A Note on Intellectual Honesty
[UPDATE: In hindsight, I wish I hadn’t cast this post as explicitly about “intellectual honesty,” because I don’t like it when DeLong, Krugman, et al. castigate their opponents as not being simply wrong, but being dishonest to boot. So, in retrospect I wish I had written this differently, to just explain why their use of the Mellon quote troubled some of us.]
Look, I feel funny even writing this blog post, like I’m explaining why drowning kittens for sport is not cool, but apparently it is necessary.
In his Memoirs, Herbert Hoover explained that after the stock market crash of 1929, there were two schools of thought that emerged in his Administration. In Hoover’s words: “Two schools of thought quickly developed within our administration discussions. First was the ‘leave it alone liquidationists’ headed by” Hoover’s Secretary of the Treasury, Andrew Mellon.
Hoover then goes on to quote Mellon’s infamously hardhearted advice, to “liquidate stocks,” “liquidate labor,” and so forth.
Then, on the very next page (in my edition of Hoover’s Memoirs), Hoover says: “But other members of the Administration, also having economic responsibilities–Under Secretary of the Treasury Mills, Governor Young of the Reserve Board, Secretary of Commerce Lamont and Secretary of Agriculture Hyde–believed with me that we should use the powers of government to cushion the situation.”
OK, so now ask yourself, how could someone be incredibly intellectual dishonest, without technically lying? Well, he could read from Treasury Secretary Mellon’s advice (which we only know about because of Hoover’s Memoirs, so it’s possible he didn’t even say it just like that), and then lead the listener/reader to believe that this was the Hoover Administration’s official policy. At this point, it shouldn’t surprise you that that’s how Brad DeLong and Paul Krugman operate. To repeat, these guys know full well what they are doing; they don’t say anything that is technically, demonstrably false, which is worse than some journalist who ignorantly says “Hoover was a liquidationist” because that’s what he was taught in 5th grade and never heard differently.
So, when Krugman pulled this stunt in his recent NYT op ed (what I link above for him), various people went to the trouble of pointing it out–for example David R. Henderson. I wasn’t even going to get involved, because what was the point? It was a dog bites man issue.
Yet innocent Daniel Kuehn, who knows nothing of guile, can’t even see the appearance of a problem here. Why would anyone object to someone taking a quote that Hoover brought up explicitly to renounce, in order to convince people that Hoover was a Mellonite? Just as DeLong did at the time I pointed out the problem with such a move, Daniel started arguing about the budget data and whether Hoover was or was not a proponent of fiscal austerity.
OK, that’s fine Daniel. If the fiscal history makes the case that Hoover was an “austerian,” then DeLong and Krugman should use that evidence when trying to convince the public. But they don’t do that, instead they rely on “shocking” quotes from Mellon. When you realize why they chose to do that, then you will realize why it was so intellectually dishonest.
For an analogy: Look at how outraged progressives are about Obama’s “you didn’t build that” issue. To make this comparable, Obama would have had to say in his speech, “Now when it came to the stimulus package, Christy Romer pulled me aside and said Barack, those private entrepreneurs didn’t build that. That was government infrastructure. Yet Larry Summers and I knew better, that it was the capitalists whom we should thank for all of our commercial and scientific advancements.”
Now, if conservatives had taken that statement to run around saying, “OMG!! The Obama White House doesn’t think entrepreneurs built their businesses, can you believe it?!” you would get an idea of what’s going on with the Mellon/Hoover record. It doesn’t matter what Obama’s fiscal policies are; it would be ridiculous to lift a quote like that and use it against him, when we only know about it because he brought it up to say he disagrees with it.
Let me try one last thing here, knowing full well it’s futile: If I get up and say, “My barber says I’m bald, but I repudiate that!” then I am still bald. I don’t inoculate myself from the allegation, just by denying it in print. The issue here isn’t whether Hoover is, or is not, a liquidationist. The issue is, using Mellon’s quote to convince people.
Cool Quote From Mises
Came across this while reviewing something for a client…
We are the lucky heirs of our father and forefathers whose saving has accumulated the capital goods with the aid of which we are working today. We favorite children of the age of electricity still derive advantage from the original saving of the primitive fishermen who, in producing the first nets and canoes, devoted a part of their working time to provision for a remoter future. If the sons of these legendary fishermen had worn out these intermediary products—nets and canoes—without replacing them by new ones, they would have consumed capital and the process of saving and capital accumulation would have had to start afresh.–LUDWIG VON MISES
IMF Study Calling for US Gas Taxes Is Pretty Sneaky
I give the details in this IER blog post:
So how does the IMF study come up with such whopping tax proposals? Let’s walk through their Appendix Table 1 (page 44) to see the breakdown of their fuel tax suggestions…
The proposal for the United States is 36 cents per liter, which works out to about $1.36 per gallon. And yet note that only 6 cents—one-sixth of the total—is attributed to the negative externality from carbon dioxide. The balance isn’t even due to air pollution either; that account for only 3 cents, or one-twelfth, of the total.
