"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.