Sunday, March 10, 2013

Sachs is getting hammered

Mark Thoma
ProGrowthLiberal
Brad DeLong
Simon Wren-Lewis

Tyler Cowen thinks it's "essential reading". That's disappointing. Like I said, as analysis of the situation Sachs's Huffington Post piece especially wasn't all that bad. It would be nice if Cowen would acknowledge that it was a horribly executed and entirely uncalled for hit piece on Krugman that as a result probably makes good policy less likely.

27 comments:

  1. There is definitely something of a martial spirit amongst economists.

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  2. After the hatchet job Krugman did on John Cochrane a few years back, I have a hard time drumming up sympathy for him when someone else distorts his views. Sachs analysis was basically spot on. Who cares if he got in some blows @ Krugman below the belt?

    Maybe that isn't fair. But I also didn't see any posts on this blog about how Krugman should be "ashamed" for distoring Cochrane's views. So I can live with being a little unfair if everyone else can.

    And has Sach's op-ed *really* made any policy (good or bad) less likely? Hardly. Talk about buying into the hype of the commentariat. "These glorified letters to the editor really *matter*!"

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    1. Dude - the whole problem is he WASN'T spot on. He completely botched pretty much everything him he threw at him.

      I am not sure I'd call anything I've seen about Cochrane a "hatchet job", but perhaps I'd have to review what you specifically have in mind.

      re: "And has Sach's op-ed *really* made any policy (good or bad) less likely? Hardly. Talk about buying into the hype of the commentariat. "These glorified letters to the editor really *matter*!""

      These guys actually talk to policymakers, Wayne - certainly Sachs does. I'm not sure how much direct contact Krugman has, but he's in the loop enough to get noticed by European heads of state. The sort of damage is cumulative. If Sachs really thinks infrastructure investment would be a good idea he could be forming a common front with Krugman on fiscal policy. Just like if Sumner really thinks monetary accommodation is a good idea he could be forming a common front on monetary policy. Instead these guys just seem intent on creating the view that Krugman is fringe and there is extensive disagreement on these questions. One column isn't a nail in the coffin, but a habit of this makes the community of economists look more divided than it really is on these questions, which makes good policy less likely.

      When big names weigh in, it matters. People still cite Barro's WSJ column on stimulus, for example, when they discuss these things.

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    2. How can one do a hatchet job on someone whose salary at U. Chicago is paid by a hedge fund? And, let's remember that Cochrane was part of this three-way, using $700 bottles of wine

      http://tpmmuckraker.talkingpointsmemo.com/2011/07/mystery_solved_ryans_dinner_dates_ided.php?ref=fpa

      Cochrane, the other, more tempered dinner companion, is the AQR Capital Management Distinguished Service Professor of Finance at the University of Chicago, an apparent tip of the hat to the contributions Asness’ AQR Capital Management has made to the Booth School of Business there.

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    3. this is Cochrane's response to Krugman. http://modeledbehavior.com/2009/09/11/john-cochrane-responds-to-paul-krugman-full-text/

      Ctrl + f for 'insults' and you get to the section where Cochrane discusses the 'hatchet job'aspect of Krugman's article. I included it below:

      The level of personal attack in this article, and fudging of the facts to achieve it, is simply amazing.

      "As one little example (ok, I’m a bit sensitive), take my quotation about carpenters in Nevada. I didn’t write this. It’s a quote, taken out of context, from a bloomberg.com article written by a rather dense reporter who I spent about 10 hours with patiently trying to explain some basics. (It’s the last time I’ll do that!) I was trying to explain how sectoral shifts contribute to unemployment. Krugman follows it by a lie — I never asserted that “it take mass unemployment across the whole nation to get carpenters to move out of Nevada.” You can’t even dredge up a quote for that monstrosity.

      What’s the point? I don’t think Paul disagrees that sectoral shifts result in some unemployment, so the quote actually makes sense as economics. The only point is to make me, personally, seem heartless — a pure, personal, calumnious attack, having nothing to do with economics.

