Who was more correct and dynamic?
by Robert Waldmann
The relative rise of the Left peaks in 2009, with the passage of Obamacare and the stimulus. From that point on, the left wing, for better or worse, is a fundamentally conservative force in the intellectual arena. It becomes reactive and loses some of its previous creativity.Over those years, right wing thought, on the whole, became worse and more predictable and also less interesting. But excess predictability now has infected the left wing also. Attacking stupid ideas put forward by Republicans, whether or not you think that is desirable or necessary, has become their lazy man’s way forward and it is sapping their faculties.”
I’m pretty sure I shouldn’t comment on this one. I will mention in passing that I think Cowen is totally 10% completely wrong that right wing economists in the 70s and 80s were more more correct than the left. They were certainly more dynamic. I. will. not. go. there then.
But about now, I don’t really have a clue who Cowen is talking about (always click the link –Kevin Drum). Basically, I don’t know if he is talking about academic research or public intellectuals. Well to be honest, I am fairly confident he is talking about Krugman. In any case it’s what Krugman wrote about Krugman.
I should click the link, but I will consider both possibilities.
1. Academic economists: Here there is great ferment. There are two fields which aren’t going much of anywhere (macroeconomics and theory) [on both points those are my views but I am paraphrasing Andrei Shleifer].
There is a huge amount of new interesting work on applied microeconometrics — oh hell analyzing experiments and natural experiments. The most energetic participants in this effort are leftists. There is little sitting on laurels in ivy covered halls.
In contrast, as far as I know, academic macroeconomics hasn’t changed that much. The colossal failure of standard models (which are New Keynesian not the models developed by conservatives in the 80s) has had a small effect on the literature (as far as know and as I don’t click the links you may suspect I don’t keep up). The idea that it is best to assume that bubbles can’t happen remains dominant. I stress that this is assumed in almost all New Keynesian models. Something like,say, a housing bubble or a dot com bubble is barely allowed in academic macro modelling (AFAIK).
Despair is much more common than complacency.
2. Public intellectuals and activists and such are very far from complacent. I can think of only one place I read something vaguely arguably along the lines of “our work is mostly done”. It was here.
- What would Cowen write if you couldn’t think of any recent useful contribution to any discussion make by a conservative or libertarian?
- Would he write about how it wasn’t always that way and probably won’t be that way in the future?
- Is that what he just wrote ?
- Why else would he write what he just wrote ?
crossposted with Stochastic thoughts
“I will end (hey don’t cheer) with 4 questions.”
Hey! Wrong holiday!
Well, they weren’t dynamic; they were DSGE, which I suspect is what you meant to suggest.
The fundamental problem is that the foundation of DSGE is that this is the Best of All Possible Worlds. When you start with something that structurally unsound, is it any wonder you end up with something “worse, more predictable and less interesting”? [quote edited for style]
Meanwhile, the leftist were building on Tversky and Kahneman (1974, 1981) or developing things such as Dornbusch (1986) and Krugman (1991). Even the bloody Sensible Centrists were stepping away from their father’s path–if Barro (1986) is “more correct than the left,” where does that leave DeLong (1988)?
When the best you can find from conservatives is Mankiw, Romer, and Weil (1992), you’ve pretty much shot your wad in such a way that even the best fluffer can’t make your future appear viable.
by dynamic I meant energetic and hard working. I think Cowan doesn’t admit the possibility that the profession barked up the wrong tree down a blind alley for decades.
There was at least one rightist building on Kahneman and Twersky — Andrei Shleifer (he was waaay right back then).
Mankiw Romer and Weil are 2 thirds Democrats. I mean that Romer is Christie Romer’s husband. Weil is at least definitely a Democrat. Mankiw was and is definitely salt water — a new Keynesian. He happens to be a Republican, but the paper is just let’s look at the data.
I’d say Bernanke Gertler & others did very interesting research on the financial accelerator. Macroeconomists are mainly trying to catch up. Bernanke is a Republican. Also Robert Hall (waaay right) did interesting work. But they are all salt water Republicans (Hall invented the salt vs freshwater to argue that just because he was Keynesian didn’t mean he was a pinko).
I really can’t imagine how Cowan sees the world. That’s why I should read his stuff (glossary I use “should” as a synonym for “won’t”).
My two year old two-cents on the 30 year old Republican contributions to economic progress:
30 years of Republicans fulfilling every (last) voodoo economics wish have left America awaiting a second-dip low-demand recession inside a prolonged illiquidity contraction (normal recovery 7-8 years) and US Treasury bonds downgraded and ducking default.
80’s Reagan got his 25% across the board income tax cuts — building unprecedented peacetime debt – his dereg’ing savings and loans crashing the industry. ’90’s Sen. Gramm and friends tore down the Glass-Steagall Chinese wall between retail and investment banking – not without help from Clinton Democrats — setting the stage for our much troubled 2000s. ’90s Greenspan noted Wall Street partying too hard while failing to remove the punch bowl – the burst bubble end gave us the 2001 recession.
2000’s Bush cleared away more financial reg’s — while smiling on little reg’ed shadow banking’s proliferation – converted Clinton budget surpluses into trillions in tax cuts for the better off — which cuts flooded by now much degreg’ed banks and never much reg’ed non-banks with too much savings to be lent to too many borrowers – inflating an oversize real estate bubble whose burst aftermath left said prolonged illiquidity contraction and said low demand dips — while trillions of piled up Reagan-Bush debt inhibit routine Keynesian easing of low demand dips with temporary deficit spending.
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My recent two-cents on improving schooling on the poor side of town:
Oakland won’t educate its way out of poverty and crime. Catch 22: political scientist Martin Sanchez-Jankowski, from neighboring UC Berkeley — who spent nine years in five poor New York and Los Angeles neighborhoods (and ten years before that researching street gangs) — explains in his 2008 book Cracks in the Pavement that ghetto schools don’t work mostly because students (and teachers!) don’t expect anything decent awaiting for them in the labor market, so think it hopeless to make the effort.
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Progressive economists need to spend less time arguing with the know nothings and more time addressing the GENERAL PUBLIC with a few essential facts that would change the face of the political discussion — and the course of this country — if only everybody knew, like: the federal minimum wage was almost $11 an hour 45 years ago and average income has almost doubled since.
Like: 90% of overall income goes to people above the $15 an hour line (I was making the median $15, now believe more like $16.50) — 55% of the workforce. A mere shift of 3% of that represents raising the minimum to $15 for the 45% below that line. (Imagine if we just shifted that 3% from the top 1% — just as an education exercise.)
Like: talk up legally mandated, sector-wide labor agreements as the only labor market structure in the world that — if magically imposed on the US — would straighten out 90% of our political problems tomorrow. Just get the idea out there — it wont be selling ice cubes to Eskimos. Supermarket and airline workers would kill for sector-wide. (Push it if only to put Repubs in a bad position for opposing — like Obama should for the $15 minimum wage — even if you are sure it is not “practical” to push that far (if you are male: just male hunting pack instinct; male humans seem totally “situational” when faced with any political change of direction — human females being individual gatherers much more likely to take on a topic on “merits” only).
I have to agree. In his previous examples the right/left comes up with better ideas discrediting those of the left/right, but while he argues the left has peaked, where are those better ideas of the right? Too unknown for anyone to have heard of yet?