Clive used to be a reasonable guy; in his mind he probably still is a reasonable guy. But he has misunderstood what it means to be reasonable. He now apparently believes that it means declaring, in all circumstances, that Democrats and Republicans are equally in the wrong, even if the Democrats are talking Econ 101 and the Republicans are being led by the crazy 36.
And it means hysterical attacks on yours truly for actually taking sides in this debate, with the ostensible basis for the denunciation being a wonkish blog post -- it says so in the title -- in which I acknowledge that there is a potential short-run argument for protectionism, while making it clear that I'm not in favor of acting on that argument. He doesn't actually take on my argument; he just insists that the only reason I might possibly have said anything like this is partisan bias, as opposed to an attempt to be intellectually honest.
Speaking of which, Clive and others have, in my view, a fundamentally flawed view of how to defend free trade. They believe that you should scream "Heresy! Sacrilege!" at anyone who even suggests that the world is more complicated than the simple Ricardian model of comparative advantage. But, you know, the world actually is more complicated than that simple model, and I believe that one's case for free trade should be robust enough to stand up to a bit of free thinking -- not sustained by excommunicating anyone who questions orthodoxy, even hypothetically.
Was that piece really hysterical? I believe it is the first time I have ever been called that. One of Paul's commenters accuses me of being Broderish, which is a criticism that makes more sense to me--but it cannot be possible, can it, to be both hysterical and Broderish? I do try to be reasonable, which I know can be infuriating, but as it happens I don't think that "being reasonable means declaring, in all circumstances, that Democrats and Republicans are equally in the wrong". Each side is usually somewhat wrong, I find, but the proportions do vary according to topic. I am very much in the Democratic camp on the stimulus, for instance. I think it is unreasonable, on the other hand, to regard everything Republicans say as definitionally wicked or stupid or both, which is the organising principle of everything Paul writes in the NYT.
As for defending free trade, I don't recall ever shouting "Heresy! Sacrilege!" at anyone who "even suggests that the world is more complicated than in Econ 101". Well, perhaps I have, but only as a joke, I promise. (Odd by the way that Paul thinks Econ 101 is all you need to talk about the stimulus intelligently, but far too simplistic when it comes to trade.) In fact I agree with Paul about free trade: in the real world, theoretical reservations aside, he is for it and so am I. The problem is that he can't just say that, because most of the progressive Democrats who adore his writings do not want to hear it. He is too good an economist, and too honest a person, to advocate protectionism, so he does the next best thing. He equivocates.
I think Paul is disingenuous (there I go again, more hysterics) when he says that the blog-post in question makes it clear he is not in favour of acting on the short-run argument for protection. You be the judge. In my view, he says it is all very complicated. He kind of supports free trade in an ideal world--that would be an Econ 101 world--but there are circumstances, which happen to be very like today's circumstances, in which protection could make sense. This "needs to be taken seriously", and the case gets stronger if optimal macro co-ordination is not forthcoming (which it won't be). Ask any Democratic congressman what Paul's advice on "Buy American" is. The answer will not be, "Don't do it." It will be, "The most brilliant economist I know of thinks there's a case."
My exchange with Robert Barro was via email. With his permission, here it is:
>>>>>>>>>>
Clive,
I hope that all is well. It seems from your writing that I at least had the beneficial effect of neutralizing Krugman. I am not sure what you mean by "consensus." You don't think it's pretty wild to have a multiplier of 1.5, so that government spending is not only free, it has negative costs? The only informative empirical work I know of (from Valerie Ramey and my own work) finds multipliers associated with defense spending that are positive but less than one. In Valerie's work, this shows up as a negative effect from added government military purchases on private consumer spending. Multipliers for other forms of government spending are imprecisely determined but are not significantly different from zero. Actually, I hope that my current long-term empirical project will shed more light, including macro effects from changes in marginal tax rates.
You want me to ignore good economic theory and empirical analysis and pretend that a voodoo multiplier above one should be respected as a "consensus?"
-- Robert
>>>>>>>>>>
Hi Robert.
Thank you for writing. It is good of you to take the trouble.
If we are to have Paul doing what he does in the NYT, it might be better to have you writing in a similarly gladiatorial way than not at all. But I do think it would be best of all if you, Paul, and other scholars of such distinction gave a little more thought to the harm that this unscholarly politicised jousting can do.
