Oderint dum Metuant

Paul Krugman gets it wrong, I think:

Gas tax hysterics - Paul Krugman - Op-Ed Columnist - New York Times Blog: OK, this has gone overboard. Hillary Clinton’s proposed gas tax holiday is not, in my view, a good idea. But the furor over what is, when all is said and done, a small and temporary policy proposal is entirely disproportionate. What’s going on?

Part of it, clearly, is the fact that many people in the media really, really want Obama to win and Clinton to lose — read Kurt Andersen — and have seized on the gas tax as their latest proof that she is ee-ee-vil. But there’s also something going on with economists, a phenomenon I recognize wearing my other hat: the tendency to place excessive weight on issues where professional judgment differs from lay opinion.... [E]conomists then become like the little boy with a hammer, to whom everything looks like a nail. Because protectionism is an issue on which they believe they have some special insight, they inflate its importance, and make free trade versus protectionism THE crucial issue in economic policy — which it isn’t. Trade barriers are a minor issue.... Yet economists talk much more about trade than they do about health care policy, because they think they know something about it in a way the laity don’t.

The gas tax holiday is in this category.... There’s a lot of troubling stuff in both Democrats’ proposals. Mandates aside, Obama is seriously low-balling the cost of health care reform, and promising way too much in middle-class tax cuts. Clinton’s numbers don’t quite add up either, though she’s probably closer to the mark — and both Dems are towering figures of responsibility compared with McCain. Amid all this, the gas tax holiday is a real issue, but a small one; don’t let economist’s tendency to overemphasize their areas of expertise distort your view.

Two points...

First, there's not a lot of troubling stuff in both Democrats' proposals. There's a little troubling stuff in both Democrats' proposals. All in all, they are quite good--economists these days sit around their department lounge and feel pity for John McCain's guy Doug Holtz-Eakin; they don't feel pity for Austan Goolsbee or Laura Tyson.

Second, it is important that presidential candidates fear economists even in the campaign. If they don't fear their economists, then we get campaign promises of really lousy economic policy, some of which will then make it into post-election real policy, and then we are in trouble. Republican politicians have not feared their economists since... the Eisenhower administration, I think, and so Republican economic policy is overwhelmingly lousy. Democratic politicians have in the past and still today fear the bad headlines that are generated if their own economic advisers say that they are full of it. And so their campaign rhetoric is less out-to-lunch. And their post-election policies are better.

For Paul to take steps to diminish Democratic politicians' fear of economists... Well, it's contrary to guild rules. Just saying...

Comments

[Colin Danby]

"don’t let economist’s tendency to overemphasize their areas of expertise distort your view"

Well, sure, this is just another example of Krugman's well-known humility.

[Barry]

"All in all, they are quite good--economists these days sit around their department lounge and feel pity for John McCain's guy Doug Holtz-Eakin; they don't feel pity for Austan Goolsbee or Laura Tyson."

One important lesson from the Bush administration is that people like Doug Holtz-Eakin should not be pitied, but scorned. He's clearly sold his soul, under the expectation that the economics professoriate won't mind a few years of lies and an administration or two of really, really bad economic policy.

[Barry]

"Because protectionism is an issue on which they believe they have some special insight, they inflate its importance, and make free trade versus protectionism THE crucial issue in economic policy — which it isn’t. Trade barriers are a minor issue.... Yet economists talk much more about trade than they do about health care policy, because they think they know something about it in a way the laity don’t."

Or perhaps - because good health carfe policy would really help the majority of American people, whereas trade 'reform' doesn't.

[BillCross]

We get lousy economic policy when we listen to most economists that are "mainstream" enough to get involved with a presidential campaign, so we are pretty much screwed regardless

[kew]

"...many people in the media really, really want Obama to win..."

And at least one economist/columnist really, really wants Clinton to win.

[kew]

"...many people in the media really, really want Obama to win..."

And at least one economist/columnist really, really wants Clinton to win.

[bigTom]

"...many people in the media really, really want Obama to win..." I found this rather at odds with my perception of things, considering the huge attention given to Wright-gate, and to bitter-gate.

[M. Carey]

The gas tax is an “issue” – not a real thing. It is similar to the branch that the chimp waves around, or the rock that he pounds on during dominance displays. It is in fact “Full of sound and fury, signifying nothing”. It is a symbolic branch that each side can wave around to attract attention. That is why each side has embraced is so readily- it is a (nearly) content-free signifier.

[Domino]

So one party is God Fearing and the other party is Economist Fearing?

Hmm...

[PQuincy]

I'm willing to concede Krugman's point that the proposed gas-tax holiday is not, in itself, a matter of great import. This is not least because, for this summer at least, none of the candidates has any ability to bring about such a holiday, beyond wielding one vote in the Senate. In that sense, Krugman's right that it's a manufactured issue.

Yet, what gave this dispute legs, I think (in part, no doubt, owing to clever pushing by the Obama campaign) was Senator Clinton's extraordinary and repeated statements about how she gave no credit to economists' views about economic questions. I was quite astonished by how far the Senator was willing to go in this direction, first dismissing all economists' judgment, and then making the weird statement that 'elites' (whomever she meant by that) routinely and normally want the worst for the 'American people'.

