, to reduce the problems of young folk trying to buy a house. This has long been known but where is the consensus on what policies are best for building more houses? A clear failure of economics. As are so many.
I don't understand that last paragraph. Any economist will tell you that when demand goes up and supply doesn't, prices increase. And similarly, that when demand goes down and supply doesn't change, prices go down. Thus, the different housing markets in the Boston area and in much of the midwest. They will also tell you that in places like Boston it is hard to increase supply due to restraints caused by zoning, building codes, enviromental laws, etc. So until the economy in eastern Mass. cools considerably, housing prices will be high.
"What policies would be best" is a moral question, and most people think the moral high ground is "don't change my neighborhood", "don't increase traffic in my neighborhood", "that land should stay undeveloped forever", etc. Economists can tell them that leads to higher prices, but they can't force them to change their priorities.
"I don't want any more houses in my neighborhood" IS NOT SCIENCE. It is NOT ECONOMICS. No economist, thug or otherwise, can tell you that you are scientifically wrong. Because that statement is not about economics.
An economist could legitimately say, "You say it is terrible how expensive housing is but you also don't want new development. No new development means housing will continue to be expensive (and maybe even get more expensive). So what do you really want?"
Some of the dislike of economists comes from people wanting impossible things and economists telling them that's impossible.
Yeah, economists often claim too much. "X will lead to a Hicks-Hanson condition where there is enough additional money to compensate the people who lose (even if they never get anything and even if money is only part of what matters)" becomes "X is better."
I think it's worse than just ignoring the downsides. What one sees more often is a pretense or confident claim that the author has considered all the strongest counterarguments and that he's knocked them all down, and that he's weighed all the important downsides, but in combination they don't outweigh the benefits.
I call this "Potemkin Steelmanning." The author may be intentionally or inadvertently claiming to be presenting the actual steel-man, but it's not the real steel-man, it's hollow and still full of straw so still easy to knock over.
The possibility of this type "intellectual foul play" and the obvious temptation to engage in it is why one should always be leery when a proponent of some idea claims to be presenting the best version of his opponents' arguments. The adversarial trial system is based on the insight that one can only really trust an argument to be in its strongest from when presented by a motivated opponent, and not when words are put in the opposition's mouth by the proponent.
And it can get even worse, because often times because of likely severe social penalties, the opponent is not free to give the strongest version of the argument in public under his own name or to articulate and explain the biggest legitimate downsides that may be as important as they are taboo to discuss.
This is "discourse in the shadow of the Guillotine," and has two forms. It is already bad when an author ought to know that the opposition is forced to bite their tongue and announced, "Not hearing any further good objections, I can conclude that *there aren't* any other good arguments against my thesis. Because no one is making them, they must not exist!"
But it is even worse when the author goes further and turns it into a matter of reputation and honor and basically dares opponents to step on landmines or else be publicly embarrassed for being poor intellectuals unable to articulate a defense of their positions. I call this "Pariah Baiting." "You say you still don't agree with me, but you concede all the points I have made thus far, and have made no others on your own behalf, so you have exposed yourself as either dishonest about your true motives or irrationally stubborn in the face of contrary evidence, so, which is it? You say you have secret reasons you are not allowed to say in public that make me wrong, but that's the same kind of thing any intellectual charlatan would say, it's completely unfalsifiable and just a cop-out or a cover story for bad motives that are publicly condemned because they are in fact worthy of condemnation." When not allowed to prove it moves, the only dignified response that doesn't compromise one's integrity is, "Eppur si muove."
The real trouble is that there is no way to tell from the manner or style of argumentation alone whether these arguments are valid or not, fair or foul. Everyone involved has to share some common knowledge about the social framework of taboos and also about which of them are accurate or bogus, but the communicative steps required to converge on common knowledge for the sake of productive discourse are precisely the ones that are being suppressed.
In my opinion this is the most subtle but also most important justification for "free speech" in the context of "academic freedom" (at least in a health and functional academic culture that hasn't already gone to hell) because without it, literally every kind of argument's conclusion must be presented with a disclaimer like the asterisk cut out of Barry Bonds' 762nd home run ball, meaning, "Likely true unless the demonstration otherwise is one of the things one is not allowed to say."
Or, "Thus, as all right-thinking people already know, the earth doesn't move, that is, unless proving it does will get you placed under house arrest, in which case, it might!"