Rather than asking them to think, Paul gives comfort to the massed ranks of liberal economic illiterates--and you do the same for their conservative equivalents. In the middle, where there are open minds willing to be enlightened, the typical response is to switch off. I think that this is a shame. Needless to say, I am not arguing that you (or Paul) should be untrue to your own views when writing for a wider audience, only that you should not deny or dismiss the professional consensus, such as it is, out of hand, or advance your own views with deliberately exaggerated certainty.
Yes, I do think there is a broad consensus on fiscal policy--one that you, I don't need to say, have helped shape. It is that fiscal policy can deliver a stimulus under certain circumstances, albeit not as powerfully or reliably as was widely believed pre-Barro. The consensus has absorbed your contribution by advocating counter-cyclical fiscal stimulus more cautiously than before, and with much closer attention to the implications for public debt and financing. Of course you would go further--and everybody who cares about this subject will pay close attention to your ongoing research. You may very well push the consensus further yet. But, for the moment, you can press for greater caution in attempting fiscal stimulus, or even argue against it altogether, without saying that advocates of stimulus under present circumstances--including economists like Paul or Larry or Christina Romer, whom I know you respect--are dealing in voodoo economics.
By the way, is it helpful to say that a multiplier of 1 implies that government spending is free? The implication would be that even a multiplier of 0.5 (which you seem willing to contemplate) would buy you real resources at half-price. Obviously public spending eventually has to be paid for, in full, one way or another--which is true regardless of the multiplier. It is quite another thing to say that a multiplier of more than zero commits you to the view that we can have a free lunch. That is a debating point, something to please one's allies and annoy one's opponents--not an aid to understanding.
Perhaps all I am saying is that economists of the stature of you and Paul and Larry and so on should address each other in your pop writings with something like the same courtesy and intellectual seriousness you would use in an academic setting, rather than pushing custard pies into each other's faces. That just looks bad--and I find it hard to believe that you or Paul value the approbation of the idiots on either side who are delighted by it.
-- Clive
>>>>>>>>>>
Clive,
Sorry, but I do not believe you are getting the economic substance right. A multiplier of 1 means that, from a social perspective, the added government purchases really are free--they are provided by the utilization of idle resources. This point holds even if the spending is deficit financed so that the public debt rises, although there can be deadweight losses in the future from financing the larger debt. In the same sense, if the multiplier is greater than 1, say 1.5, the free public goods really do come with the bonus of free private consumption or investment. I think this view is the one actually held by Summers, C. Romer, etc., and I really do think it's voodoo macroeconomics. I think you do not regard it as voodoo because you find it familiar and comfortable.
If, as you say, the multiplier is positive but less than 1--say 0.5--the public goods cost only 50 cents on the dollar. This is correct, but I think, in practice, the only evidence for positive multipliers comes from responses to (temporary) military outlays during wars (such as in the U.S., where the wars have not involved a lot of physical destruction or loss of life). In these cases, the added outlay did require a lot of added work beyond reduced unemployment, notably by women, so this extra effort has to be included in the social cost. For non-defense outlays, the best empirical estimate I have at this point is a multiplier of 0 (though not precisely determined). This is the standard cost-benefit case where the benefit of an extra unit of public spending has to justify the added cost one-to-one. This multiplier of 0 should not be regarded as a pole, but rather as a central point. In the medium run, the multiplier is likely to be negative, reflecting the adverse effect of larger government on economic growth.
By the way, although WWII raised U.S. real GDP a lot, this response is not typical for the OECD. If fact, WWII is the biggest economic disaster of the 20th century, out-stripping the Great Depression. This is, of course, because many countries suffered greatly from physical destruction and loss of life (the U.K. not nearly as much as many countries on the European continent).
As to Krugman, my response would likely have been more moderate if he had not referred to my ideas as bone-headed. But I promise to behave better in the future.
-- Robert
>>>>>>>>>>
Thanks Robert.