Aside from the frequently noted hypocrisy of this latter statement, Senator Clinton has been justly excoriated for the former. On what basis does she assert that the professional judgment of almost all economists should be ignored? This isn't a case of resisting economists' judgments about, say, legal questions or problems of policy ethics. On such matters, economists have no special standing (though some claim they do), and Senator Clinton is entirely entitled to say that she gives their views no special credence. But the issue here was a narrowly economic one: would a suspension of the Federal gasoline tax lead to benefits to individual drivers sufficient to counterbalance the evident negative effects (decline in highway maintenance funding, possible modest increases in gasoline consumption, slightly reduced incentives to develop alternative fuel sources.) These are straightforward questions of the kinds that economics has developed the best available (though by no means infallible) tools to analyze, and those tools, in the nearly unanimous voice of a notably contentious professional community, told us that Senator Clinton's plan was foolish, simply in economic terms.

No need to get into its political impossibility, or the peculiarities of her proposed 'windfall tax' on the oil companies to recover the lost revenue (which would, it seems obvious, simply be added on to the price of gasoline, thus obviating any decrease brought about by any suspension of the per-gallon tax). No, in simply market terms, the proposals that Senators McCain and Clinton brought forth were hogwash, and when confronted with that learned judgment, the Clinton campaign resolutely denied reality.

That was the issue, and Krugman is still ducking it.

[piotr]

I am a real fan of Krugman, and, unlike some, I appreciate his intentions.

Yet, when someone claims that 2+2 = 4.001, and then decries elitist mathematicians who ridicule that claim, and to make it more silly, majority still thinks that 2+2 = 4, it is kind of hard to defend it. I actually like the previous Krugman's defence of the junior Senator from New York: "her proposal is meaningless rather than evil". If I were Obama, I would paste it on TV screens ("... and this is the friendliest honest opinion about gas tax proposal: ...").

My serious worry is that the combination of global warming and peak oil is a challenge of staggering proportion, and part of our response, alcohol as fuel (combined with bio-diesel), is just transforming energy crisis into food crisis. I am not sanguine that either candidate would provide a satisfactory policy. Thus it is of huge importance to decrease public levels of idiocy on that issue. We just wasted a trillion on war of terror, a trillion on bad real estate investments, and we have no resources to do something actually useful.

PS. Is it just me: it is damn hard to fill correctly those blurred letters and digits, with almost identical pairs like n/h, a/b, v/y etc., plus background that hardly differs from the foreground. More humane captchas give twisted shapes with good contrast, and these are easy to read by humans.

[sfguy]

Brad takes an economist's view on why Krugman gets it wrong. I think Krugman gets it wrong for another reason. Clinton's denigration of economists was a diversionary tactic to focus attention away from the fact that what the economists were really saying was that it wouldn't save anyone any money. Instead of debating that issue, she could debate whether following economists opinions was elitist or not. She hoped that would resonate against an issue she calculated she probably couldn't win.

On the other hand, I think Krugman does get at an important point. Getting the economics right is like getting the science right. Compare global warming. Understanding the science of global warming still doesn't tell us what the correct solution the problem is, that will involve value decisions beyond sciences purview. Analogously, for complicated policy decisions, economics is similarly limited.

[KenS]

When Bush was campaigning in 2000, and it was clear that his promises about taxes and spending and balanced budgets didn't add up, he derided these complaints as "fuzzy math." And Krugman, quite rightly, went ballistic. The use of anti-intellectualism as a defense of poor policy is one of the worst pathologies in American politics. When I heard Clinton denigrating expert opinion on the gas tax, to my ears, it was "fuzzy math" all over again.

[anne]

http://krugman.blogs.nytimes.com/2008/05/07/talleyrand-and-the-gas-tax-holiday/

May 7, 2008

Talleyrand and the Gas Tax Holiday
By Paul Krugman

I'm on record as saying that Hillary Clinton's advocacy of a gas-tax holiday, while it wasn't good policy, didn't rise to the level of a crime.

Judging from last night's results, however, it was worse than a crime: it was a mistake.

[Marc]

Climate change is quite likely to be the single biggest challenge that our generation will face, with a likelihood of catastrophe if we choose inaction. Clinton's actions on a related matter tell us a great deal about her instincts in this area. And her know-nothing contempt for expert opinion is uncomfortably close to Bush.

[PJ]

"Because protectionism is an issue on which they believe they have some special insight, they inflate its importance, and make free trade versus protectionism THE crucial issue in economic policy — which it isn’t. Trade barriers are a minor issue.... "

Right now Myanmar's government is dragging its feet on 'importing' aid workers and many people will die needlessly because of it.

No, international trade is never a 'minor' issue...

[Chris Brown]

So Krugman is saying the gas tax holiday is a bad idea, but since it's been proposed by the candidate he so embarrassingly enamored with, beyond all sense of reason, he won't get excited about it. At least he retains a level of self respect to admit the holiday is a silly idea.

Krugman recently demanded an apology from some pundit who identified Krguman as a Clinton supporter, when the guy has descended this campaign season to depths of shrill shillness plumbed only by the likes of Taylor Marsh and Larry Johnson, both of whom have had the good sense to shut up for the last month or so.

Another reason to hope Clinton pulls out. S

[Bernard Yomtov]

"economists these days sit around their department lounge and feel pity for John McCain's guy Doug Holtz-Eakin;"

Why pity rather than contempt?

It's easy to be offended by "I don't listen to economists" rhetoric, but isn't part of the reason that plays the willingness of some economists to endorse idiotic policy?

I support your criticisms of John Yoo. But on a lower level, do economists have an ethical obligation to avoid supporting patently foolish ideas? Does the profession have an ethical standard that demands that members not endorse obviously wrong policy arguments?