Republican Economists Who Aren't Supporting McCain's Economic Plan

Felix Salmon writes:

The Economic Policy of John McCain: The more substantive news, in my view, is the list of 300 economists who claim to "enthusiastically support John McCain's economic plan". Would most of them sign their name to the economic plan of any Republican nominee, no matter how vague it was? Possibly. But there are undoubtedly some very heavy hitters on there, including five Nobel laureates and four former presidents of the American Economic Association. (Gary Becker, for these purposes, counts twice.) An arguments from authority can never be particularly convincing, but in this case it's stronger and more compelling than a promise buried in a position paper. It's one thing to say that McCain has no idea what he's talking about: it's another thing entirely to say that the same thing must go for every economist on the list...

I agree: it is disappointing. But there is good news: a lot of economists who you would expect to have signed on--subcabinet appointees in past Republican administrations, et cetera--have not. One would expect, based on political loyalties and willingness to serve in Republican administrations, to see Greg Mankiw, Paul Wonnacott, Dick Schmalensee, Michael Mussa, Thomas Moore, Gary Seevers, Marina von Neumann Whitman, Kristin J. Forbes, Katherine Baicker, Matthew J. Slaughter, Andrew Samwick, and others on the list. They are not there. That is good news.

Comments

[Barry]

Shorter Brad: 'After the second GOP administration of economic fraud, and after 8 incredibly disasterous years of econowh*redom, there actually exists GOP economists who *won't* sign on to any lies proposed by a GOP candidate.'

[Bloix]

Five Nobel laureates did not sign on. Alfred Nobel did not establish a prize in economics, and therefore there is no such thing as a Nobel laureate in economics. There is a Bank of Sweden Prize, which the Bank of Sweden unilaterally denominated "in memory of Alfred Nobel," and there are Bank of Sweden Prize winners, who are metriciously called Nobel laureates precisely in order to use the Nobel name for propaganda purposes, as has been done here.

[John]

I realize the laureates are smart guys, but who care what Vernon Smith has to say about public finance? Or Buchanan or Becker....and the Nobel committee did Mundell a favor by ignoring his zanier work....

[pgl]

This Republican economist letter was about as silly as the 2004 Republican economist letter. Maybe those who signed in 2004 but did not sign in 2008 recognized that they shouldn't make the same mistake twice.

[Roger Bigod]

I understand several Laureates in Physics are signing a letter supporting cold fusion. And some of the winners in Physiology or Medicine are endorsing intelligent design and crystal power therapy for cancer.

[Robert Waldmann]

I was just reading the list. I was surprised by how weak it was. Several of the economists work for the AEI, for this or that consulting firm or give their affiliation as a private address. Also, since when was Phil Gramm and economist ? Is the John Lott on the list *the* John Lott ? If so how did he get a job at Maryland University ? I knew about Ken Rogoff, so my only surprise was Steve Kaplan (kind of lost touch with him after 1978).

I believe I noticed no Ed Prescott. As far as I could tell, his only policy priority is cutting taxes always, so I was surprised. Also no Robert Hall.

I'd say the striking thing is how many right wing economists aren't on the list. I don't recall the similar list for Bush, but my sense is that most pro-market economists have figured out that the Republican party's claim to be pro-market is a scam.

[John Emerson]

Yeah, I'm delighted. Only six of the Nobel-certified smartest social scientists in the world signed on to an unintelligible, fraudulent, and probably very destructive economic plan. Let joy be unconfined!

[Rob]

Are you serious Robert? Phil Gramm is a PhD Economist whose work actually had some importance. Meaning he's no Dick Armey. That said it was like 25 years ago or so.

[sm]

If there is one thing the last 8 years should have taught us, Is that lots of so-called respectable American authorities will lie for the right consideration.

That's why we are in this mess.

[Roger Bigod]

It's enough to make you wonder if Alfred Nobel would have second thoughts about remembering the field of economics in his will.

[bunbury]

Is there a similar Obama letter and would you sign it?

[Ben V-L]

Roger Bigod: I seriously doubt that "several Laureates in Physics are signing a letter supporting cold fusions." We have one living, thriving crackpot laureate, Brian Josephson, who no doubt supports cold fusion, as well as mental telepathy and who knows what else. I really doubt there is another laureate who would sign anything supporting cold fusion. Care to name any?

Your accusation is sloppy, and obscures an important point: politics and economics are intertwined in a way that politics and physics simply aren't. Two reason I can think of for this are (1) economics matters more to politics, and (2) physics has the luxury of being relatively more objective, so it's does more damage to your reputation to declare up is down in order to fit your political objectives.