Yes, I take your point, of course. From a social welfare point of view--ignoring distributional issues as they affect taxpayers v bondholders, this generation v later generations, residents v foreigners--then the cost of a fiscal stimulus that puts idle resources to work is confined to the deadweight losses of financing the debt. It feels strange for me to be reminding Robert Barro that those losses and distributional issues might be a big deal, and that one should be cautious on those grounds (among others) about advocating immoderate fiscal activism--but I just did, so there you are.
I would never presume to quarrel with you (or Paul) on the economics. That would be absurd. I am quarrelling with you about your journalism. Your view that counter-cyclical fiscal policy cannot--even in present circumstances--put idle resources to work may for all I know be true. I resolve to keep an open mind about it. But I am sure that for the moment the larger part of the economics profession disagrees with you. And I am sure that in challenging that consensus by calling it voodoo economics you are doing the discipline no favours.
Did Paul call you bone-headed? That was a bone-headed thing for him to say. But you see my point. What are non-economists to make of this exchange of insults and exaggerated certainties? Can you blame them for hearing only the political message they want to hear, and tuning out the rest?
-- Clive
>>>>>>>>>>
Clive,
Oh yes, the bone-headed remark is what started things.
One thing I think you need to be clear on is the distinction between Ricardian equivalence and Keynesian multipliers. The first bears, for example, on how a deficit-finance tax cut affects aggregate demand. The Ricardian view is no effect, and the "standard" view is that the effect is positive but less than one. The multiplier has to do with how a change in aggregate demand affects output. It is possible to have a large multiplier even with Ricardian equivalence, and it is possible to have a small multiplier even without Ricardian equivalence.
-- Robert
Thanks, Robert, especially for that last clarification. I have to admit that I haven't been giving much thought to the scenario in which a deficit-financed stimulus has no effect (under Ricardian equivalence) on aggregate demand and yet still has a big multiplier. I will have to think about that one...
As a reguarly reader of both you and Paul Krugman, I think you misunderstood him.
Paul isn't diplomatic enough to care if he offends the left, the right or the center. He was very critical of the anti-free trade remarks that Obama said during the primaries. Suggesting that he is pandering to left is ludicrous. I don't think that Paul could pander if he needed to.
The simplest explanation is that he is an academic saying that we are not quite sure how free trade really works in liquidity trap and that normal rules might not apply. It is the type of nuance and complicated discussion of the real word that the press almost always gets wrong.
Did you try ask Paul about what he meant before publishing that column?
Reading this was so dam cool, I feel guilty that it is free.
Clive, previously, I felt sorry for you: you would write great pieces, only to be commented on by economic analphabets with political agendas. Now I see that economic laureates also have agendas--and they read you too.
As for the substance I graduated with the view that big multipliers existed. Only in private practice did I come to be distrust them--although I would never thought them to be zero. For example, while working at the Puerto Rico Industrial Development Corporation, the Puerto Rico Manufacturers Association presented a study that said that section 936 had a certain employment economic activity multiplier effect. An economist I know did the math, and showed that this would entail an employment shortage and the island's per capita GDP higher than the mainland's.
The island's unemployment never has gone down below 9 percent with or without the section, and since 1972 there has been deconvergence with island's economy.
I also did linear regression between PR government spending growth rates and its GNP per capita growth rates and they were always had a negative correlation. Where is the multiplier effect?
To be fair I would have never dared to infer that there was no multiplier--at most that it was improperly spent.
Holy Hell, I think my brain just exploded.
The only thing I got for certain from this exchange is that there really is no consensus as to how to fix the economy.
Neither conservatives nor liberals appear willing to admit that they just don't know that much about economics outside of theory. In the last two days I've heard at least two contradictory claims about two economic events: the Great Depression ended because of New Deal economic policies, and the Great Depression ended because of government spending during World War II; and Japan's Lost Decade was exacerbated because they did not spend almost half-again what the country produces, and that Japan's Lost Decade was most likely prolonged because they spent half-again what the country produces.
Though simplistic, in both scenarios both assertions cannot be factually correct.
Let's call a spade a spade here: we do not know how to use economics to engineer a quick recovery from this downturn. What we are trying is, at best, a gamble. It may be an educated gamble, but this isn't like mixing an acid and a base and guaranteeing you'll get water and a salt.
I might not like the "stimulus package" regardless of its size, who voted for it, or whether or not it will work, but don't piss on my leg and tell me it's raining.
