28
Jul
2015
Sequester Fun, and Murphy on Liberty Classroom
My latest post at Mises CA shows that Krugman can’t get away with saying Keynesians just needed to be more careful back in 2013, and that had they checked the numbers they would’ve known the sequester was no big whoop. Au contraire, I dug up Jared Bernstein going nuts because right-wingers were ignoring “the arithmetic” (his term).
Tonight from 9pm – 10pm Eastern I will be doing a live Q&A for Tom Woods’ “Liberty Classroom,” where I’ll be teaching courses on the History of Economic Thought in the fall.
mises.ca is down for now.
I don’t imagine it would help to point out – again – that forecasting models and multiplier estimates are two different things, that there’s nothing particularly Keynesian about forecasting models, and that comparing actual outcomes to an ex ante forecast is a stupid way to back out a multiplier estimate.
Daniel, are you saying I have no grounds to complain when Bernstein in 2013 rolls his eyes at the idiot right wingers who don’t know simple arithmetic, and then Krugman in 2015 says the Keynesians can’t be held accountable for what they said in 2013 because they hadn’t really looked at the numbers? This is all just me being stubborn?
This passage you wrote was bang on:
“When massive government deficits didn’t deliver as promised, the excuse was, “The economy was worse than we realized.”
” Then, on the other end, when budget cuts didn’t harm growth as warned, the excuse was, “The economy was stronger than we realized.”
” And remember folks, the Keynesians are the ones constantly running victory laps, saying the evidence overwhelmingly supports their views.”
I’m saying what I said about whipping out these forecasts as evidence. And in my defense I’ve been pretty consistently saying it since 2009.
On arithmetic, yes Krugman seems to have been as vague on the numbers in 2013 as the conservatives Bernstein is complaining about. So you’re with Bernstein then I assume? Where I agree with Krugman is where he says he’s not the oracle of Keynes. Do you agree or disagree with that?
I guess I’m having trouble pinpointing precisely what your view is.
-Motte and bailey. Krugman is the oracle of Keynes when he’s right and he’s not the oracle of Keynes when he’s wrong. Even Keynes is not the oracle of Keynes when he’s wrong.
It’s not a motte and bailey if you just invent and attribute the bailey.
So Krugman doesn’t run victory laps when he’s right and his opponents are wrong? Murphy can cite ten dozen examples of him doing just that!
You were quoting me E. Harding.
If you’re making a comment about Krugman, then just show where he says to speak for Keynes.
I’m not sure “victory laps” really get at what you’re suggesting here. Are you saying “doing victory laps” amounts to being the oracle of Keynes. I’m confused.
“there’s nothing particularly Keynesian about forecasting models”
Is that because the forecasting models:
A. Presume that the market does not fail;
B. Presume that the market does not lack or require an external shot of “momentum”;
C. Presume that government interventions are always seen as distorting the price structure in an unsustainable manner; and
D. Differentiate between “demand” in the form of what one properly owns and controls for purposes of exchange vs. “stimulated” shifts of purchasing power designed to provide “momentum” and additional “aggregate demand”?
E. None of the above
F. All of the above.
Seriously, I submit that the opposite of A-D are unsupported and unsupportable assumptions that are behind all economic policy that is based upon violent intervention. I’ve been trying for years to drag proof of these assumptions out of the Keynesians and the other interventionists to no avail. I also submit that the interventionists have a high burden of proof that they must overcome to demonstrate the necessity and efficacy of their proposals.
Nope.
“Where I agree with Krugman is where he says he’s not the oracle of Keynes. Do you agree or disagree with that?”
Daniel,
The relevant question is why Krugman ACTED as if he were an oracle back in 2013. He made some pretty straightforward claims back then, and then acted as if those who made different predictions didn’t know what they were talking about. He deserves to be called out now for his arrogance and, frankly, for his current excuse making, which is not becoming of someone who knows as much economics as Krugman should.
I could care less about that question and don’t even agree with the premise. In the midst of the ongoing depression we’re facing in economic activity and the prospect of more shocks from Europe and Asia that’s probably the least relevant question.
If you’re interested in it, fine.
I’m not sure if he’s arrogant. It does need to be clear what he got wrong and I think he did a pretty honest and straightforward job pointing that out.
“In the midst of the ongoing depression we’re facing in economic activity”
-Who’s this “we”, Daniel? America and Canada are not in depression.
“that’s probably the least relevant question.”
-LOL. “Science is not prediction, it is pomposity”.
I’m sure he’s wrong, especially about the Euro.
“In the midst of the ongoing depression we’re facing in economic activity …”
I’m going to try something, here, because I think I’m on to something in the way of exposition.
It’s not the goal of consumers to desire what producers make; Rather, it’s the other way around.
Producers have to guess correctly about consumer demand.
So, there’s really no such thing as a “demand shock”. Demand is what it is, and propping up production processes which don’t conform to consumer preferences causes the business cycle.
Does this at least help to explain from where the Austrians are coming?
“I could care less about that question and don’t even agree with the premise.”
Hmm, OK. You can care about whatever you like, but you are the one who brought up the whole “oracle of Keynes” thing. You thought it relevant to say that Krugman does not claim to be an oracle, but it’s not relevant to say that he acts as if he’s the oracle? it seems relevant to a subject you initiated.
As to whether the premise is correct (the one you don’t agree with), do you deny that Krugman predicts the result of certain policies (like the sequester) based on Keynsian ideas? I took this to be the meaning of your term ‘oracle of Keynes.” Perhaps I misunderstood what you meant?
Also, this is playing right into the hands of the Market Monetarists: with an independent central bank, fiscal policy doesn’t matter, even when it’s in the form of tax hikes.
Well, the non AD related effects of tax rate hikes still matter, though.