Kling on Macro
See here .
Here's his summation at the end and it's really, really good:
We badly want macroeconometrics to work. If it did, we could resolve bitter theoretical disputes with evidence. We could achieve better forecasting and control of the economy. Unfortunately, the world is not set up to enable macroeconometrics to work. Instead, all macroeconometric models are basically simulation models that use data for calibration purposes. People judge these models based on their priors for how the economy works. Imposing priors related to rational expectations does not change the fact that macroeconometrics provides no empirical information to anyone except those who happen to share all of the priors of the model-builder.
I used to read Kling sparingly. Over the last year, I've read him more and more. He's quite impressive and a great source of information during this crisis. He worked for a GSE and knows macro inside out, upside down and backward and forward. That makes his critiques all the more worth reading. That's not to say that other libertarian economists don't of a PhD level grasp of Macro. They do. But Kling just seems to communicate his points on a level I've never seen in others.
I think that summary above really sheds a lot of light on a lot of the confusion and talking past one another on the matter of economics being a science and a tool for prediction. Kling has this all down pat as well as is at all possible.
He strikes me as unique in today's economic debates in that he shows a high level of mastery of intricacies of both sides of the argument.
The complementary gem would be a liberal Keynesian economist with equal expertise and knowledge of opposing arguments.
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Comments :
I think this is the key issue
I think this is the key issue with calling it a science:
But the real question is wether or not that means it can never be useful.
Also, I seem to remember something about affecting timelines from watching Back to the Future and reading Timeline. But that's another story...
Assuming
that we really don't know anything about macroeconomics other than some very basic principles (100% tax rate is bad), then doing nothing might help, and it might not. Doing anything might help, and it might not.
To a politician that looks like 50/50 odds. And I can't tell you that those are great odds for them, especially when they can blame the failure on their kinsmen on the other side of the aisle.
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
there is always overhead costs/risks
Any form of action involves some cost -- so if there is no reason to think that the action itself will help, then it is best not to act.
Similarly, every form of power has risk of corruption. So if there is no reason to believe that power will be used wisely, it should not be granted.
In my expert opinion, you should do what I tell you to do.
That's the glass half full
That's the glass half full way to look at it. I'd also be willing to call it naive. The glass half empty perspective would say that if there is any reason to believe the power could be used unwisely then it should not be granted. This goes back to the hyporcritical level of concern that Democrats expressed during the Bush Administration. They didn't really care about executive power, they just prefer it to be their party's power rather than the Republicans. The same is true in reverse. I feel the same way about the stimulus by which I will soon be stimulated.
I don't believe that is true.
At least not true of the everyday citizen Democrats. I'm not going to defend actual Democratic politicians, because I have no idea what actually goes on in their minds. If that is what you meant, than it's an opinion that I won't begrudge you. But if you meant Democrats in general, than no. I do believe that most of them are unhappy with the idea of any president of any party having the power to, say, imprison any citiizen he or she wishes, indefinitely and without bringing charges or presenting evidence. I myself don't believe any Democratic politician would be comfortable with that idea, either, but if you want to believe differently, that's your prerogative.
We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki
Some guy on Kling
Obama is ransacking his house
.
Kling is taking the Democrats to task for so much deficit spending. However, he not only excused Bush's deficit spending, he encouraged it.
Via Sullivan
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
Did he?
where?
Last link on the blog
The other blog. Not Sullivan's.
Here
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
Not really.
You are filling in a lot that isn't there. I read the link.
I especially love this quote
Epic LULZ.
I never broke the law; I am the law! --
George W. BushJudge DreddI'm listening to...
That is funny. -nt.
-
I came. I saw. I posted.
Veni, Vidi, Bitchy.
he isn't complaining about deficit spending
Where did Kling complain about deficit spending? From what I read, he was complaining that the stimulus was not stimulative:
In the article from 2000, he called for Federal revenue sharing with the states -- an item that the Republicans forced out of the "stimulus" bill (IIRC).
In my expert opinion, you should do what I tell you to do.
Greg Mankiw's plan
I could get behind that plan, I believe. I might prefer a more general carbon tax to a gasoline tax, but I wouldn't filibuster if it had to be a gas tax. :)
We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki
And which arbitrary metric
And which arbitrary metric would you like to use to determine the carbon output level of various activities? I'll admit I'm super excited to find out.
In my opinion
any arbitrary metric would be an improvement over the status quo. If it turns out to be too high, I think that would become obvious soon enough, and it could be lowered. I think it is obvious now that zero taxes on carbon emissions is too low.
We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki
It's not obvious to me. You'll have to enlighten me.
n/t
This is why I wouldn't filibuster.
Like I said, I'd be OK with it if it was merely a gasoline tax, which can be justified for a few reasons. A carbon tax justification requires accepting that the vast majority of experts in a particular field actually know what they are talking about, and aren't perpetrating a conspiratorial fraud on the world for some reason of their own. If you can't accept that, then I can't convince you of the need for a carbon tax.
We are the environment. There is no distinction. What we do to the earth we do to ourselves. —David Suzuki
As long as you are able to
As long as you are able to recognize the moral hazard in legislating the lives of millions of people based on your own imprefect knowledge I think there may be hope left for the left. I'm not so hopeful for the right. It's a big reason that the libertarian blogosphere has had many discussions about how the Democratic party may be the libertarian party of the future. Of course by future I mean well after Obama and the rest of the Democrats in power are out since they've pretty much ruined that possibility.
"some guy" is a fool and a jerk
Those people criticizing Kling are reading way too much into his words. First, they are obscenely over-simplifying (as if Kling's core concern was the size of the deficit). Second, they acting as though he was defending the Republicans, when he didn't even mention them. Even worse, they ignore that Kling's accusation against "the Obama Administration" involves the interpretation of the Heritage foundation editor.
In my expert opinion, you should do what I tell you to do.
"some guy" suffers from projection
he looks for the worst of himself in others...even though it isn't there.
It will never cease to amaze me (and disgust me) how belligerent partisan ideologues and hacks see these traits and motives in anything they don't agree with.
Legos vs. Play Dough
This article by Sheldon Richman
, while directly related to Kling's piece, adds to the Keynesian Macro vs. Austrian Micro discussion and sheds light on the Capital Structure 
that many in the macro business shy away from.
And we aren't just talking about Legos. No, these are also living legos that change shape. Really messy stuff when trying to draw conclusions generic macro data.