Monday, June 14, 2010

Do Economists Change Their Tune on Budget Deficits?

The Subject: When the White House Changes Party, Do Economists Change Their Tune on Budget Deficits?

Econ Journal Watch 7(2), p 119-156, May 2010
http://econjwatch.org/articles/when-the-white-house-changes-party-do-economists-change-their-tune-on-budget-deficits
This paper investigates selected economists, to see whether their tune changes when the party holding the White House changes. Six economists are found to change their tune—Paul Krugman in a significant way, Alan Blinder in a moderate way, and Martin Feldstein, Murray Weidenbaum, Paul Samuelson, and Robert Solow in a minor way—while eleven are found to be fairly consistent.
The good news is that 11 economists were consistent in their theories and writings. Of course, situations change and economics is not a science -- no matter what practitioners claim. Economics is a historically grounded art of sorts, a matter of interpretations and hypotheses. Still, consistency appeals to me.

I also don't mind the four economists noted for shifting views "in a minor way" as situations evolve. Minor corrections make sense. The world is more complex than Smith, Keynes, or Marx could have predicted. I don't think any past theories hold absolute truths; modern economics also have evolved quickly in the last century.

Krugman studied free trade long ago, which is the research that earned the Nobel. Now, he's increasingly political, a liberal activist who has sacrificed consistency in the name of partisan arguments. Too often, he has selectively chosen historical data and events to argue his views. He can generally be counted on to support whatever "progressive" stance is dominant at the moment.

I used to love reading Krugman. He was a valuable counter to the economic recklessness of past White House administrations and Congresses. Like many commentators, he is best when his party is out of power. The role of loyal opposition seems to breed more consistency in debate.

Keynes never called for ongoing, persistent deficit spending. But, even his calls for government to be the consumer of last resort now seem problematic. Krugman could help revive Keynesian economics for new realities. Instead, he seems focused on defending politicians instead of ideas.

No comments:

Post a Comment