How do you get from "Should we be upset about the buy-American provisions in the stimulus bill?.. The answer is yes.." to "I think Paul is disingenuous (there I go again, more hysterics) when he says that the blog-post in question makes it clear he is not in favour of acting on the short-run argument for protection."?
I'm quite confused.
"The first bears, for example, on how a deficit-finance tax cut affects aggregate demand. The Ricardian view is no effect, and the "standard" view is that the effect is positive but less than one. "
Has anyone ever studied the question of whether or not Ricardian Equivalence is a tautology, and not an empirical observation? It sounds like a fancy name for "robbing Peter to pay Paul", just as "creative destruction" is a fancy name for the fact that some businesses won't make it.
"The multiplier has to do with how a change in aggregate demand affects output."
I actually doubt that a causal connection about this can be determined. Can someone explain how you rule out all the diverse incentives and disincentives and panic reactions in a crisis? Take spending during wartime. What can look like conspicuous consumption during peace can look like treason during a world war. Surely social pressures help determine spending patterns, or am I being silly?
Krugman is a poor macroeconomist. He has an axe to grind, wants a very big role for government in the economy, and his arguments are more political then rational.
I wish George Stigler was still around to lecture him on the dangers of the kind of big government control that Krugman advocates.
Krugman used to attack President Clinton for not being free trade enough, now he wants to carve out exceptions for political reasons.
Misunderstand Krugman? He seems to misunderstand himself half the time.
I have to admit that I haven't been giving much thought to the scenario in which a deficit-financed stimulus has no effect (under Ricardian equivalence) on aggregate demand and yet still has a big multiplier.
It seems possible, but even if it's positive I doubt it actually accomplishes much the taxpayers would consider useful. Politicians are much better at rewarding campaign contributors than allocating resources efficiently, so what we're basically talking about is a massive transfer of wealth to the politically connected, financed by money seized from taxpayers.
I guess it's a little better than outright armed robbery.
"In the last two days I've heard at least two contradictory claims about two economic events: the Great Depression ended because of New Deal economic policies, and the Great Depression ended because of government spending during World War II;"
Get ready for a third, the GD did not end until after WW2 when the gov lifted severe restrictions hampering the private economy.
Kenneth,
Of course Krugman was critical of Obama during the primaries. He was pandering to Clinton.
The problem with that column on the "buy American" provision is that Krugman's logic is strained. It's not clear at all that a coordinated worldwide set of stimulus programs all requiring governments to "buy nationally" would be the "second best" macroeconomic policy possible. Coordinated worldwide stimulus programs without any protectionist component would be best, and then maybe not quite so well coordinated worldwide stimulus programs also without any protectionism would be next. How can we ask the rest of the world to engage in the best kind of coordinated macroeconomic policy if we seem ready to be the first to jump to protectionism. Maybe if the rest of the world looked to be going that route, Krugman's column would be less intellectually strained.
"I think it is unreasonable, on the other hand, to regard everything Republicans say as definitionally wicked or stupid or both, which is the organizing principle of everything Paul writes in the NYT"
That's some serious hyperbole. Especially coming at the end of a paragraph about how reasonable you are.
Isn't the multiplier estimates all just aggregate multipliers? But surely there is some heterogeneity in the actual multipliers. A dollar spent on a bridge, and a dollar spent on unemployment compensation or foodtsamps may be very different. In fact, I would think that the latter had a higher multiplier since the underlying marginal propensity to consumer for that demographic (the poor, unemployment and disenfranchised) seems very high itself. Can someone elaborate on whether we know if there is heterogeneous multipliers?
Wait a minute, Paul Krugman accused someone of being hysterical? Paul Freaking Krugman? Truly, the gods of irony walk among us.
Arcseed,
I don't see any way to tell from Krugman's blog post whether he comes out in favor of short term protection.
He lays out an argument in favor and an argument against, but he doesn't say which argument wins.
Krugman's blog isn't bad, so much as it is intemperate. In that way, the difference between Krugman and Barro's responses are interesting -- Barro engages Crook, discusses their differences and lays out his case, and Krugman calls Crook a hysterical hack.
arcseed: the answer is in your ellipses.