[Ben V-L]

Roger Bigod: I seriously doubt that "several Laureates in Physics are signing a letter supporting cold fusions." We have one living, thriving crackpot laureate, Brian Josephson, who no doubt supports cold fusion, as well as mental telepathy and who knows what else. I really doubt there is another laureate who would sign anything supporting cold fusion. Care to name any?

Your accusation is sloppy, and obscures an important point: politics and economics are intertwined in a way that politics and physics simply aren't. Two reason I can think of for this are (1) economics matters more to politics, and (2) physics has the luxury of being relatively more objective, so it's does more damage to your reputation to declare up is down in order to fit your political objectives.

[Robert Waldmann]

Roger Bigod

You comment is "enough to make me wonder [where you heard of] Alfred Nobel ... remembering the field of economics in his will." He didn't. The "Nobel" prize in economics was added later.

Now the status of the Nobel prize is huge, because Nobel committees have been widely perceived to be open minded and fair. This is not necessarily true of every new prize given the name "Nobel". In fact, the prize in economics is fundamentally different from the prizes in the sciences as one doesn't win them without making a surprising prediction which is confirmed. Economists think it is naive to imagine that "theory" consists of hypotheses such that rejection of a hypothesis is big news. Economic theory consists of models which everyone knows are false and whose epistimological standing is not changed when implications are tested and rejected. That is they are a matter of faith or fashion but have nothing to do with social science.

In particular the Economics committee has had an extreme right wing slant and extraordinary deference to the University of Chicago (which granted its then chairman his PhD). Beyond that, the prize in economics is based on standing in the profession, prominence and influence. This is not true of the science prizes. "The Economist" was amazed about 2 aspects of a chemistry prize (for effects of NO). First the winners were not predicted by anyone (they weren't super famous). Second the prize wasn't controversial. This would not be true of a prize in economics.

I repeat, I am surprised that so few Nobel laureates signed on. There are hard core right wing tax hater nobel Laureates who aren't on the list. One, Ed Prescott, went so far as to praise the economic policies of George Bush in an earlier letter.

[Rob]

Another spin:

http://www.politico.com/news/stories/0708/11618.html

[John Emerson]

Kary Mullis is crazy too. Nobelist in Chemistry.

I think that Roger Bigod is being misread. Imagine irony emoticons.

Properly it's the "Bank of Sweden Prize". The name "Nobel" is PR.

[John Emerson]

Robert, Brad:

So the story here is that McCain's economic plan is so bad that **even the average Bank of Sweden Prize winner** won't endorse it? Only six of the very worst?

[John Emerson]

"For that reason, Gary Becker, a Nobel prize-winning economist at the University of Chicago, said he definitely supports the plan, even if he is not completely familiar with its specifics.

'I like the main thrust of the plan,' he said. 'I felt that I could support it without knowing every detail.'"

[bakho]

Read the letter they actually signed: (MY COMMENTS IN CAPS)

"We enthusiastically support John McCain's economic plan. It is a comprehensive, pro-growth, reform agenda. The reform focuses on the real economic problems Americans face today and will face in the future. And it builds on the core economic principles that have made America great.



His plan would control government spending by vetoing every bill with earmarks, (LOL) implementing a constitutionally valid line-item veto (NOT GONNA HAPPEN), pausing non-military discretionary government spending programs for one year to stop their explosive growth (WHAT NON-MILITARY PROGRAM HAS EXPLODING DISCRETIONARY SPENDING???? HS?? PURE FANTASY) and place accountability on federal government agencies.



His plan would keep taxes from rising, because higher tax rates are exactly the wrong policy to restore economic growth, especially at this time.

His plan would reduce tax rates by cutting the tax that corporations pay to 25 percent in line with other countries, by completely phasing out the alternative minimum tax, by increasing the exemption for dependents, by permitting the first-year expensing of new equipment and technology, and by making permanent a reformed tax credit for R&D.
 (HOW MUCH WOULD THAT COST?? AT LEAST SEVERAL HUNDRED BILLION IN REVENUE. ACCORDING TO TAX POLICY CENTER, IT IS CLOSE TO $1 TRILLION:

“AGAINST CURRENT POLICY, SENATOR OBAMA'S PROPOSALS WOULD RAISE $300 BILLION, AN INCREASE OF 2 PERCENT, AND SENATOR MCCAIN'S PROPOSALS LOSE $1.0 TRILLION (IF FULLY PHASED-IN AND PERMANENT), A DECREASE OF ROUGHLY 2 PERCENT. SENATOR MCCAIN HAS STRESSED THAT DEFICITS SHOULD BE CLOSED BY SPENDING CUTS, BUT POLICIES HE IDENTIFIES, SUCH AS LIMITING EARMARKS, WOULD OFFSET ONLY PART OF THE REVENUE LOSSES ATTRIBUTABLE TO HIS TAX PLAN.”
http://www.taxpolicycenter.org/publications/url.cfm?ID=411693

)

His plan would also create a new and much simpler tax system and give Americans a free choice of whether to pay taxes under that simple system or the current complex and burdensome income tax.

