Jonah Gelbach on McCain's "Economist" "Supporters"

Jonath makes the mistake of taking the McCain "economists" letter as an analytical statement, rather than as an expression of attitude written by spinmasters, and demands intellectual consistency:

Economists for Obama: McCain's Economist Supporters vs. Facts: Over at MarginalRevolution, Tyler Cowen has posted the text of an email... prominent, right-leaning economists [who] have endorsed John McCain's stated economic proposals... the usuals (e.g., Becker, Hassett, McCain chief economic adviser Doug Holtz-Eakin, Taylor, Harvey Rosen, Meltzer, etc.)... [NS] prominent economists who have earned their academic reputations.... I've previously discussed the enormous increase in deficits that would be caused by McCain's tax proposals, as scored by Len Burman and Greg Leiserson of the Tax Policy Center. So let me focus on the second paragraph [of the letter], which is uniformly contradicted by both facts and experience:

"His plan would control government spending by vetoing every bill with earmarks." Well, this one has already been repudiated by... John McCain's chief economic adviser, Doug Holtz-Eakin. I've already posted on this issue:

McCain has already had to change his "definition" of those nasty earmarks he'll eliminate (somehow, without a line-item veto). According to this story by the Politico's Ben Smith, Holtz-Eakin initially claimed that there were $100 billion in earmarks in the current budget, the idea presumably being that eliminating all of these earmarks would give McCain $100 billion to work with in paying for his tax cuts. After a former senior Democratic staffer, Scott Lilly, pointed out that many of these earmarks included stuff McCain supports, like money for Israel, Egypt and U.S. military construction, Holtz-Eakin stated that in fact the real amount of money associated with earmarks McCain would not fund (again, magically preventing them without a line-item veto) was only $16-18 billion.

"[I]mplementing a constitutionally valid line-item veto..." Clearly, this one is there to allow them to respond to criticisms, like the parenthetical reference in my earlier post, based on the fact that under current law, the President has no capacity to pick and choose which items to fund. President McCain will have to sign or veto actual statutes, not their components.... I am not a constitutional lawyer, but given my understanding of the Court's language in Justice Stevens's opinion for the Court, I find it very difficult to imagine that McCain and his lawyers (much less his economists) will be capable of "implementing a constitutionally valid line-item veto".

"[P]ausing non-military discretionary government spending programs for one year to stop their explosive growth..." Gee, I hardly know where to begin on this one. First off, a one-year pause would do nothing to stop "explosive growth". It would reduce the level of spending, to be sure, but then that "explosive growth" would go right on happening. This is a mathematical principle of which each of the economist-letter's signatories no doubt is aware.

That said, this post over at CBPP is worth a look [Update: I see that Mark Thoma posted much of the CBPP post, which I should have noted was written by Richard Kogan, back in March]. It shows the following:

Domestic discretionary spending fell from 18.4% of all non-interest federal spending in 2001 to (an estimated) 14.7% in 2008. By comparison, defense and security spending (in which the CBPP includes DHS and Veterans' spending) rose from 21.7% to 29.2%.

The real, i.e., inflation-adjusted, growth rate of domestic discretionary spending over this period was 1.3%. That's hardly an "explosive growth" path; by comparison, defense/security increased 9.1%, while SS/Medicare/Medicaid increased 3.8%.

As a share of GDP, domestic discretionary spending actually fell, from 3.1% to 2.8%. That means that this category of spending has been becoming less, not more, burdensome. Defense/security rose from 3.6% to 5.6% of GDP over this period, while SS/M/M rose from 7.7% to 8.4%.

I am frankly baffled as to what my colleagues on the right are talking about when they discuss "explosive growth" in "nonmilitary discretionary government spending". The real money on the spending side is in the military and entitlement categories....

[I]t is difficult for me to believe that people who promote John McCain's economic policies on the basis of the second paragraph of the letter above can simultaneously be aware of the facts and providing honest assessments. Perhaps I am wrong. I hope so.

I think that the disconnection of the letter from fiscal and economic reality is, from the point of view of the signatories, a feature and not a bug--because the McCain platform is so far out in the Gamma Quadrant, nobody will think that this is what the economists actually believe, and they will not have to spend any time defending it.