"Should we be upset about the buy-American provisions in the stimulus bill? Is there an economic case for such provisions? The answer is yes and yes."
The article states that under conditions that currently exist and will exist in the near future, "there is an argument to be made" for protectionist foreign policy.
There are several things I have a problem with, but I'll leave them to smarter people to address.
There's a significant difference between expressing anger over a group of powerful people entirely ignoring Econ 101 and claiming that "Econ 101 is all you need to talk about the stimulus intelligently." The fact of the matter is that Republicans either do not understand or choose to ignore quite a few basic economic principles; an insistence on recognition of those principles before you ascend to a higher-level discussion is not disingenuous.
Clive, I found your FT piece completely disingenuous. Barro is dishonestly trying to burnish Herbert Hoover's imagine and (without justification) make a case for corporate tax cuts while ignoring the work of every other economist. Krugman's post discusses the merits of a policy, expresses doubt and ends with: "if we go all protectionist, that will shatter the hard-won achievements of 70 years of trade negotiations — and it might take decades to put Humpty-Dumpty back together again."
What you wrote here reminds me of Jim Wallis' "God's Politics: Why the Right Gets It Wrong and the Left Doesn't Get It". He rails against right-wing evangelical conservatives, who we've seen distort American policy in unimaginable ways. But he fells like he has to be "balanced", so he spends a lot of his time beating up on the straw man of so-called secular fundamentalists, who, with their lone congressman, Pete Stark, are destroying America in the same way that Bush and Rove did.
No chance. You can't draw a parallel between good faith proposals for economic stimulus and Mortgage Broker/Georgia Senator Johnny Isakson putting a $15000 tax break for home buyers in the bill. And you can't draw a parallel between Barro's content-free drivel and Krugman pointing out that free trade is essential but it's possible some protectionism might help in the short run.
For what it's worth, I read Paul's column as an "interesting observation", not as some underhanded endorsement of protectionism.
He does this sometimes.
Example - the same way a few weeks back, he made the observation that you CAN create an economy of the super-rich - and everyone else - and that it can "work" - because New York City is an example of that.
He didn't go out of his way to state that this is good or bad - just made the empirical economic observation of the state of New York City.
So I think you did jump the gun on being a type of free trade thought police - whereby even thinking about contrasting cases is irresponsible.
So you create this whole case, based on only wispy evidence. You jump from that one column, to respected economics, to the protectionism inherent in democrats - then to circle around and say that, basically, Krugman even speculating on stuff is suddenly evidence that he is setting a consensus against free trade.
The linkage there is very very thin, really.
Don't thought police Krugman, because of what democratic policy makers MIGHT do.
"I think it is unreasonable, on the other hand, to regard everything Republicans say as definitionally wicked or stupid or both"
Just how frickin' bad do the Republicans have to get before such a standard is appropriate? How many wicked and stupid things does the GOP have to do and say before it's fair to regard it as wicked and stupid? Krugman has stopped granted Republicans the benefit of the doubt, and it seems like his view has turned out to be far more consistently correct than others'.
Mike
How do you get from "Should we be upset about the buy-American provisions in the stimulus bill?.. The answer is yes.." to "I think Paul is disingenuous (there I go again, more hysterics) when he says that the blog-post in question makes it clear he is not in favour of acting on the short-run argument for protection."?
I'm quite confused.
I think the point is that Krugman knows the Buy American provision is very bad economics, but instead of coming out and saying so he claimed there's "a case" for it and equivocated. Then he tried to point to his equivocation as evidence that he didn't support Buy American - but refusing to call out something that is obviously bad economics is tantamount to supporting it because the left can then say "Krugman thinks there's a case for Buy American".
A left-leaning economist who was less concerned with how liberals would react to his writings would be willing to say straight-up that Buy American is bad policy; Brad DeLong - who I think agrees with Krugman almost all the time - did just that on his (excellent) blog. For the record I like Krugman's writings but the Buy American post mystified me, his attack on Clive was just strange, and I'm glad Clive responded with this broadside.
I'm sorry, but when you write things such as "I think it is unreasonable, on the other hand, to regard everything Republicans say as definitionally wicked or stupid or both, which is the organising principle of everything Paul writes in the NYT" it's pretty hard to take your comments on Krugman seriously. You're not arguing contra Krugman. You're arguing contra a caricature of Krugman.