No, the major drivers in the IMF estimate are “congestion” and “accidents.” This is simply astounding, and shows the lengths to which economic science can be bended to fit a preconceived political agenda.
Even taking the entire “Pigovian” externality framework on its own terms, taxing gasoline because of road congestion is an incredibly blunt instrument; it’s like taxing forks to fight obesity. The reason we have traffic jams is that the governments that own roads do not charge market prices for their use. If the governments in the United States would privatize the roads and highways they control, letting private owners set tolls based on supply and demand (and allow tolls to be collected to build more roads), traffic jams would be a thing of the past. Look at the crowds on a government-run subway, versus a privately-owned commercial airplane, to see the difference.
A similar analysis shows how silly it is to tax gasoline because of car accidents. Here too, there is a very weak link on the margin between gasoline consumption and the danger one imposes on others by driving. If someone drives a fuel-efficient Prius, is he really much less likely to cause an accident than someone driving a similar vehicle with a conventional engine?
There’s another way to look at this issue. According to the IMF table, the mere fact of driving a vehicle on the road in the United States causes 27 cents per liter—which works out to $1.02 per gallon—in negative externalities in the form of road congestion and traffic accidents. Well, that means driving a hybrid or an electric car would also cause a similar amount of negative externalities, if we convert to the average time a vehicle spends on the road. In light of such huge negative externalities from driving, the very least the U.S. government can do is to stop explicitly subsidizing hybrid and electric car technology, in lieu of an outright tax on them (perhaps per mile traveled).
“(Hey Won’t You Play) Another Somebody Done Somebody Wrong”
I tried out a classic BJ Thomas song at the karaoke bar last night…
Why Do Some Christians Look to the Bible So Much?
Gene Callahan wants to know:
I ran across the passage quoted below while researching job opportunities, as a pledge that faculty of a certain college must take before they can be employed there:
“The sole basis of our beliefs is the Bible, God’s infallible written Word, the 66 books of the Old and New Testaments. We believe that it was uniquely, verbally and fully inspired by the Holy Spirit, and that it was written without error (inerrant) in the original manuscripts. It is the supreme and final authority in all matters on which it speaks.”
To my knowledge, the Bible itself never talks about the Bible at all. Therefore it is certainly not something you find in the Bible that your beliefs should be based solely on the Bible. I also don’t think anywhere in the Bible it says the entire Bible is uniquely, verbally and fully inspired by the Holy Spirit (since the Bible never mentions “the Bible”!). I am also not aware of any passages where the Bible says it itself is inerrant.
It’s funny, the sermon in church today touched on this very topic. I think my pastors would endorse the statement Gene finds odd (though I don’t know if they would all feel comfortable with a college insisting on a pledge from all faculty like that). So here are some examples from the Bible where it shows the importance of Scripture:
1) My personal favorite (which we didn’t discuss today): When Jesus is tempted by the Devil, literally the entire showdown centers around both of them quoting Scripture at each other. Furthermore, Jesus defends Himself by quoting entirely from Deuteronomy, which is the epitome of a boring, apparently arbitrary list of regulations laid down by God. I can barely get through that book when I read the Bible. But as I told my son the other day, it’s a good thing the young Jesus studied better than I did, because that’s what He needed to resist the snares of the Devil.
2) In the story of Lazarus and the rich man, Jesus has the rich man (condemned to hell) ask at the end if Abraham can send the beggar Lazarus (also dead) back as a sign to his still-living brothers, so they can repent and avoid the rich man’s fate. But Abraham tells him, “‘If they do not hear Moses and the prophets, neither will they be persuaded though one rise from the dead.'” My pastor cited this to show that God intended the Scripture to convince people of His plan, not the Resurrection. In other words, the point of Jesus rising from the dead wasn’t to convince skeptics.
3) In the famous story of two disciples walking on the road to Emmaus, Jesus joins them but they don’t recognize Him. They are sad, discussing how their leader (Jesus) had just been crucified, even though they had thought He was the Messiah. Jesus calls them foolish for not trusting in God, and then cites the things written in Scripture about the Christ as what they should have trusted. (This was the point in today’s sermon.) In other words, Jesus didn’t say, “You saw Him perform miracles, including raising people from the dead. Why are you doubting the reports of the women who say the tomb is empty and angels proclaimed that Jesus is alive?” No, Jesus wanted to know why they doubted the written word of God, which clearly told what would happen to the Messiah (i.e. He would be mocked, killed, and return).
Incidentally, I know there are going to be all kinds of objections to the above, most notably: “Your premise is that the Bible is the inspired word of God. But isn’t that kinda what we’re arguing about?”
No, it isn’t, not vis-a-vis Gene’s post. He concluded with this:
No text interprets itself: Any Biblical interpretation will be part of a tradition of Biblical interpretation, just as any constitutional interpretation will be part of a tradition of constitutional interpretation. Rationalism in religion is just as much an error as rationalism in politics.
