"The moral I’ve taken from recent years isn’t Be Humble -- it’s Question Authority" (Paul Krugman)

"You just have to wonder how it’s possible to have lived through the last ten years and still imagine that because a lot of Serious People believe something, you should believe it too. Iraq? Housing bubble? Inflation?"

-- Paul Krugman, in a NYT blogpost this morning,

"Arguments from Authority"

by Ken

First a bit of background. Today David Brooks dropped what is, even for him, a superturd of a column, "A Little Economic Realism," purporting to refute the notion of the "many economists" who "say we need another stimulus bill." The title strikes me as especially unfortunate, given our David's woeful track record. Is there any documented instance of him even accidentally stumbling into even the remotest and least significant precinct of reality? Which didn't stop him from, at least in his own mind, pulling the rug out from under what he calls "Demand Side theorists."

The economists with working brains, not to be confused with the Fraternal Order of Economic Jackasses Who Win Nobel Prizes for Ritually Regurgitating the Same Discredited Nonsense and Their Like-Minded Jackasses (FOEJWWNPRRSDNTLMJ), pounced.

Dean Baker demolished the column on the Center for Economic and Policy Research website:

The Arrogant David Brooks Tells Readers That Stimulus Will Risk National Insolvency

Tuesday, 06 July 2010 03:27

David Brooks has decided to jump into the debate over stimulus with both feet. In a column in which he warns against arrogance he tells readers that additional stimulus would: "risk national insolvency on the basis of a model."

Mr. Brooks doesn't tell readers how he has determined that further stimulus carries this risk. He doesn't explain how raising the country's debt to GDP ratio by 4-8 percentage points over the next few few years would jeopardize the creditworthiness of the U.S. government. This is certainly a rather strong assertion, given that even with this additional indebtedness, the debt to GDP ratio in the United States would still be far lower than it had been at prior points in its history.

Even after a decade of accumulating debt at a rapid pace, the U.S. would still face a lower debt burden than countries like Italy do today. Italy is currently able to borrow in financial markets at very low interest rates. Projections for 2020 show that the debt burden of the United States would still be less than half of the current debt burden of Japan, which still pays less than 2.0 percent interest on its long-term debt.

Financial markets also don't seem to share Mr. Brooks view that national insolvency is a serious concern. The people who are putting their money on the line are willing to buy 10-year Treasury bonds at just 3.0 percent interest rates. That would seem to suggest that insolvency in not a real concern, but Mr. Brooks insists that President Obama should hesitate on stimulus because he thinks that insolvency is a problem anyhow, and the people who disagree with him are arrogant. . . .

And so on. I don't mean to diminish Dean's post, even though, since our David is an unqualified nincompoop on the subject of economics (which is not to say that he's more adept on any other subject, but at the moment we're talking about economics), it's not difficult for Dean to dismantle this drivel. It is, nevertheless, important that the dismantling be done, promptly and effectively, because economic nincompoopery of this sort is eagerly and widely disseminated by the economic illiterates of the Infotainment News media and the water-carriers for the corporate-crony elites.

Paul Krugman jumped into the fray too, with the above-cited blogpost. I don't know how politically delicate this is, one NYT columnist scrapping blogolistically with another. (Wanna bet that our David didn't scream bloody murder to their mutual editors?) But then, Paul K's NYT blog is becoming the place where he most readily unloads what's on his mind.

He registers a quick note on the substance, such as it is, of the Brooks column:

A quick note on David Brooks’s column today. I have no idea what he’s talking about when he says,

The Demand Siders don’t have a good explanation for the past two years

Funny, I thought we had a perfectly good explanation: severe downturn in demand from the financial crisis, and a stimulus which we warned from the beginning wasn’t nearly big enough. And as I’ve been trying to point out, events have strongly confirmed a demand-side view of the world.

But that turns out not to be what set him a-blogging at that particular moment.

[T]here’s something else in David’s column, which I see a lot: the argument that because a lot of important people believe something, it must make sense:

Moreover, the Demand Siders write as if everybody who disagrees with them is immoral or a moron. But, in fact, many prize-festooned economists do not support another stimulus. Most European leaders and central bankers think it’s time to begin reducing debt, not increasing it — as do many economists at the international economic institutions. Are you sure your theorists are right and theirs are wrong?

Yes, I am. It’s called looking at the evidence. I’ve looked hard at the arguments the Pain Caucus is making, the evidence that supposedly supports their case — and there’s no there there.

And you just have to wonder how it’s possible to have lived through the last ten years and still imagine that because a lot of Serious People believe something, you should believe it too. Iraq? Housing bubble? Inflation? (It’s worth remembering that Trichet actually raised rates in June 2008, because he believed that inflation — not the financial crisis — was the big threat facing Europe.)

The moral I’ve taken from recent years isn’t Be Humble — it’s Question Authority. And you should too.

#