Comments

[jerry]

How many of these folks have tenure? How would the insights they express with regard to McCanesian Economics be graded in basic econ courses? How does this School of McCanesian Economy compare to John Yoo's understanding of law?

I honestly don't know. Is the incompetence cited here worse or less worse than Yoo's leaving out Youngstown?

How does this relate to the cost and benefits of regarding academic freedom as a right?

[Robert Waldmann]

I don't think that it is inevitable that they won't have to spend any time defending it. It is a published document over their signatures. If, when one of these economists presents a seminar someone asks them how they can reconcile their seminar with their view ... and quotes from the letter, they can be taught that lying about economics is not acceptable in the economics profession.

Now most professional economists would never violate guild rules by requiring economists to answer in an academic setting for their shilling for politicians.

If not you who ? If not at the next seminar at Berkeley by any of the signatories when ?

[Eli Rabett]

Actually it is VITAL to press them on this, so maybe next time they won't

[howard]

they signed it. i think this is what they believe. as i noted in the previous thread, and as robert waldmann also alludes to, guild membership is unacceptable in this case, prof: supposed adult, professional economists have committed to this letter. why should we ever take any of them seriously ever again? why should we possibly indulge them in the idea that this is simply their way of saying "i tend to vote republican, and i will this time?"

i'll repeat myself: economists who sup with john mccain in this way have sold their birthright for a mess of potage. there is no defense for this behavior, and the only appropriate reaction is shunning them, intellectually.

[liberal]

Yeah, they'll have to defend it just like Feldstein has to constantly defend his claim that the Clinton 1993 tax hikes would cause a recession.

Not.

[save_the_rustbelt]

Academic economists do not seem to understand that academic economics, politics and governing are all different beasts.

[Matt]

I am starting to like earmarks after being conflicted by them.

Without discretionary spending, the government is unable to make small differential moves toward equilibrium. My complaint about earmarks centered around them being institutionalized.

When government is on a fixed path of mainly future promises with 16 year updates then long term interest rates, in phase and magnitude, would be fixed. That would be and is disaster.

[John Emerson]

"Perhaps I am wrong. I hope so."

Nah, you're right. And obviously the problem isn't that they're not informed. They're just partisan hacks with PhDs (and in six cases, Nobel Prizes, so called).

Over the last few years I've been trying to figure out what to think of economics. Starting from pure Luddism, I was forced to grudgingly admit that there was something there, though the scientific claims are exaggerated and the math is often used to mystify). (The considerable areas where the science remains imperfect, so that there can be multiple competent opinions on a topic and whole competing schools even within orthodoxy, does not remind one much of the state of affairs in physics, chemistry, mathematics, or biology.)

My conclusion has been that the problem with economics is that applied economics and theoretical economics have never been disentangled, so that normative and political biases can be hidden in the theory and presented as science.

There's a two-step here, because in certain academic venues, where criticism might be expected, economists can be commendably modest, self-critical, and frank about the arbitrary limitations of their science. But when giving policy advice, the modesty disappears, and they crow about how much smarter and more scientific they are than everyone else. (Not surprisingly, the equivocation about the status of the science manifests itself in real conflicts of interest, for economics is by far the most influential and most lucrative of the social sciences. The most strenuous claims to pure science are made by the most implicated, most impure, and most self-serving of the sciences.)

So what I think now is that economists are extremely smart mercenaries and ideologues whose weapons are indeed fearsome. I wish they were on my side, but they have their own fish to fry. But in no way to I minimize the power of their ideas.

(A more temperate statement is at the URL).

[Shirley]

Obama rooting for you! http://www.obamarocks08.com

[Bernard Yomtov]

" nobody will think that this is what the economists actually believe, and they will not have to spend any time defending it."

I think it is what they actually believe. They signed and published it after all.

Why should they not be called on it? Hasn't there been considerable criticism directed at what amounts to excessive professional courtesy shown to Yoo?

[Tracy Lightcap]

Gelbach's right about the "line-item veto". Clinton v CNY made it clear as crystal that nothing short of a constitutional amendment would get around the Presentments Clause. Goooood luck on that one.

But, of course, Clinton was a Democrat ...