Thursday, April 14, 2011

Why isn't Russ Roberts re-posting the hell out of this?

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.

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.


  1. My first thought was, "You still read Cafe Hayek?" That blog got kind of boring a long time ago. I mean, I love the podcast by Roberts, but it isn't a terribly interesting blog.

  2. I check in but don't get all that involved.

    His post calling the other modeling work a "hoax" was from many months ago. I found it very condescending. That's bad enough but it's even more frustrating when it isn't applied equally to all front-page results of the exact same type of model.

    The other grating thing is that of the four people who authored the Heritage analysis, one used to work at George Mason and the other was a student in their econ department.

  3. GMU people are now working at the Heritage Foundation?

    I can imagine the group of free marketers at Auburn being mildly irritated that others of their kind would so plainly associate with Republicans, the least free market group possible.

    In fact, what are GMU folks doing discussing budgetary politics? That other Auburn crowd has taken one simple position on the budget issue: "Projected cuts or projected spending on any project is just a symbolic act, involving a fictional change in allocating money in a fictional future." They don't bother talking about budgets.

    Indeed, the concept of budgets blows my mind as well. The government will somehow fix in advance with a margin of error no greater than a billion dollars on how much money it may have to spend on projects which may require anywhere between a few billion to several tens of billions? How will they do it - by fixing prices and freezing wages, both at home and abroad without having any unpredicted situation come about?

  4. Prateek:


    The most important thing I re-learned from watching "The Wire" is that any number you see from the government has most likely been heavily massaged.

  5. Very much so... when Krugman and others on the left saw that the Romer numbers were massaged, they called her out on it big time. Where are the libertarians calling out Ryan's massaging and really delving into the details on what's going on in the analysis?

  6. That's the thing about "The Wire" - it really does take a drama of its caliber (as opposed to all the heavy-hitting reportage that David Simon did) to drive home just how screwed up things are. Greatest TV show ever made; possibly that will ever be made.

  7. As I understand, Daniel, many libertarians aren't even following the budget debate. At least the Mises.Org types.

    You see, they don't follow news much regularly, many of them claim not to even have television sets, they say that they are apolitical and don't care much about politics, and they are more into introspective, contemplative discussion.

    Did you know which place it is where I saw the most contemptuous dismissals of the Tea Party? It's Mises.Org, where posters only bring up TP to mention how racist it is, how bigoted it is, or how crazy it is. Not any progressive site. Indeed, progressives have used an unusually sympathetic tone for the Tea Party, on occasion.

    While many of those types will not defend Paul Ryan, they will not bother much on calling out Paul Ryan's massaging either. I guess they don't care.

    PS: And all I ever knew about Paul Ryan was from Krugman's blog, and Krugman's impressions of Roadmap for America gave me the idea that Paul Ryan was just a tool for making Republicans palatable. Is there ever a kind of Democrat they prop up to make him palatable to Republicans?!

  8. Prateek - I get this to a certain extent, but they talk about politics and the Obama administration all the time on (I would guess the government-related posting there is heavier than on this blog). However, if you were a libertarian that sufficiently paid attention to earlier macro-projections and made very specific methodological critiques of them (like Russ Roberts, Arnold Kling, etc.) you are (1.) most definitely aware of the Ryan plan, and (2.) ought to raise the same critiques you spent so much time on several months ago.

  9. Prateek,

    I run heavily in libertarian circles and I'd never heard of it until the other day.

    Many libertarians don't look for solutions in D.C. - they view it largely as a game of whack-a-mole as do I.

    Now there are libertarians who engage the political process, but I'd say they are the in the minority.

    Anyway, I'm happy to let Cato do the political heavy lifting - and they do it in the way that Friedman recommended - by having a ready store of alternatives and ideas ready for the times when movement is possible.

  10. Gary - I'm not so sure it's a matter of looking to Washington for solutions. Washington puts out a multi-trillion dollar budget whether you look to it for solutions or not. I think Prateek is right that many philosophers that like to wax poetic about philosophy might not think all that much about macroeconomics. But for those that do, there ought to be a symmetry in their economics.