For the record, Mr. Crook, pretty much everything the Republicans propose really is definitionally wicked, stupid or both. I defy you or anyone else to name another political party in the history of elected government that has been so bent on destroying the social and economic integreity of the nation to which it belongs as the modern GOP, and always solely to advance its own political prospects.
And I am sure that in challenging that consensus by calling it voodoo economics you are doing the discipline no favours.
I think you're misspeaking here, Clive. Here's the only place in that article where Prof Barro used the word "voodoo":
Back in the 1980s, many commentators ridiculed as voodoo economics the extreme supply-side view that across-the-board cuts in income-tax rates might raise overall tax revenues. Now we have the extreme demand-side view that the so-called "multiplier" effect of government spending on economic output is greater than one -- Team Obama is reportedly using a number around 1.5.
So, unless you're saying that the "consensus" is that the multiplier for government spending is above 1, you're attacking Prof Barro for something he hasn't said.
Are you claiming that's the consensus? Because that's not the impression I got from reading this post.
Alan, I'll take up your challenge. I'm no fan of Republicans, but the Democrats are absolutely just as terrible for the country, in every way you mention.
Clive,
Thanks for sharing this.
Dan,
It may sound like hyperbole but it may also accurately describe Krugman's NYT columns. After he won the Nobel, Krugman appeared on CNBC and an anchor mentioned that he seemed surprisingly reasonable compared to his op/ed columns. Krugman didn't take offense and noted, essentially (I forget his exact words) that op/ed columns called for polemics.
Right on, you are exactly right. Both of these economists let their partisan political views influence their writing, too much. Even though I like Krugman and think he makes a lot of good points, last year pre Obama every time I went to look at one of his columns I would think, ok how is he going to slam Bush this time?
Allan wrote: I defy you or anyone else to name another political party in the history of elected government that has been so bent on destroying the social and economic integreity of the nation to which it belongs as the modern GOP, and always solely to advance its own political prospects.
If I would write such drivel I would also forgo my last name. Surely I can mention the Republican Party's profligate spending from 2001 to 2006 as injurious to the economy.
Nonetheless, dear Allan, political extremism involves two prime ingredients: an excessively simple diagnosis of the world's ills, and a conviction that there are identifiable villains back of it all. Thus, I obviate your challenge.
"He [Krugman] is too good an economist, and too honest a person, to advocate protectionism"
Well, yes and no..
I'm on Barro's side on this one, but I'd take points off for assuming the multiplier is positive.
Is the deadweight loss of taxes ever set against the reduction in transaction costs by institutional growth? It might be difficult to do so, since many transaction costs are non-monetized, although they consume space and time all the same. Still, this caveat should be required in all discussions of spending. Indeed I think the profession of economics has been beggaring the health of the nation by following some rather exclusive assumptions. A standard answer (we see it above in these comments, too) is that government can't do anything right -- but this is only half-true, just as it is for private enterprise. (And "public choice" studies appear to ignore things like further elections to change course; a sort of dynamical failure in that approach.) There is also the not-so-little item that the era of computers allows transparency on spending issues even of microscopic size, and this could improve the honesty and efficacy of the whole system.
If fiscal deficit spending has some kind of multiplier effect, then how does this affect the monetary equation M x V = GDP. Does it trick the FED into over expanding the money supply or does it increase the velocity of money? Clive, maybe you could get Robert Barro to answer this question.
As I see it, the FED wants to see inflation of about 3% and real growth of about 3% or indirectly a nominal GDP growth rate of about 6% and when these figures are below FED expectation the FED accelerates the money growth rate which is what they are doing now. Monetary policy is so powerful that it overrides fiscal policy.
Clive,
Krugman went too far when he called your attacks hysterical. They were strong, and I think incorrect, but not hysterical. Anyway, I understand your defending your journalistic honor against this charge. But you do say a lot of things about Krugman here that are not correct.
