Bruce Bartlett: Keynes was right, I was wrong

[foolsguinea.livejournal.com]

Krugman linked to this today.

Major advocate of supply-side economics admits that Keynes and Krugman have been practically completely right on the facts.

(Yep, it's another old Conservative Movement Republican complaining that when he tried to talk sense about science, reality, and data, he was shut out by the party. This is a genre now.)

It's gratifying to see one of the most influential advocates of the unsustainable wackiness called supply-side economics finally realize that this sort of policy doesn't really sustain broad economic growth.

It seems to have become a convention of corrupt politicians to strip it down to the following crude formulation: "Cut taxes. Win votes."

From where I sit, it seems supply-side politics is mostly bribery of special interests and flattery of public wishes for something-for-nothing. It's not real economic science.

P.S.: I've seen enough old conservatives in this position that I think there's a historical explanation for it. Movement Conservatism (as opposed to traditional moderate conservatism) is defined by rejecting science, reality, and data that don't fit certain preconceptions or certain ends. What they have done to Bartlett is what they and their fathers did to the liberals when they started this movement, and what they've done all along. It's the basic premise of the conservative schools, conservative media, conservative churches, and so forth--at least it's the basic premise for many in the movement. It's a shame that someone like Bartlett can't use his position to modify their thinking, but rejection of Keynes is a litmus test, apparently.

Comments

[a-new-machine.livejournal.com]

It's gratifying to see one of the most influential advocates of the unsustainable wackiness called supply-side economics finally realize that this sort of policy doesn't really sustain broad economic growth.

That isn't what he said.

I had written an op-ed for the New York Times in 2007 suggesting that it was time to retire “supply-side economics” as a school of thought. Having been deeply involved in its development, I felt that everything important the supply-siders had to say had now been fully incorporated into mainstream economics. All that was left was nutty stuff like the Laffer Curve that alienated academic economists who were otherwise sympathetic to the supply-side view. I said the supply-siders should declare victory and go home.

He thinks they've already won and made their broader points and gone as far down that path as was possible, and thus the need for the continued movement is no longer there. That's not the same as realizing that it's "unsustainable wackiness." Moreover, most of his criticisms arose first from big deficit-spending ideas pushed by the Republicans during economic expansion, not hating "supply-side wackiness." He's a supply-sider in the booms, Keynesian in the busts, by all appearances, and sees them both as useful at times but not all-encompassing.

[foolsguinea.livejournal.com]

Well, I may have been too harsh, but I maintain that supply-side politics in practice is pretty much what I said: "Cut taxes, win votes."

And a fair-weather supply-sider, only Keynesian in the busts, would look an awful lot like G.W. Bush, whose boom-era deficit spending Bartlett criticized in this piece.

[a-new-machine.livejournal.com]

Except he thought that Keynesianism had been brought back from the dead - which implies that he finds it not useful in every situation, and (based on the rest of the paragraph) that he prefers supply-side as the "base" with Keynesianism to rescue the economy only from periods of low aggregate demand.

[anfalicious.livejournal.com]

The problem is without the large surpluses of boom times first paying off debt and then creating a future fund Keynesianism doesn't work.

[a-new-machine.livejournal.com]

I agree, which doesn't exactly make Bartlett a name you want to appeal to when you're talking about the soul of economic reasonableness.

[the-rukh.livejournal.com]

Yeah the guy is cherrypicking economic ideas that worked at specific times to try to boost his own fame, nevermind that he's touting contradictory policies.

[peristaltor.livejournal.com]

I don't know. From the article, he's in the throws of a conversion. Not many wade through Keynes to find out what he actually said. That's significant; Keynes was dense and hard to understand, even for econ profs. Most just read the Hicks/Samuelson synopses (which are dead wrong, according to Keen).

He might be having a David Brock crisis.

[existentme.livejournal.com]

throes (http://dictionary.reference.com/browse/throes?s=t&ld=1120) (jsyk)

[peristaltor.livejournal.com]

Now look up "pedant." It should be in the thesaurus near "pariah."

[existentme.livejournal.com]

I don't need to look it up. For the record, I was being nice. Next time around, you might consider that very real possibility. That is to say, I think about how I would not want to go through life misunderstanding the spelling of a word because I'd never encountered it in a context that demonstrated the fact. I was thinking about how people who might not think as far along as I sometimes do, might read "throws," and think something far worse of the writer than simply, "oh, he or she must not know about this."

I think about how until well into my twenties, I read the word misled as mize-old, knowing its meaning full well because of so many contextual encounters in my reading, but never making the connection between miss-led and mize-old. I simply thought you might appreciate the information, which is all it was. I'm guessing no one thought you an idiot for the misspelling. I'm also guessing there is a possibility someone else may have also learned the correct spelling of the word.

All of this, then, is for the record.

[peristaltor.livejournal.com]

For the record then, let me amend. You are more likely a "long-winded pariah."

Seriously, correct the syntax, grammar and spelling of everyone here and you'll wear out your keyboard in no time. But hey, who am I to be a buzzkill. They're your fingers. Bang on. Your keyboard will likely wear out long after your welcome.

And for the record, this is me being nice.

[anfalicious.livejournal.com]

Woo, I didn't know that!

[existentme.livejournal.com]

Lol, omg, awesome then! I responded to a rather apparently offended one above yours, without first reading your comment, and opined in that rather terse response (http://talk-politics.livejournal.com/1614415.html?thread=129337679#t129337679) that " I'm also guessing there is a possibility someone else may have also learned the correct spelling of the word."