  11. Daniel,

    Most libertarians just shrug when it comes to politics; that whole thing is going to fly apart sooner or later, so what is the point?

    "Washington puts out a multi-trillion dollar budget whether you look to it for solutions or not."

    Outside D.C. it looks like a surreal game. Obviously it has consequences, but the game itself isn't terribly interesting.

  12. re: "Most libertarians just shrug when it comes to politics"


    Are you kidding me? I have never met a group of people as interested in politics as libertarians! As I said - Prateek is right - there are contingents that are more into philosophy. But all in all it's a remarkably political bunch. You're exhibit A!

    re: "Outside D.C. it looks like a surreal game."

    Yes, but I think inside DC it is even more accurately perceived as a game. DC is a funny place. You have a lot of people deeply invested in politics because they win when a particular party wins. And then you have a ton of people that don't care about the politics at all and know what a joke it all is. Outside DC I think you have the same distinction between people who care and people who don't - but the ones who care about politics outside DC are a lot more naive than the ones that care inside DC.

    Another way to put it is - the conservatives and libertarians inside DC aren't anywhere near as strange, naive, and unquestioning as the conservatives and libertarians outside DC. Likewise, liberals inside DC are a lot more sober and normal than liberals outside DC that get worked up into a frenzy by, etc. The ideologues that do exist inside DC are opportunistically political, and the ideologues outside DC are naively political.

  13. "I have never met a group of people as interested in politics as libertarians!"

    That's really not true. Libertarians are interested in what the state is continually doing to them, but that is not the same as being interested in politics. As a class we rarely vote for example, and as a class we're generally the people who come Jan. 3rd or Jan. 20th will tell you new boss same as the old boss. You really don't get libertarians.

  14. Gary, don't tell me it's not true. I know who I've met. I've never met a group of people so excited about specific politicians as libertarians. I've never met a group of people that want to talk about government so much as libertarians. You do say "meet the new boss same as the old boss". Do say that many libertarians are fascinated by and talk all the time about politics and politicians is not to say you always like them.

    Look man - most of the politics discussion on here goes on because of what you bring up. You really need to take a step back and reevaluate the rose-colored glasses that you see your little gang through.

  15. "I've never met a group of people so excited about specific politicians as libertarians."

    Really? As opposed to Democrats and their lovefest with Obama in 2008?

    "I've never met a group of people that want to talk about government so much as libertarians."

    Yes, but that is not the same as politics. It isn't surprising; libertarianism is after all anti-thetical to government and major portions of the libertarian movement are populated with anarchists.

    Look man - most of the politics discussion..."

    I rarely talk about politics; I wouldn't even know where to start to be honest. I do talk about the government a fair amount though (and I would talk about other corporate bodies too - but you rarely touch on religion or business corporations).

  16. re: "As opposed to Democrats and their lovefest with Obama in 2008?"

    Again, the DC area difference comes in here. None of the Democrats I know had any kind of "lovefest" for Obama. Certainly they appreciated the fact that he was a great candidate to have - much better than the alternative, much better than his predecessor, and much better the last Democrat that ran - no doubt. But compared to the hero-worship of the Ron Paul crowd? Of course not. You can't have it both ways, Gary. People tell me about how electrifying Ron Paul is. People get on TV and call him "today's Thomas Jefferson" - there are all kinds of boasts about how much money he raises. You can't say all that and then turn around and tell me you don't get caught up in politicians. The libertarian lovefest for Ron Paul in 2008 was leaps and bounds more frenzied than the lovefest for Obama in 2008. I can't believe we're even arguing over that. [One exception - in the black community, for understandable reasons, the mood was qualitatively different. However, I don't think that has anything to do with whether liberals are more or less politically minded than libertarians, and that is completely understandable].

    re: "Yes, but that is not the same as politics. It isn't surprising; libertarianism is after all anti-thetical to government and major portions of the libertarian movement are populated with anarchists."

