At Cafe Hayek they like to point out that they're against all politicians - they aren't Republican or Democrat. This is obviously true. I'm not a Republican or a Democrat either and what I write here is not informed by partisan politics, even if I may consider Democrats somewhat more palatable than Republicans. In the same way, they consider the Tea Party (i.e. - Republicans) somewhat more palatable than Democrats. That's fine. But if you're going to make the claim that your positions aren't informed by party, keep your analysis consistent no matter who you're dealing with. Critique this Heritage analysis - call it a hoax. Or retract that previous post. Don't call high multiplier estimates "ex post story telling" and deceptive econometrics (the Ed Leamer point they raise), and then favorably cite Barro's low multiplier estimates. Be consistent.
Thursday, April 14, 2011
Posted by dkuehn at 11:01 AM
Menzie Chinn has a more detailed post on the Heritage IHS Global Insight model of the Ryan Plan, and this post focuses on precisely what I highlighted: the labor elasticities and the crowding out assumptions. Russ Roberts really needs to weigh in on this. It bothers me a great deal that a professional like him would accuse colleagues of promoting a "hoax" for using standard econometric practice. Critiques can always be raised. Do you disagree with their assumptions? Where do they get their assumptions? Ought we to invoke the Lucas Critique? etc. By all means, go over these points, but before you call it a "hoax" as Russ has, at least recognize the extent to which they've laid out all their assumptions and simply said "this is our best guide right now". If Russ isn't satisfied, fine - Russ isn't satisfied. But don't go around calling the position of those you disagree with a "hoax" and then stay dead silent when people more politically sympathetic to you use the exact same modeling strategy. He needs to be re-posting the hell out of these critiques of the Heritage analysis. If the sort of macro-modeling that CBO, Zandi, Romer, etc. did was a "hoax" and by its very nature illegitimate, then Russ needs to be a voice in the conservative/libertarian community asserting that the emperor has not clothes when it comes to the analysis of the Ryan budget too. I disagree with Russ. I think these analyses are useful, despite the fact that they obviously have limits and liabilities. I didn't critique them when they did it for the stimulus, and my only critique of the Heritage analysis is for their assumptions - not for their modeling strategy.