The economic discipline’s all in a buzz over the recent debunking of the Reinhardt/Rogoff study and with good reason. The study’s conclusions form the entire foundation for Conservative austerity and recessional spending (more appropriately, the lack thereof). Shall we not forget the “serious” budgetier Paul Ryan’s insistence of fiscal crisis proven without doubt by this very study? This is the study which legitimized the illegitimate Conservative narrative, which in turn legitimized Ryan’s illegitimate budget priorities. Romney made said narrative and this study the cornerstone of his campaign. Together, along with the Conservative propaganda-sphere they justified their position by setting up a contrasting dichotomy. Remember how it looked? They instantiated an equivocating notion of “other credible economists” who supported their wrongful approach with reliable data. The “other” being Reinhardt and Rogoff. That narrative? We don’t have a revenue problem; we have a spending problem. Now we know. The data is so seriously flawed it would be laughable were not the policy damage it caused so severe, protracted, and widespread. The truth, the reality: We have a revenue problem. A revenue crisis. Not a spending crisis. Hopefully this basic truth will reach Washington DC and the compromisers will shift their focus toward empirical reality and responsible budget planning. If Democrats agree to cut spending for the sake of compromise at this point, well… they would be as unfit to govern as their opponents.
Economist Dean Baker outlined our “spending not savings” problem after the housing bubble burst and went to every community that would have him to proclaim the same. His figures were undisputable. (Look up the links if they’re still available). And despite his academic and professional credentials, he was almost completely ignored by media and legislators. The thing to take away from this informative post by PJ is the degree to which the power elite of the world have built up their sustaining cosmos…and the sustained effort and compromise it will take to regain some democratic balance.
Agreed to the difficulty level required for an economic revolution, but many of us were acutely aware of that already. I mean look who has been at the Fed, the Treasury, the DoJ prosecuting bank fraud and who brought them into those positions. How about explaining what you would recommend needs to be done, you know, which efforts and compromises to regain balance? Please enlighten us. Serious people would like to know. Thank you.
Too true, Catkin. And right on about Baker. He was an early voice of wisdom. A good source now too.
Thanks for the links, PJ.
You’re welcome, nonquixote. And remember the old proverb: sometimes it’s easier to be nice. 🙂
Replicability is key to science, and scientists should welcome it. The errors in this paper, and the authors’ response beg an explanation.
You’ve hit the nail on the head. To disallow vetting by your peers indicates an unusual level of unprofessionalism that should have been a tipoff to any serious legislator. It is my understanding that the authors have responded. I haven’t read their response yet. I’ll find and post today.
Jim,
Here’s the Reinhart and Rogoff response. I don’t think they’ve directly addressed the criticism leveled against them. It looks more like talking points useful to any “serious” politician who may need to defend themselves for supporting the study. Points for obfuscating discussion.
http://blogs.wsj.com/economics/2013/04/16/reinhart-rogoff-response-to-critique/
Better Paul Krugman than me to explicate:
http://krugman.blogs.nytimes.com/2013/04/16/reinhart-rogoff-continued/