    Maybe it's just the area. When I went to a seminar at the Mercatus center at George Mason all the pre-seminar talk was about Ron Paul and Rand Paul, the election last November, how the Tea Party was doing, whether Gary Johnson (a name I hadn't heard until that night) was going to run, etc. etc. You just don't get that in departments that aren't dominated by libertarians.

  17. Daniel,

    Well, apparently I am not from that wing of the libertarian family - I mean yeah, it is cool that Paul was one candidate that had a real anti-war message in 2008, but there is more to life than that.

    If you frequented libertarian blogs you would have witnessed virtual world knife fights over Paul; lots and lots of libertarians find him to be a distraction or worse.

    This is a good example of the sorts of discussions that libertarians have about Paul:

    "The libertarian lovefest for Ron Paul in 2008 was leaps and bounds more frenzied than the lovefest for Obama in 2008."

    Really? Not in my experience.

  18. re: "If you frequented libertarian blogs you would have witnessed virtual world knife fights over Paul; lots and lots of libertarians find him to be a distraction or worse."

    I understand that - and there was substantial disagreement even among this group. When I make a statement about something that is common among libertarians, it's not that I'm suggesting all libertarians think in that way. It's quite obvious it's one of the more diverse ideologies.

    re: "Really? Not in my experience"

    This is truly astounding to me, but I'm not sure it's something we're going to get to the bottom of. I hear about obsessions with Obama from conservatives and libertarians all the time, it's true. I've never really seen all that much of it.

  19. I don't know whether Daniel or Gary is more right about American libertarians. I never met one personally.

    I know only about one single narrow online libertarian community in Mises.Org.

    Here is how they approach politics.

    You know that Jared Lee Loughner shooting? The people at Mises forums weren't even bothered about Republicans being blamed for that attack. Some even shrugged and entertained the idea that maybe Loughner was indeed Republican-motivated.

    People might instead expect an instant knee jerk reaction from these libertarians if they heard Republicans, Tea Party, or conservatives slandered over this issue. But they weren't, they shrugged, and seemed to say: go on and fire away at the Republicans.

    They don't care one bit about reputations of politicians.

    Even those who are just that close to their own positions. One of the bestselling books on Mises store is Nock's Our Enemy The State, and Joseph Sobran explains that the book's message is that the state is always dangerous, be it Democrat, Republican, libertarian, socialist, whatever. United States government could be staffed bottom up with free marketers, and these people still wouldn't trust it.

    PS: Mises Institute scholar Justin Raimondo once proudly wrote a column in which he said he refused to endorse Rand Paul after receiving a request from him to do so.

    PPS: One Mises forums moderator, William, says that he doesn't even call himself libertarian or any such name. Another prominent poster occasionally says, "You libertarians!" as if he weren't one or didn't want to be lumped with them. It's like they are

  20. Prateek,

    The Loughner reaction by a lot of the commentariat just reminded how paranoid much of the political center in the U.S. is; and how hypocritical (when the Wisconsin protestors started comparing the Wisconsin governor to Hitler not a peep about "the discourse" was heard).

    "United States government could be staffed bottom up with free marketers, and these people still wouldn't trust it."

    I am fairly close to that position.

    Justin Raimondo has also get into some back and forth arguments with some of the commentators at Reason - particularly about the Iraq War. That's back when a couple of the members of the staff/contributors supported the war - which caused all manner of trouble in the broader libertarian community I would add.


    "This is truly astounding to me..."

    I tend to tune out stuff that annoys me. Politics annoys me. The only political reporter I follow (and I can barely stand to do that, but I figure it is something I should do for cocktail party conversations) is Dave Weigel.

  21. "I check in but don't get all that involved."

    Hilarious. You comment regularly, with multiple self-referencing posts. You are involved more than anyone. You are the MOST involved. You write more than the authors of the blog.

    This is plainly a lie.


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