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“Cranking Up For 2016”: Pledging Allegiance To Charlatans And Cranks

Scott Walker, the governor of Wisconsin, is said to be a rising contender for the Republican presidential nomination. So, on Wednesday, he did what, these days, any ambitious Republican must, and pledged allegiance to charlatans and cranks.

For those unfamiliar with the phrase, “charlatans and cranks” is associated with N. Gregory Mankiw, a professor at Harvard who served for a time as George W. Bush’s chief economic adviser. In the first edition of his best-selling economics textbook, Mr. Mankiw used those words to ridicule “supply-siders” who promised that tax cuts would have such magic effects on the economy that deficits would go down, not up.

But, on Wednesday, Mr. Walker, in what was clearly a rite of passage into serious candidacy, spoke at a dinner at Manhattan’s “21” Club hosted by the three most prominent supply-siders: Art Laffer (he of the curve); Larry Kudlow of CNBC; and Stephen Moore, chief economist of the Heritage Foundation. Politico pointed out that Rick Perry, the former governor of Texas, attended a similar event last month. Clearly, to be a Republican contender you have to court the powerful charlatan caucus.

So a doctrine that even Republican economists consider dangerous nonsense has become party orthodoxy. And what makes this political triumph especially remarkable is that it comes just as the doctrine’s high priests have been setting new standards for utter, epic predictive failure.

I’m not talking about the fact that supply-siders didn’t see the crisis coming, although they didn’t. Mr. Moore published a 2004 book titled “Bullish on Bush,” asserting that the Bush agenda was creating a permanently stronger economy. Mr. Kudlow sneered at the “bubbleheads” asserting that inflated home prices were due for a crash. Still, you could argue that few economists of any stripe fully foresaw the coming disaster.

You can’t say the same, however, about postcrisis developments, where the people Mr. Walker was courting have spent years warning about the wrong things. “Get ready for inflation and higher interest rates” was the title of a June 2009 op-ed article in The Wall Street Journal by Mr. Laffer; what followed were the lowest inflation in two generations and the lowest interest rates in history. Mr. Kudlow and Mr. Moore both predicted 1970s-style stagflation.

To be fair, Mr. Kudlow and Mr. Laffer eventually admitted that they had been wrong. Neither has, however, given any indication of reconsidering his views, let alone conceding the possibility that the much-hated Keynesians, who have gotten most things right even as the supply-siders were getting everything wrong, might be on to something. Mr. Kudlow describes the failure of runaway inflation to materialize — something he has been predicting since 2008 — as “miraculous.”

Something else worth noting: as befits his position at Heritage, Mr. Moore likes to publish articles filled with lots of numbers. But his numbers are consistently wrong; they’re for the wrong years, or just plain not what the original sources say. And somehow these errors always run in the direction he wants.

So what does it say about the current state of the G.O.P. that discussion of economic policy is now monopolized by people who have been wrong about everything, have learned nothing from the experience, and can’t even get their numbers straight?

The answer, I’d suggest, runs deeper than economic doctrine. Across the board, the modern American right seems to have abandoned the idea that there is an objective reality out there, even if it’s not what your prejudices say should be happening. What are you going to believe, right-wing doctrine or your own lying eyes? These days, the doctrine wins.

Look at another issue, health reform. Before the Affordable Care Act went into effect, conservatives predicted disaster: health costs would soar, the deficit would explode, more people would lose insurance than gain it. They were wrong on all counts. But, in their rhetoric, even in the alleged facts (none of them true) people like Mr. Moore put in their articles, they simply ignore this reality. Reading them, you’d think that the dismal failure they wrongly predicted had actually happened.

Then there’s foreign policy. This week Jeb Bush tried to demonstrate his chops in that area, unveiling his team of expert advisers — who are, sure enough, the very people who insisted that the Iraqis would welcome us as liberators.

And don’t get me started on climate change.

Along with this denial of reality comes an absence of personal accountability. If anything, alleged experts seem to get points by showing that they’re willing to keep saying the same things no matter how embarrassingly wrong they’ve been in the past.

But let’s go back to those economic charlatans and cranks: Clearly, failure has only made them stronger, and now they are political kingmakers. Be very, very afraid.

 

By: Paul Krugman, Op-Ed Columnist, The New York Times, February 20, 2015

February 23, 2015 Posted by | Economic Policy, GOP Presidential Candidates, Scott Walker | , , , , , , , | Leave a comment

“Hypocrisy,” Say Morons

Elephants and facts just don't seem to go together

Stephen Moore of the Wall Street Journal editorial page, simultaneously reporting and propagating the Republican line du jour, accuses President Obama of a fiscal flip-flop:

Republicans plan to hammer the debt and deficit hypocrisy theme in the days and weeks ahead. White House economic adviser Larry Summers has lectured Congressional Democrats that now is a good time for the federal government to borrow to “stimulate demand” because interest rates are low. Yet the President keeps insisting that fiscal responsibility is an important priority of the White House. Republicans are having a field day. A recent email blast reminded supporters of a statement made by President Obama on November 18th: “It is important though to recognize if we keep on adding to the debt, even in the midst of this recession, that at some point, people could lose confidence in the U.S. economy in a way that could actually cause a double dip recession.”

Fiscal schizophrenia reigns in the White House.

Okay, let’s go back and read what Obama said last November 18th:

There may be some tax provisions that can encourage businesses to hire sooner rather than sitting on the sidelines; so, we’re taking a look at those. I think it is important though to recognize that if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the US economy in a way that could actually lead to a double-dip recession.

And so one of the trickiest things we’re doing right now, is to on the one hand make sure the recovery is supported and not withdraw a lot of money either with tax increases or big spending cuts – and states, for example, need a lot of support to keep hiring teachers and so forth – at the same time, making sure that we’re setting up a pathway longterm for deficit reduction.

Got that? Obama was saying the same thing he’s saying now. In the short run, we have an economic crisis that requires deficits. In the long-run, we’ll need to reduce the deficit. (And the long-term costs of temporary stimulus are pretty low.) Indeed, taking steps that increase long-term deficits could actually hurt in the short run. These are not contradictory ideas. Indeed, in his November interview, Obama endorsed the very notion (helping states mitigate budget cuts for teachers and other things) that he’s pushing for right now.

Moore and the Republicans think it’s “hypocrisy” to be for high deficits during a liquidity crisis but against them during a recovery. Really. The whole Republican message is based on not understanding this distinction.

By:  Jonathan Chait-The New Republic-June 18, 2010

June 18, 2010 Posted by | Economy | , , , , , , , , | Leave a comment

   

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