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More Commentary On Gruber

I realize I am biased since I can’t stand his monetary policy views, but does anyone else find these remarks from Scott Sumner a bit…unsettling?

There are degrees of dishonesty. When I say I support policy X, I actually do support that policy. I could pass a lie detector test. But when I first started blogging I would occasionally use arguments or data that I knew was slightly misleading. Not false, but slightly questionable. Or data that could be interpreted in another way. For a worthy cause–the greater truth. I had been doing this my entire life in face-to-face discussions, and almost always got away with it. But the blogging world was different. Within a few months I discovered that I almost never got away with it. So I stopped doing it, or at least stopped as much as I could. (I’m sure I still err now and then.) I did not stop because I am a highly moral person. I stopped because it was counterproductive. I was getting hammered in comment sections, and had to repeatedly backtrack. Ever since 2009, whenever I write a post I try to make my argument defensible, if people were to challenge the accuracy or relevance of my supporting evidence. I see other bloggers who also do this, and some that don’t. If you are famous and don’t respond to commenters then you can get away with cutting lots of corners. But in the long run I believe that honesty is the best policy.

I suppose it depends what Sumner means by “slightly questionable,” but I’ve read the above a few times now and it sure sounds like he’s saying, “I used to use misleading tactics to get people to agree with me, but I’ve since stopped because I got caught so many times misleading people.”

From the comments of Tyler Cowen’s shrugging over GruberGate, John Schilling writes:

If open discourse involves lying, hypocrisy, and open contempt for other participants, and if promoting open discourse requires not calling people out on their lying, hypocrisy, and contempt lest we frighten them away or shame them into silence, I am unconvinced of the value of this “open discourse”.

Or possibly it’s a class thing – it’s OK to lie to the contemptable [sic] masses, and we should promote open discussion among us elites about how and why we are lying to the contemptible masses, we all do it, so the real hypocrisy would be calling out another of the elite for doing the same. And don’t go blabbing to the masses about any of this, that’s Just Not Done.

Several people in the comments were (understandably, in my view) reacting harshly to Cowen’s post, but this guy John crystallized it quite nicely (and with more civility than some of the others).

The Case Against Rent Control

Actually, that’s a bit presumptuous. Let’s just call it a case against rent control, which I wrote for the Freeman. An excerpt:

There are further, more insidious problems with rent control. With a long line of potential tenants eager to move in at the official ceiling price, landlords do not have much incentive to maintain the building. They don’t need to put on new coats of paint, change the light bulbs in the hallways, keep the elevator in working order, or get out of bed at 5:00 a.m. when a tenant complains that the water heater is busted. If there is a rash of robberies in and around the building, the owner won’t feel a financial motivation to install lights, cameras, buzz-in gates, a guard, or other (costly) measures to protect his customers. Furthermore, if a tenant falls behind on the rent, there is less incentive for the landlord to cut her some slack, because he knows he can replace her right away after eviction. In other words, all of the behavior we associate with the term “slumlord” is due to the government’s policy of rent control; it is not the “free market in action.”

I’ve Solved the Climate Debate!

Based on progressives’ reaction to the US/China pledge. Details here.

Gruber Is Exactly What I Was Imagining

Remember in my latest video where I pretend to be a sharp economist advising the elites on how to bamboozle the American public while ramming through their unpopular agenda?

With that in mind, watch the opening 20 seconds of this, then skip ahead and let it play from 3:05 onward. (HT2 Glen Whitman)

Speaking of Gruber, David R. Henderson reminds us of some of his previous eyebrow-raising moments.

Nancy Pelosi: “Gruber Who?”

This is hilarious.

King Krugman Launches War Against Dictionaries

In an interview with Henry Blodget, Krugman explained what he would do if he were king of the United States:

Notice four things in this:

(1) Krugman calls for a top income tax rate of 70 percent, with more brackets added to the code.

(2) Same tax treatment for capital gains, notwithstanding those economists who argue that taxes on capital are more destructive than taxes on labor income.

(3) A single-payer system in which the federal government makes all medical expenditures in the country.

(4) He wraps up by calling himself a “free-market Keynesian.”

Of the above, the thing that bothers me the most is Krugman having the audacity to refer to himself as “free market.” All he means by that term is that he thinks decentralized markets are useful in some respects.

A defender of Krugman might be tempted to say, “Oh come on Murphy, you like to nitpick and find huge differences, but Krugman is an economist who recognizes the benefits of private property and so on. Chill out.”

But no, that won’t do. Economists Oskar Lange and Abba Lerner recognized the importance of using prices and markets in organizing the economy; that’s why historians of economic thought refer to “market socialism,” in which the government owns the means of production but uses decentralized markets and State-announced “prices” to determine micro-allocation outcomes.

Notice too that Krugman doesn’t even think that the market should handle everything so long as we’re at full employment, whereas the State has to come in with fiscal stimulus and boost Aggregate Demand during recessions.

Nope, even at the micro level, Krugman thinks there are massive failures of the market economy requiring political correction. For example, he has no problem with the EPA directly regulating the emissions from power plants and flat-out banning new coal-fired power plants. (Who needs price discovery when you have William Nordhaus’ computer model of the economy through the year 2300?)

I know, I know, some Krugman defenders will say, “OK Murphy, sure he sees a role for the feds when it comes to depressions and a huge externality like climate change. So? Those are serious issues.”

Well, let me end with this blast from the past: Krugman actually blamed bad English food on the failures of the market.

But by all means, let’s let him use the term “free market” to describe himself. Just like he’s a “liberal.”

Cowen the Merciful

His take on Grubergate:

I’m not so interested in pushing through the mud on this one. It’s a healthy world where academics can speak their minds at conferences and the like without their words becoming political weapons in a bigger fight…If anything, I feel sorry for Gruber that he has subsequently felt the need to so overcompensate by actively voicing such ex post cynicism, it is perhaps the sign of a soul not at rest.

In the meantime, I’d like to see more open discourse, not less. Perhaps we should subsidize people who end up looking foolish, rather than taxing them.

My response on Twitter:

This reminds me of Tyler’s reaction to ClimateGate: IIRC he said it made him increase his Bayesian priors about the threat of anthropogenic global warming if academics felt compelled to do this stuff to get public support.

Martin Wolf, Closet Austrian?

Is this from the FT or the Peter Schiff show?

Huge expansions in credit followed by crises and attempts to manage the aftermath have become a feature of the world economy. Today the US and UK may be escaping from the crises that hit seven years ago. But the eurozone is mired in post-crisis stagnation and China is struggling with the debt it built up in its attempt to offset the loss of export earnings after the crisis hit in 2008…

These credit booms did not come out of nowhere. They are the outcome of the policies adopted to sustain demand as previous bubbles collapsed, usually elsewhere in the world economy. That is what has happened to China. We need to escape from this grim and apparently relentless cycle. But for now, we have made a Faustian bargain with private sector-driven credit booms. A great deal more trouble surely lies ahead.

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