For example, you write, "I think it is unreasonable, on the other hand, to regard everything Republicans say as definitionally wicked or stupid or both, which is the organising principle of everything Paul writes in the NYT.". This is not true. Krugman is not against the vast majority of Republican positions "by definition", or just because they're Republican. You'd be hard pressed to find a Krugman criticism of a Republican position that was not for good logical reasons. And it's also clearly false that he's against anything Republican by definition because there are still some things he agrees with them on, like being strongly pro free trade, and he expresses his pro free trade views very strongly again and again.
Moreover, if you want to see a Krugman position that's strongly against many liberal Democrats and much more favored by Republicans, take a look at his Slate article, "In Praise of Cheap Labor: Bad jobs at bad wages are better than no jobs at all."
The thing is, the Republicans have gotten so bad, so anti-thinking, dogmatic, and extreme over the last generation, that it's harder and harder to find anything you can agree with them on if you really understand economics and you are not an extreme libertarian willing to sacrifice greatly growth in wealth, science, medicine and total societal utility to avoid losing even small bits of economic freedom.
I would just like to note that Barro has yet to answer Krugman's criticism of his comments on WWII.
Until he does, "boneheaded" appears to be a correct description of his analysis.
see: http://krugman.blogs.nytimes.com/2009/01/22/war-and-non-remembrance/
"I defy you or anyone else to name another political party in the history of elected government that has been so bent on destroying the social and economic integreity of the nation to which it belongs as the modern GOP, and always solely to advance its own political prospects."
Let's see: Hitler's NAZI party was pretty bad. So was Mussolini's Fascist Party. The Left party in Germany kind of sucks right now, as does that party in Israel with the Lieberman guy. Oh, and Hamas is a pretty bad party. Maybe the communist parties in Italy and Greece during the cold war. Sinn Fein is pretty bad. And that flemish nationalist party in Belgium too. But yeah. The Republicans are totally the worst in history. It was probably their desire to destroy the social and economic integrity of the nation that made them do stuff like conceding an election they just lost. Just trying to throw us off I guess.
Robert Barro: "the adverse effect of larger government on economic growth"
In Determinants of Economic Growth you demonstrated that in OECD and Rich countries, government consumption levels have no (even vaguely) significant correlation to long-term growth rates. (One of the panels showed positive correlation, the other negative--neither significant.)
Nijkamp and Poot's meta-analysis (2003) demonstrated that dozens of your colleagues who have also studied the issue, in aggregate, support that conclusion in spades. Nijkamp and Poot cited your studies in particular in support of that conclusion.
I don't understand why your statement above (and in fact the rather equivocal written conclusions accompanying your results) contradict your own findings and those of your colleagues.
Steve Roth:
Having read Determinants of Economic growth myself, you are at best engaging in selective observation or at worst in outright false attribution.
According to Robert J. Barro, “[T]he ratio of real government consumption expenditure to real GDP had a negative association with growth and investment,” and “Growth is inversely related to the share of government consumption in GDP, but insignificantly related to the share of public investment.” I quote from his essay “Economic Growth in a Cross Section of Countries," published in the Quarterly Journal of Economics, Vol. 106, No. 2 (May, 1991), p. 407.
To suggest that Barro is inconsistent on government spending and economic growth, is like suggesting that "for three decades, radicals who dare to call themselves "conservatives" have made a wholesale assault on our country's government—and on our economy."
«pretty much everything the Republicans propose really is definitionally wicked, stupid or both. I defy you or anyone else to name another political party in the history of elected government that has been so bent on destroying the social and economic integreity of the nation to which it belongs as the modern GOP,»
You really misunderstand the Republicans.
They are very moral, ethical and patriotic, for *their* nation, which is the nation of WINNERS. The GOP does not belong to the USA, where 80%-99% of the two-legged population is regarded by them as cattle or vermin, but to Real America, the 1-20% of WINNERS, a minority of deserving, morally superior producers who is viciously oppressed and exploited by the parasitical majority of LOSERS.
The Republicans fight patriotically for the Real America nation, attempting to defend it from exploitation and extortion.
As a famous Republican economist and ethicist writes:
http://online.wsj.com/article/SB121460589609712025.html
«Most of his former colleagues probably can't fathom why Wall Street bankers make tens of millions of dollars in salaries and bonuses each year. How would he justify these fat pay days? "It's simple," he lectures, sounding very much like the Texas A&M economics professor that he was in the 1970s: "In economics, we define labor exploitation as paying people less than their marginal value product.
