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February 17, 2013

Latest Posts from Economist's View


Latest Posts from Economist's View


Posted: 11 Feb 2013 12:24 AM PST
The "partisan divide runs much deeper than even pessimists are usually willing to admit":
The Ignorance Caucus, by Paul Krugman, Commentary, NY Times: Last week Eric Cantor, the House majority leader,... tried to sound interested in serious policy discussion. But he didn't succeed — and that was no accident. For these days his party dislikes the whole idea of applying critical thinking and evidence to policy questions. And no, that's not a caricature: Last year the Texas G.O.P. explicitly condemned efforts to teach "critical thinking skills," because, it said, such efforts "have the purpose of challenging the student's fixed beliefs and undermining parental authority." ...
Want other examples of the ignorance caucus at work? Start with health care...
Still, the desire to perpetuate ignorance on matters medical is nothing compared with the desire to kill climate research, where Mr. Cantor's colleagues ... have engaged in furious witch hunts against scientists who find evidence they don't like. ...
And there are many other examples... Do actions like this have important effects? Well, consider the agonized discussions of gun policy that followed the Newtown massacre. It would be helpful to these discussions if we had a good grasp of the facts about firearms and violence. But we don't, because back in the 1990s conservative politicians, acting on behalf of the National Rifle Association, bullied federal agencies into ceasing just about all research into the issue. Willful ignorance matters.
O.K., at this point the conventions of punditry call for saying something to demonstrate my evenhandedness, something along the lines of "Democrats do it too." But while Democrats, being human, often read evidence selectively and choose to believe things that make them comfortable, there really isn't anything equivalent to Republicans' active hostility to collecting evidence in the first place.
The truth is that America's partisan divide runs much deeper than even pessimists are usually willing to admit; the parties aren't just divided on values and policy views, they're divided over epistemology. One side believes, at least in principle, in letting its policy views be shaped by facts; the other believes in suppressing the facts if they contradict its fixed beliefs.
In her parting shot on leaving the State Department, Hillary Clinton said of her Republican critics, "They just will not live in an evidence-based world." She was referring specifically to the Benghazi controversy, but her point applies much more generally. And for all the talk of reforming and reinventing the G.O.P., the ignorance caucus retains a firm grip on the party's heart and mind.
Posted: 11 Feb 2013 12:03 AM PST
Posted: 10 Feb 2013 05:31 PM PST
Jim Hamilton says:
Those who have been told that oil production is booming may be wondering why the prices of oil and gasoline are climbing again.
Here's his explanation.
Posted: 10 Feb 2013 10:03 AM PST
Ryan Avent:
The austerity is real, by Ryan Avent: Tyler Cowen is quick to link to pieces calling into question the extent to which austerity plans have been austere. Here is the latest example. He quotes a Washington Post story...
But if this is so, then why is a bank like Goldman Sachs, which has little incentive as far as I can tell to stumble dumbly into rah-rah Keynesianism, warning of an ongoing, significant decline in federal government spending? ...... [T]he ... "austerity" of 2011-2012 wasn't "austerity" but austerity. Federal government spending fell by a meaningful share of GDP over that period. So did federal government employment, which dropped by 31,000 jobs in 2011 and 45,000 jobs in 2012. What's more, we have good reason to believe that these cuts entailed positive multipliers above those we'd observe in normal times. You don't have to take the IMF's word for it; even stimulus skeptics like Valerie Ramey find that multipliers may sometimes be above normal, and above one, during periods of economic slack.
The cuts may amount to less than initial rhetoric suggested (and who is surprised!). They may not "hurt" in the way small-government types would wish them to hurt, in that meaningful reductions in the resources available to state interests or state-dependent interests have not come to much. But that does not mean that spending hasn't fallen, by a significant amount, with clear impacts for the macroeconomy and those within it who would like to be working but aren't.
I wish I could cheer -- yahoo!!!, the government didn't enact policies that slow the recovery and result in higher unemployment after all. But I just don't think that's true. We do need to tame the debt in the long-run (mainly health care costs!), but the zeal to solve this problem now, when it hurts the economy much more than it would if we were closer to full employment, is puzzling. I get where some people are coming from on this issue, but I don't understand how they can be so indifferent to the struggles of people who just want a decent job but can't find one no matter how hard they try. Jobs, and the long-run harm that comes from high unemployment ought to be our main concern right now.

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