Heh, so yeah, thanks again for saying so.

[peristaltor.livejournal.com]

I actually did know that, but mis-typed. Those two letters are pretty darned close together on my keyboard, at least.

I am merely passing on some of the anti-pedantry I received from those I corrected in the past. Really, toss some corrective pearls before them and you'll see quite soon by comparison how less a swine my response makes me.

Just a heads up.

[existentme.livejournal.com]

I am unworried.

[foolsguinea.livejournal.com]

Also, he says, "I felt," in the past tense. Bartlett is talking about economics in terms of facts and real effects, not opinions and arbitrary preferences, and he seems to be conceding that Keynes was right on the facts.

[badlydrawnjeff.livejournal.com]

I love that all my liberal friends are suddenly flocking to The American Conservative today, as if the paleoconservatives they've derided for years suddenly have something useful for them to say.

I wonder if they realize that Pat Buchanan's behind that publication.

[foolsguinea.livejournal.com]

Pat Buchanan is a racist ass, but he's right about a few things. Heck, even Hitler was right about something or other, once.

If the GOP is determined to get everything it possibly can wrong, we can't all be expected to be as diabolically wrong about everything imaginable as the GOP mainstream, not even dissident splinters of the GOP.

;)

[underlankers.livejournal.com]

Well, since Pat Buchanan, the Nazi blackheart that he is, is held to be a respectable exemplar of conservative intellectualism.....

[underlankers.livejournal.com]

George Bush was right: Supply-Side really is voodoo economics.

[sophia-sadek.livejournal.com]

George Bush, Sr., that is. I will never forget the relief we all felt when he got into office and started to correct some of the mistakes Reagan made. It is too bad he got suckered into military adventures in Panama and Iraq.

Bush, Sr. was from the socially liberal wing of the Party. He had to abandon his position in favor of family planning in order to get his position on the Reagan ticket.

[underlankers.livejournal.com]

How exactly did Saddam invading Kuwait to recoup the debt he'd racked up in the longest war of the 20th Century qualify as suckering GHWB, exactly? Whatever can be said about 2003, 1991 was a pretty clear instance of an attempt to show that the fall of the USSR did not mean anything goes was the new geopolitical rule. That was rather a necessity, and in the event Saddam did rather stupidly rack up a debt he was going to have to pay back sooner or later. Unfortunately for him he moved before he had the nukes. All it would have taken was a year.....but then again it is SoDamn Insane we're talking about here.

[sophia-sadek.livejournal.com]

I do not recall pointing to Hussein as the agent of suckerdom. It has been said that Saddam was suckered by others into thinking that he could take Kuwait without any severe consequences other than an attack by Israel.

[peristaltor.livejournal.com]

That's what I heard as well. Kuwait was whipstock-drilling across the border, tapping Iraqi fields. Saddam supposedly asked GHWB permission to deal with the situation; when the President didn't shut him down, Saddam took that as tacit permission. He went waaay too far.

A more interesting historical question might be why the Iraqi fields were (and continue to be) so under-developed, first by the Brits, then by everyone else including the US.

[the-rukh.livejournal.com]

To me the whole article reads as historical revisionism to paint himself on the right side of history, going back and claiming his association with today's opinions of what worked well and who did dumb things. I see a lot of old-guard conservatives doing that lately, like rats from a sinking ship they're going to embrace whatever policies they think are going to be popular. I think Republicans can smell what Barack is cooking.

[the-rukh.livejournal.com]

p.s.

[peristaltor.livejournal.com]

It read to me like someone first touting their conservative cred, then noting the flaws in reasoning and execution. This could be a genuine conversion.

Time will tell, I guess, especially when he gets around to writing something new.

(NB: In my opinion, his endorsement of Krugman—"no one has been more correct in his analysis and prescriptions for the economy’s problems"—shows that he didn't read his Keynes that closely, and probably should have thrown in more post-1933 Fisher and lots more Minsky.)

[foolsguinea.livejournal.com]

I don't understand this line:

(NB: In my opinion, his endorsement of Krugman—"no one has been more correct in his analysis and prescriptions for the economy’s problems"—shows that he didn't read his Keynes that closely, and probably should have thrown in more post-1933 Fisher and lots more Minsky.)

Isn't the question of the accuracy of Krugman's analysis a matter of Krugman's analysis and its correspondence to empirical data; not conformity to Fisher, Minsky, and Keynes?

[peristaltor.livejournal.com]

Yes. Sadly, Krugman's analysis (according to people like Scott Fullwiler (http://neweconomicperspectives.org/2012/04/krugmans-flashing-neon-sign.html)) has blind spots, specifically when it comes to how banks actually work:

. . .Krugman demonstrates that he has a very good grasp of banking as it is presented in a traditional money and banking textbook. Unfortunately for him, though, there’s virtually nothing in that description of banking that is actually correct. Instead of a persuasive defense of his own views on banking, his post is in essence his own flashing neon sign where he provides undisputable evidence that “I don’t know what I’m talking about.”

This isn't a fatal flaw when it comes to all of Krugman's opinions, by any means. Were he to incorporate a more complete understanding of banking practice, though, his opinions might correspond that much more to empirical data.

[sophia-sadek.livejournal.com]

I especially appreciate his description of conservative bubble brain mindset that shuts out anything that contradicts the idee fix of their ideology. It constitutes ignorance at its most extreme. And they say that the Cave of Ignorance does not really exist. Hah!