(BUT MCCAIN HAS NOT RELEASED THE DETAILS ON THIS. SUPPOSEDLY IT IS REVENUE NEUTRAL, BUT IF IT IS VOLUNTARY, THEN PEOPLE WILL FILE WHICHEVER COMPUTER TAX PROGRAM GIVES THE LOWER NUMBER. SEE:
http://www.nytimes.com/2008/06/18/business/18leonhardt.html?ref=politics

THIS IDEA ALSO GETS CRITICIZED FOR INCREASING THE COMPLEXITY OF AN ALREADY COMPLICATED TAX PROCESS RATHER THAN A TRUE REFORM)

His plan would open new markets for American goods and services and thereby create additional jobs for Americans by supporting good free trade agreements, such as the one with Colombia, and working with leaders around the world to avoid isolationism and protectionism. (MORE BILATERALISM. ARE MULTILATERAL TRADE AGREEMENTS DEAD?) His plan would also reform education, retraining, and other assistance programs so they better help those displaced by trade and other changes in the economy.

His plan addresses problems in the financial markets and housing markets by calling for increased transparency and accountability, by targeted assistance to deserving homeowners to refinance their mortgages, and by opposing so-called reform plans which would raise the costs of home-ownership in the future.


The above actions, as well as plans to address entitlement programs -- especially Social Security, Medicare and other government health care programs -- and his regulatory reforms -- especially in the area of health care -- constitute a broad and powerful economic agenda.

Because of John McCain's experience working with the American people in all walks of life, with members of Congress on both sides of the aisle, and with leaders around the world, we are optimistic that these plans will become a reality and will create jobs and restore confidence and strong economic growth.

(THIS IS NOT A SERIOUS PLAN. IT IS ONLY A ROUGH SKETCH. THEY HAVE SIGNED ON TO A “PIG IN A POKE”.)

[Ben V-L]

Ah, I suspect John Emerson is correct, and so my apologies, Roger. We appear to stand on the same side of the fence.

[stefan]

So it seems we may have evidence that Ed Prescott understands Ricardian Equivalence.

[tedb]

Bakho, So McCain doesn't really, you know, have a plan. IF he did have one, it would be a really marvy one that would do all these cool things and cost less. What's not to like about that? (Thanks for your dissection of the McCain letter.)

Perhaps the left wing (if there was one in the U.S.) should start a whisper campaign about the FACT that economists admired by SOCIALIST Sweden just love the McCain economic plan. :-)

[SvN]

What about free trade?

I think an important factor that may influence many economists to support a "package" of Republican economic policies over a Democratic "package" is McCain's vocal support for free trade. Given the way that trade barriers trend to be used in practice (as opposed to theoretically optimal trade policies), a majority of economists (Nobel and IgNobel) think pro-trade policies tend to be better than anti-trade policies. McCain has been using trade as a wedge issue, and after the Obama-Ohio trade flap, Obama is poorly placed to run as pro-trade.

[ogmb]

"But there is good news: a lot of economists who you would expect to have signed on--subcabinet appointees in past Republican administrations, et cetera--have not."

I don't see how this is particularly good news. More likely the McUnderpants campaign grovel email just sits in their inbox, alongside 4,000 other unopened messages.

At least Berkeley pops up only once (Jerome Siebert -- who??).

To keep this in perspective, the American Economic Association has about 18,000 individual members. So of those who consider themselves economists, at least 17,700 didn't sign on.

[Barry]

Shorter Becker: "I think it adds up, although I don't know the numbers, and the planner is a known liar and fraud".

[kharris]

We should consider an alternative to Brad's good new. After finding 300 names, and not carrying particularly who filled out the final 250 or so, the campaign rushed the letter out. We do not yet know if the list of good-news conservative economists will survive the test of time. We know who did sign, but not who would have signed if asked.

[kharris]

"...not caring..." Carrying? Sorry.