The above is a non sequitur. Even people who think the Bible is the literal, inspired word of God, with no errors at inception, can disagree over what God meant when He said such-and-such. But there are plenty of other Christians who don’t think the Bible is the inspired word of God. And, there are even Christians who think it is the inspired word of God, but that the human authors added their own idiosyncrasies and so it’s all a big metaphor for how much God loves us. But it’s not a history or science book! (these people say).
So it’s true that if you think the stuff I quoted above is just a story akin to tales about Hercules, fine, I agree I would need to look outside the Bible to make you take its contents seriously. But Gene seems to be saying that nowhere does the Bible suggest that the way to know God’s nature is to read other parts of the Bible, and I don’t think that is correct.
Onion on Anarchy
From the article “New Poll Finds 86 Percent Of Americans Don’t Want To Have A Country Anymore”:
“I already belong to a health club, a church, and the Kiwanis Club,” Tammy Golden of Los Angeles wrote. “I’m a member of the Von’s Grocery Super Savers, which gets me a discount on certain groceries. These are all well-managed organizations with real benefits. None of them send me a confusing bill once a year and make me work it out myself, then throw me in jail if I get it wrong.”
DeLong Flirts With Notion That Stimulus Efforts Thus Far Have Gained Nothing on the Margin
It’s ironic. In this lengthy essay, Brad DeLong is obviously arguing about the urgent need for more stimulus. Yet he tries so hard that he achieves the opposite result he intended. (Sort of like me on the dating scene in college.) Here’s DeLong:
In the 12 years of the Great Depression – between the stock-market crash of 1929 and America’s mobilization for World War II – production in the United States averaged roughly 15% below the pre-depression trend, implying a total output shortfall equal to 1.8 years of GDP. Today, even if US production returns to its stable-inflation output potential by 2017 – a huge “if” – the US will have incurred an output shortfall equivalent to 60% of a year’s GDP.
In fact, the losses from what I have been calling the “Lesser Depression” will almost certainly not be over in 2017. There is no moral equivalent of war on the horizon to pull the US into a mighty boom and erase the shadow cast by the downturn; and when I take present values and project the US economy’s lower-trend growth into the future, I cannot reckon the present value of the additional loss at less than a further 100% of a year’s output today – for a total cost of 1.6 years of GDP. The damage is thus almost equal to that of the Great Depression… [Bold added.]
Now I know, I know, DeLong, Krugman, Thoma, Baker, et al. wanted more stimulus from the get-go. But it sounds like DeLong is here saying that the 50% increase in federal debt since 2008, as well as the tripling of the Fed’s balance sheet, have achieved virtually nothing. Remember, the way everybody justified those things–even as the economy stayed in the crapper lo these many years–was to say, “Sure, but use counterfactuals: Had we done nothing, this would have been like the Great Depression.”
According to DeLong, this is (almost) like the Great Depression.
In the same vein, let’s see just how dire things are, in DeLong’s view, from our inadequate stimulus efforts thus far. He writes:
Nevertheless, my conclusion is that I should stop calling the current episode the Lesser Depression. Yes, its shape is different from that of the Great Depression; but, so far at least, there is no reason to rank it any lower in the hierarchy of macroeconomic disasters.
The US bond market agrees with me. Since 1975, the nominal annual premium on the 30-year Treasury bill has averaged 2.2%…The current 30-year T-bill yields 3.2% annually…The US Federal Reserve keeps the short-term nominal T-bill rate near 1% only when the economy is depressed, capacity is slack, labor is idle, and the principal risk is deflation rather than upward pressure on prices. Since WWII, the US unemployment rate has averaged 8% when the short-term nominal T-bill rate is 2% or lower.
That is the future that the bond market sees for America: a slack and depressed economy, if not for the next generation, at least for most of it. [Bold added.]
Wow! We increased the federal debt by 50%, and tripled the Fed’s balance sheet…and yet DeLong is saying we are still screwed for at least most of the next generation. We need to borrow and print even more to at least let our kids see what a good economy looks like, at some point in their lives.
Is this the story people were telling us back in 2008? Does anyone remember DeLong saying something like:
[FAKE DELONG QUOTE FROM 2008]: Don’t listen to those nutjob Austrians who want to let the investment bankers eat their bad loans! The economy would be absolutely awful if you follow their liquidatonist advice. What you need to do, see, is bail out the banks, and spend such-and-such for everything to be fine; trust us, we’ve read Keynes. Oh, by the way, should you for some reason only do 85% of what we tell you, then we will have a repeat of the Great Depression and your kids will think 8% unemployment is normal. So don’t wuss out on us.
?
I sure don’t. I think that might have influenced the public’s acceptance of the stimulus package and various rounds of QE, had DeLong explained that upfront.
Recent Comments