I recently told Ed Whitacre [former CEO of AT&T, who retired with a $158 million pay package] he was probably the most exploited worker in American history because he took Southwestern Bell, which was the smallest of the former Bell companies, and he turned it into the dominant phone company on earth. His severance package should have been billions."»
Republicans like Gramm strongly believe in fairness, in giving each worker what they deserve, in keeping Real America great, in justice for all its citizens.
They just define "all its citizens" as including only those they regard as the morally deserving, ethically superior, high-net-worth producers like Mozillo, Fuld, ONeill, Cayne, and excluding what they think of as the nasty, brutish, subhuman parasites that exploit and oppress theior betters, such as the welfare queens driving around in their Cadillacs, the strapping young bucks wolfing down their t-bone steaks.
«pretty much everything the Republicans propose really is definitionally wicked, stupid or both. I defy you or anyone else to name another political party in the history of elected government that has been so bent on destroying the social and economic integreity of the nation to which it belongs as the modern GOP,»
You really misunderstand the Republicans.
They are very moral, ethical and patriotic, for *their* nation, which is the nation of WINNERS. The GOP does not belong to the USA, where 80%-99% of the two-legged population is regarded by them as cattle or vermin, but to Real America, the 1-20% of WINNERS, a minority of deserving, morally superior producers who is viciously oppressed and exploited by the parasitical majority of LOSERS.
The Republicans fight patriotically for the Real America nation, attempting to defend it from exploitation and extortion.
As a famous Republican economist and ethicist writes:
http://online.wsj.com/article/SB121460589609712025.html
«Most of his former colleagues probably can't fathom why Wall Street bankers make tens of millions of dollars in salaries and bonuses each year. How would he justify these fat pay days? "It's simple," he lectures, sounding very much like the Texas A&M economics professor that he was in the 1970s: "In economics, we define labor exploitation as paying people less than their marginal value product.
I recently told Ed Whitacre [former CEO of AT&T, who retired with a $158 million pay package] he was probably the most exploited worker in American history because he took Southwestern Bell, which was the smallest of the former Bell companies, and he turned it into the dominant phone company on earth. His severance package should have been billions."»
Republicans like Prof. Gramm strongly believe in fairness, in giving each worker what they deserve, in keeping Real America great, in justice for all its citizens.
They just define "all its citizens" as including only those they regard as the morally deserving, ethically superior, high-net-worth producers like Mozillo, Fuld, ONeill, Cayne, and excluding what they think of as the nasty, brutish, subhuman parasites that exploit and oppress their betters, such as the welfare queens driving around in their Cadillacs, the strapping young bucks wolfing down their t-bone steaks.
Clive:
My previous comment prompted me to go back and do the legwork on this. Some questions you might care to ask Mr. Barro if you have the opportunity to talk to him again. A bit too long to post here.
http://trueconservative.typepad.com/trueconservative/2009/02/an-open-letter-to-robert-barro.html
Who, exactly, is willing to ignore and obscure the consensus--and even his own findings--to promulgate a faith-based ideological belief system?
Luis A. del Valle:
You're correct, sort of. Apologies, I didn't go back and dot the Is before the initial comment. Corrected in my next, above.
It was in a 2000 paper that Professor Barro broke out results for Rich, OECD, and Poor countries--with the results I cited. All his other writings, as well as I can determine, make their conclusions about government consumption versus growth based on the full panel of approximately 100 countries. That panel--and the associated conclusions--are completely dominated by results from poor countries.
Dear friends
I am surprised this debate
The classical economics is an economic equilibrium, viewed as a balance "automatic."
The whole theory is build with this principle.
JMKeynes discovered the error of that theory and he wrote the General Theory, noting that the classical theory is a "special case" .. Is something like Newton's laws, which is a particular case of the physics of Einstein .. Friedman's theory eliminated the ideas of Keynes and returned to the ideas of the classical theory (the markets are largely self)
Since this model (Friedman) has completely collapsed and overall, it is clear that no one knows what to do
Are 30 years of bad policies
and we can take ten years to find an answer.
The economy is much more complex than I thought Friedman.
Minsky and Keynes was right, the most important issue is the "full employment"