      Bob Lucas has written extensively on Keynesian and monetarist economics, sensibly and even-handedly. Krugman chooses to quote a joke, made back in 1980 at a lunch talk to some business school alumni. Really, this is on the level of the picture of Barack Obama with Bill Ayres that Sean Hannity likes to show on Fox News."

      continued in next post

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    4. "It goes on. Krugman asserts that I and others “believe” “that an increase in government spending cannot, under any circumstances, increase employment,” or that we “argued that price fluctuations and shocks to demand actually had nothing to do with the business cycle.” These are just gross distortions, unsupported by any documentation, let alone professional writing. And Krugman knows better. All economic models are simplified to exhibit one point; we all understand the real world is more complicated; and his job is supposed to be to explain that to lay readers. It would be no different than if we were to look up Paul’s early work which assumed away transport costs and claim “Paul Krugman believes ocean shipping is free, how stupid” in the Wall Street Journal.

      Of course the idea that any of us do what we do because we’re paid off by fancy Wall Street salaries or cushy sabbaticals at Hoover is just ridiculous. (If Krugman knew anything about hedge funds he’d know that believing in efficient markets disqualifies you for employment. Nobody wants a guy who thinks you can’t make any money trading!) And given Krugman’s speaking fees and how much the looney right likes him, it’s a surprising first stone for him to cast.

      Apparently, salacious prose, ethical innuendo, calumny, and selective quotation from media aren’t enough: Krugman added cartoons to try to make opponents look silly. The Lucas-Blanchard-Bernanke conspiratorial cocktail party celebrating the end of recessions is a fiction. So is their despondent gloom on reading “recession” in the paper. Nobody at a conference looks like Dr. Pangloss with wild hair and a suit from the 1800s. (OK, Randy Wright has the hair, but not the suit.) Keynes did not reappear at the NBER to be booed as an “outsider.” Why are you allowed to make things up in pictures that wouldn’t pass even the Times’ weak fact-checking in words?

      Well, perhaps we got off easy. This all was mild compared to Krugman’s vicious obituary of Milton Friedman in the New York Review of Books. But most of all, Paul isn’t doing his job. He’s supposed to read, explain, and criticize things economists write, and preferably real professional writing, not interviews, opeds and blog posts. At a minimum, this leads to the unavoidable conclusion that Krugman simply isn’t reading real economics anymore. Well, the equations are hard. But most of all, who cares about Paul’s character assassination attempts of us boring and politically unimportant academics?"

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    5. Dan,

      It seems to me the Gods have intervened, to my favor, proving my argument that, now, mostly commenting on blogs is about impeaching through the proof of incentive caused bias.

      Cochrane, apparently, wrote, "Of course the idea that any of us do what we do because we’re paid off by fancy Wall Street salaries"

      Now, most Americans would believe that a three way in a Washington restaurant with $700 bottles of wine was a pretty good pay off, especially if the bill was footed, directly or indirectly, by a hedge fund that also pays your salary, etc., at the University of Chicago.

      Mother Theresa was never in line for the AQR Capital Management Chair at Booth.

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    6. Vicious obituary, What the truth hurts?

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    7. @The Narrator

      Thanks for posting the link to Cochrane's response to Krugman. I probably wasn't going to bother. I doubt Dan missed it a few years ago. He just chose not to comment on it then (wonder why), so I doubt he will choose to comment on it now. But I appreciate you taking the time.

      @Dan

      I loved this line:
      "If Sachs really thinks infrastructure investment would be a good idea he could be forming a common front with Krugman on fiscal policy."

      It seems like one could say the same thing of Krugman. But I have not seem him politely reaching out to people that mostly agree with him (like Sumner) to build a coalition to advance his policy agenda. Instead, he seems pretty intent on insulting everyone and making himself sound like the lone voice of reason in a world gone mad. That's how he characterized himself in the Bush years and I don't think his conception of himself has changed.

