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    Is Our Columnists Learning?

    By Michael Maiello on Fri, 04/27/2012 - 3:11pm | Politics

    "Is Our Adults Learning?" asks David Brooks in The New York Times today (the paper where columnists don't appear to be edited much.)  In this column, Brooks talks about the fight between stimulus supporters and austerity supporters.  He concludes that both sides relied on grand theories but that three years and $800 billion later, we are none the wiser as to which policy choice was better:

    "The economists who supported the stimulus now argue the economy would have been worse off without it. Those who opposed it argue that the results have been meager. It’s hard to think of anybody whose mind has been changed by what happened."

    How glib!

    Brooks goes on to discuss how businesses use thousands upon thousands of randomized trials to come up with great, profitable ideas and to shake themselves free of old orthodoxies.  I happen to think that this is a wonderful thing.  Yay, science!

    Science is where you test a hypothesis against available evidence and come to some sort of conclusion, provided everybody honestly examines the evidence.  This conclusion is not a forever conclusion, naturally.  New evidence or new ways of looking at evidence might undermine it.  But, so long as everybody honestly evaluates and gathers the evidence, we can muddle through.

    The problem with the whole stimulus argument is that there's just no evidence to decide the matter one way or another.  It's just Paul Krugman and Larry Kudlow yelling.  It's all noise.  There is no evidence!

    The U.S. tried a stimulus package and emerged, slowly, from its recession.

    China had a larger stimulus (as a percentage of GDP) and weathered the entire global financial crisis in expansionary mode.

    Iceland refused to implement austerity measures and defaulted on its debts and still emerged, shakily, from its recession.

    Spain tried austerity. Its unemployment rate is now near 25% and it has not emerged from recession.

    Italy tried austerity. It has not emerged from its recession.

    Greece tried austerity and got a debt write down, has not emerged from its recession and will still owe more than 100% of its GDP in debt in 20 years.

    The UK tried austerity, emerged from its recession and then double dipped.

    Randomized trials are well and good, but not all experiments have to be complex.  "Staring at the sun can hurt the eyes," is a testable hypothesis.  Just like stimulus versus austerity during a time of recession.

    Brooks writes:

    "Nearly 80 years later, it’s hard to know if the New Deal did much to end the Great Depression."

    That sure is hard to know.  If you don't happen to like the answer.

    Topics: 
    Politics

    Comments

    As someone trained in the "hard" sciences, part of me is sympathetic to Brooks' argument. However, I'm also familiar with the concept of "natural experiments" that you lay out so well here. As you and Brooks point out, one can't run a double-blind study using a placebo group as a control. However, one can infer some causality when looking across a variety of situations. By necessity this inference is less certain, and as Brooks suggests is more open to interpretation and bias. However, if one wants to argue the opposite point, one should show one's supporting evidence. Incidentally, this is also why meta-analysis can be so helpful, when done correctly.


    by Verified Atheist on Fri, 04/27/2012 - 3:33pm

    I am always fascinated by this argument as presented by 'conservatives'.

    By about 1940 with 'Lend Lease' the government began to take over the means of production in this country.

    GM you are not going to make cars anymore (how many American Cars were manufactured between 1941 and 1946?)

    Ford, we want tanks.

    Chrysler, hell we love them jeeps.

    IBM and you other capitalists out there, you no longer own anything in NAZI occupied Europe and you are going to contribute to the war effort! today.

    The way they kept statistics, our government was spending more than the entire capitalist mechanisms in this country were taking in--GDP.

    We had 100% employment all of a sudden!

    We had strict rules as far as wages and the amount of salaries the oligarchy could pay themselves.

    We also did bad things, evil things. We 'rounded up' Asians as well as some Germans!

    And what was the result of this socialist/military take-over?

    WE ROCKED!

    Domestically you forced the American Peon to have coupons in addition to money in order to purchase beef or oil or any other commodity!

    We were a socialist nation aligned with the USSR! hahahahaahah

    F*&k this capitalistic crap we are forced to eat via the media in this country.

    This socialist system saved us, saved Europe and saved the gd world.

    the end


    by Richard Day on Fri, 04/27/2012 - 5:47pm