[Roger Bigod]

Thanks to Robert and Ben for filling me in. It was nice of you to take the time. (I've noticed that most people are nicer than me.)

I read somewhere that one of the old, venerable Swedish advertising firms is going to set up a Nobel Prize in Marketing, so this explains it. Except it looks like the Prize in Economics already honors marketing mostly, so perhaps a separate award would be redundant.

[ed_finnerty]

Beyond anything else, how can 300 of anything support a program which relies on a technique (line item veto) which is illegal and will not be used. It is a fundamentally mendacious plan.

Oh well.

[bakho]

The Rude Pundit hits a HR:

"In Brief: John McCain Hates/Hearts Economists:
Okay, follow this. It's got a fun little pay off:

So John McCain proposes a gas tax holiday and economists almost universally say it's a stupid idea. In June, McCain, being a reasonable man, chooses to mock the economists: "If you want to call it a gimmick, fine. You know the economists? They’re the same ones that didn’t predict this housing crisis we’re now in." Ha-ha. Stupid economists. What do they know?

Now McCain has put forth a great and mighty economic plan. Did it yesterday, less than a month after dissing the poindexters. And his campaign has released a letter from, well, who else? Economists who support it. Oodles of them. Guess they know a lot about economics, eh?

Here's the final step: the Rude Pundit chose one of the names at relatively random. University of Chicago's Gary Becker, who does a blog on, you know, economics, with Richard Posner. And here's that promised pay off: back in December 2007, Becker says, "The vast majority of economists, including me, were surprised by the extent of the subprime mortgage crisis."

So, to conclude: for John McCain, economists who didn't predict the mortgage crisis don't know what they're talking about when it comes to a gas tax holiday, but when it comes to his entire economic plan, they're a-ok. What fun.

Does that qualify as straight talk?"

http://rudepundit.blogspot.com/2008/07/in-brief-john-mccain-hateshearts.html

[Michael Cain]

So, how many of the 300 are having second thoughts after the statements of the last couple days that it's a "total disgrace" that younger workers are paying for old former workers' retirement? Whether through a tax-based transfer, or through younger workers' savings to balance retirees' dissavings, retirees' consumption is always paid for by reduced consumption on the part of younger workers. Oops, I just signed up to support a plan whose details deny reality?

[Marcus Sitz]

Berkeley's lone representative on the list is Jerry Siebert, a retired agricultural economist who had a long career in the cooperative agricultural extension service. Berkeley is, as you all should know, one of the oldest elements of this system ("cooperative" with the USDA), and of the Cooperative State (agricultural) Research Service, twin pillers of the land-grant university system.

Jerry specialized in agricultural marketing including in particular marketing boards and orders. Marketing orders are great. They allow the growers and traders of a product to restrict supply, backed by the legal muscle of the U.S. Department of Justice. A wag once described his job working on a grant from the Almond Board of California to the University of California as like "being a consulting economist to the OPEC of nuts."

Jerry specialized in the dairy and poultry industries. The famous "Got Milk" campaign (remember the "Aaron Burr" ad, I think during the great Lillehammer Olympics?) was the creation of the California Milk Processor Board, with whom Jerry worked closely.

It is natural that Jerry would sign on to the Economists for McCain campaign. It is just a matter of time before we see his candidate, forcing out a synthetic chuckle beneath a stiff, but milk-mustachioed, lip.

In other news, the only economist on the list from the University's farm station is a retired mathematical economist. Missing is the libertarian luminary (and chief agricultural economist of the USDA during the term of the elder Bush). I notice the absence as well of Rich Sexton of Ag, Resource and Environmental Economics, from the 2004 list. Apparently Bush the Younger was better than McCain. And no Stephen Sheffrin, current Dean of L&S and a prominent conservative tax economist, who could also find a place in a Republican administration.

Probably there was no room on the list for these and other prominent conservative economists. Their place is held down instead by the likes of Professor Bise of Orange Coast College, which is "one of the nation’s largest -- and finest -- community colleges," something which surely cannot be bragged by the employer of another signatory (just in the first two letters of the alphabet!), Geoffrey T. Andron of Austin Community College.

[donna]

As the politico article points out, they weren't told the plan. They were given a statement that left out parts of the plan, and then their signatures were used as proof they support the full plan.

Typical of Republicans to not disclose their actual plan and then claim support for it.

[kharris]

http://obsidianwings.blogs.com/obsidian_wings/2008/07/mccains-economi.html

This gives some of the details on what the economists knew about the plan and when they knew it. "Little" and "never" probably overstate the case, but not by much.