      Not that it matters. Krugman is probably the most widely read economic commentator in America and his influence on policy seems to be nill. If you want to blame that on Sumner or Sachs or anyone else, go right ahead. I'm sure you're right.

      I also loved this:
      "When big names weigh in, it matters. People still cite Barro's WSJ column on stimulus, for example, when they discuss these things."

      I'm sure people cite Barro because he changed their minds. If he had not written his ope-ed, NO ONE would give conservative critics the time of day!!! I mean, NO ONE in Washington holds a policy position that isn't pre-endorsed by a ivy league economist, right?

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    8. Wayne, if you want to point me to a point where Krugman took someone who largely agrees with him and insulted him, please do. As far as I know this has never happened with Sumner (the example you raise). I may have missed something, though. Sumner, alternatively, has done this repeatedly with Krugman.

      Krugman can be rough with people but I honestly can't think of any cases where he tries to invent conflict when there is actually a fair amount of agreement. He criticizes people he disagrees with.

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    9. Um. John Cochrane? They obviously differ in terms of politics, but Krugman attacked him on points of economics that they agree on. For example, as noted above, Kruman claimed Cochrane believed "increase in government spending cannot, under any circumstances, increase employment".

      Simply false. But that hasn't stopped Krugman from continuing to insist that Cochrane actually believes this (see pretty much any post on the "Dark Age of Macro" and how Cochrane supports the "Treasury View").

      All the relevant links are here:
      http://modeledbehavior.com/2009/09/11/john-cochrane-responds-to-paul-krugman-full-text/

      But like I said earlier, if you couldn't be bothered to call Krugman out on this distortion 4 years ago, why should I expect you to do so now? I guess you can't bite the hand that feeds you (or the prominent economist that occasionally links to you).

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    10. In addition, I would also check out an earlier exchange (which actually started the exchange in the link above).

      First, Cochrane posts this essay on Fiscal Stimulus, "Fiscal Stimulus, Fiscal Inflation or Fiscal Fallacies?".
      http://faculty.chicagobooth.edu/john.cochrane/research/papers/fiscal2.htm

      Krugman claims that in the essay Cochrane is confusing an identity with an equilibrium condition.
      http://krugman.blogs.nytimes.com/2009/01/27/a-dark-age-of-macroeconomics-wonkish/

      Cochrane points out that Krugman didn't read his essay correctly (or at all):
      http://faculty.chicagobooth.edu/john.cochrane/research/news.htm

      Krugman apparently ignores Cochrane's response and then accuses him of subscribing to the Treasury View in his magazine article later that year.
      http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html


      ARRRRR. I told myself I wasn't going to bother tracking all this down. But I did it anyways. Even though I already know your response will either be to ignore it or go on some long "I'm sure what Krugman meant to say was...." speal.

      In any either case I don't have time for it. Read it, don't read it.

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    11. re: "But like I said earlier, if you couldn't be bothered to call Krugman out on this distortion 4 years ago, why should I expect you to do so now? I guess you can't bite the hand that feeds you (or the prominent economist that occasionally links to you)."

      Screw you. This makes me not want to go through and reread your links. I remember the discussion and have the impression that Krugman had the better case, but like I said I'd have to revisit. Having this crap thrown at me by someone I don't even know doesn't exactly entice me to drop everything and do that, though.

      Could you stop acting like I'm some kind of brute when it comes to Cochrane? A search indicates I haven't commented on him and Krugman as far as I can tell, but I have several posts defending Cochrane against DeLong (who is far more generous linking me), and stating my agreement with Cochrane. So stop trolling - if there's a difference of opinion here there's a legitimate disagreement.

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    12. OK I did the word search that Cochrane directed me to in his response that you linked to and it's not coming up with anything.

      If you're just going to provide me with a flurry of links where Cochrane's concerns aren't even clear to me, and then insult me, I can't put much more effort into this myself. Sorry.

      Btw - if you read this blog you'd know that on many occasions I've expressed my disagreement with Krugman's NY Times Magazine piece. You seem to have just convinced yourself that I think a certain way and are hell bent on that regardless of the evidence.

      If Cochrane was an advocate of fiscal stimulus then I'm going to have to post on this and criticize Krugman for the same things that I criticize Sumner for. But so far as I know, Cochrane did not like the stimulus. Am I wrong?

      I hate to disappoint your conspiracy theories, but partisanship or some kind of chumminess with DeLong and Krugman isn't what drives this blog. I like them because I like their contributions.

      Now either stop trolling or stop commenting, please.

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    13. I'm not trolling. You asked for an example and I gave you one. If you don't want to comment that is fine. Like I said, I wasn't expecting it.

      In terms of defending Cochrane against Delong, did you ever say Delong's comments were "embarrassing" as you did with Sachs when you though he distorted someone else's views? I kinda doubt it.

      For someone that throws strong language (against Sach, Bourdeux, etc) at his intellectual opponents, you seem pretty quick to anger when someone directs similar language at you. Don't you like to say that words are supposed to be a little wild?

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    14. Give me a break, Wayne. Mentioning Cochrane is not what I'm calling trolling and you know it.

      I didn't find DeLong's posts "embarassing". I just found them wrong. Sachs's comments were embarrassingly bad.

      re: "For someone that throws strong language (against Sach, Bourdeux, etc) at his intellectual opponents, you seem pretty quick to anger when someone directs similar language at you."

      I've never accused Boudreaux of saying anything he says to curry favor with anyone. In fact I've criticized people on many occasions for saying that he's bought and paid for by the Kochs brothers, etc.

      Don't expect me to respect you when you accuse me of that sort of thing - of duplicity or favoritism.

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    15. More substantively I don't know exactly what Cochrane's concerns were. I followed your response link, did the search on the section he directed people to search for (he didn't provide an argument in that link - he just referred people back to a section of his paper) and it didn't come up.

      This was a while ago, I don't remember the details.

      Needless to say, I'm not taking the fact that you and Cochrane disagreed with Krugman as evidence that I've done anything wrong here.

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    16. "More substantively I don't know exactly what Cochrane's concerns were."

      Now you are the one that is trolling. I specifically quoted 2 of Cochranes concerns. First, in the magazine article, I *quoted* Krugman accusing Cochrane of believing that Fiscal Stimulus could never increase employment (you also have the link to this). However, as Cochrane notes in his response to the magazine article, Krugman does not actually document you this with anything Cochrane has written (you also have the link to this) and he can't because it isn't what Cochrane believes. What more can I say? I've alread provided Krugman's original quote which contains no documented support. Not sure what else you want me to do.

      Second, Krugman accuses Cochrane treating an accounting identity like an equilibrium condition (i gave you the link). Cochrane points out that this is not the case and quotes the original essay to illustrate this: "Paul says I treat S=I as an identity, not an equilibrium condition. Keep reading, Paul, down to “aggregate demand has fallen.. deflationary pressure…” where nominal GDP is adjusting to equilibrate S and I. ". I gave you the link for this as well.

      I am not sure what else you want.

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    17. Wayne, for the second time:

      I followed that exact link.
      I read that exact thing you just quoted from Cochrane.
      I followed Cochrane's link.
      I did a word search on what Cochrane offered (what you quote here).
      Nothing came up on the word search.

      I have no idea what he's quoting from and I'm not inclined to pursue this further from a guy that just comes on here and blasts me, when I've given Krugman and Cochrane a fair hearing historically, particularly when you've taken over my comment thread on a post that has nothing to do with Cochrane.

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    18. Daniel I too remember this exchange and remember thinking as usual Krugman is being kind of an ass but nothing out of the ordinary. I mean come on, Krugman shrugs off people saying he is the spawn of Satan all the time. Then he calls someone an idiot and they act like he shot their mother.

      From the Narrator quoting the Cochrane response:

      Krugman follows it by a lie — I never asserted that “it take mass unemployment across the whole nation to get carpenters to move out of Nevada.” You can’t even dredge up a quote for that monstrosity.

      Now go to Krugman's piece here:

      http://www.nytimes.com/2009/09/06/magazine/06Economic-t.html?pagewanted=all&_r=0

      Search for carpenters and see what Krugman actually wrote. Interesting he's not quoting Cochrane there... So Cochrane is responding to a quote that never happened.

      Once I find a blatant error it does not make me want to look up the rest but regardless this "vicious" attack by Krugman looks pretty tame as usual.

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  3. Appreciate thiѕ post. Let me try it out.


    Feel free to νіѕit my homеpage
    ... cystic acne

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  4. interesting, so at first it seemed to me that brad DeLong was rgith when he wrote that Sachs and the other guy were being dishonest in saying that Krugman had said that deficits don't matter, but then I read the actual columns and op-ed and it now seems to me that DeLong was the one being dishonest.

    - Sachs and the other guy say that Krugman says that deficits don't matter.
    - Krugman in his column says that deficits don't matter now *right now*, but that there are possible scenarios in which deficits *could* matter, even though he says that "At this point I have to say that I DON’T EXPECT THIS TO HAPPEN —"
    - Then Brad DeLong characterizes the supposed dishonesty of Sachs and the other guy by saying: "You do not say "X says Y" and then cite to a work in which "X says not Y. [...] In other words, to support the claim that Krugman said deficits don't matter, Scarborough and Sachs point to Krugman saying explicitly that people who say deficits don't matter are wrong."

    But Sachs and the other say didnt say that Krugman said that deficits *never* matter, only that they "don't" matter, leaving open for which time frame this 'not mattering' holds. But since their article was exactly arguing that deficits do matter right now and that the deficits are hindering recovery and that Krugman disagrees with that, it seems clear that they are talking about 'right now', not about for example possible scenarios of a post-recovery situation (in which krugman might agree that deficits would matter). And so they do describe Kruigman's position absolutely correctly. And DeLong characterizes their point absolutely incorrectly.

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  5. Daniel,

    This is completely off the subject, but I have a question for you. I am currently working through Iris Marion Young's Responsibility For Justice (2012), and she makes a bunch of claims about housing shortages that seem obviously wrong. I am not an economist, so I do not know, although I am familiar with standard textbook explanations (zoning & land-use restrictions; rent control; ownership incentives (e.g., tax deductions), etc.). I was wondering if you could give me a brief reaction to the following statement (I do not have time over the next few months to really research the issue, I just wanted to see what you think the mainstream economist view is on these matters):

    “Vulnerability to housing deprivation for large numbers of people is nevertheless a normal outcome of contemporary housing markets in the absence of aggressive regulatory intervention to prevent it. Free markets can deliver many kinds of goods to most people who want them relatively efficiently. Decent housing appears to be too costly, however, for this to be possible in most urban areas.” Young, Responsibility For Justice, at 64.

    Thanks, I appreciate it.

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    1. Lemme post on it and see what people think.

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  6. Daniel wrote: "I've never accused Boudreaux of saying anything he says to curry favor with anyone."

    Did Wayne say that you did? I thought he only said that you used strong language wrt Boudreaux. And that is just factually true. I mean, you wrote "I find it disgusting that economics professors are either distorting what's going on or even cheering it."
    Moreover, you didn't take those strong words back when I pointed out the error in your argument that led you to make such strong statements.

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    1. That I know of, I've never done to Boudreaux what I am pissed that Wayne did to me.

      Of course I've been critical of Boudreaux. So?

      What is your concern with strong words?

      I'm pissed at the suggestion that what I'm doing isn't above board or honest - not that what I'm saying is wrong.

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