Ezra Klein "This isn't the economic research you have been looking for" department:
Economists to Romney campaign: That’s not what our research says: On Tuesday, the Romney campaign responded to the fire it’s taking from economic analysts by unleashing some artillery of their own. They released a paper by four decorated economists associated with the campaign — Glenn Hubbard, Greg Mankiw, John Taylor, and Kevin Hassett…. I contacted some of the named economists to ask what they thought of the Romney campaign’s interpretation of their research. In every case, they responded with a polite version of Marshall McLuhan’s famous riposte. The Romney campaign, they said, knows little of their work. Or of their policy proposals.
“The historical record is clear,” write the Romney campaign’s economists. “Our economy usually recovers quickly from recessions, and the more severe the recession, the faster the subsequent catch-up growth.” The paper they’re relying on here is “Deep Recessions, Fast Recoveries, and Financial Crises: Evidence from the American Record,” by Michael Bordo of Rutgers University and Joseph Haubrich of the Federal Reserve Bank of Cleveland. So I asked Bordo whether he agreed that this recovery had been inexplicably sluggish, and whether a different set of policies could have dramatically shortened it.
“This recession is really quite different,” Bordo said. But he didn’t see government policy as the obvious cause…. That’s rather different than the Romney campaign’s interpretation of Bordo’s paper, which is that the features of this particular recession couldn’t explain the slow recovery, and thus you had to conclude that “America took a wrong turn in economic policy in the past three years.”…
Amir Sufi and Atif Mian’s look at the “Cash for Clunkers” program. Sufi, an economist at the University of Chicago, is quick to point out that his paper did not show a negative effect for “the administration’s stimulus policies.” His paper was just about Cash for Clunkers. “This was a $4 billion program. It’s nothing, basically. We weren’t saying anything specific about broader stimulus programs, we were just looking at these programs to bring forward purchases of durable goods.” So I asked Sufi what he thought of the stimulus more broadly. “Most of the research is pretty positive on stimulus,” he said. In particular, he pointed to a paper from Emi Nakamura and Jón Steinsson that used “cross-sectional data that seems to indicate the fiscal multiplier is quite large when you’re in a recession.” I also asked him whether he thought the Romney campaign was right that this recovery was unusually slow in a way that was best explained by policy failures. “I strongly believe the evidence shows these private debt overhangs are always longer, the recoveries always slower,” he said. So that’s two strikes for the Romney campaign….
I turned to the appendix. Of the four studies mentioned, two of them are co-authored by Berkeley economist Alan Auerbach. When I looked deeper into the studies, however, they didn’t seem all that applicable to Romney’s tax plan. The Romney campaign, for instance, was using an estimate from a simulation Auerbach ran in which he replaced the income tax with a consumption tax. If the Romney campaign proposed such a policy, that would be very big news. But they have not proposed such a policy. So I e-mailed Auerbach the relevant quote from the Romney campaign’s paper, and added two questions: “Given what we know and don’t know of the Romney plan, is it reasonable to attach these kinds of dynamic estimates to it? Do you think that reporters like me should assume that the 0.5-1% gdp boost is a reliable base case?” His response came quickly. “I did not see the [Romney campaign's] paper, but from your description the basic answer to both of your questions is ‘no’,” he replied. His paper looked at “a much bigger tax change than Romney is proposing.” It also “assumed that all tax changes were revenue-neutral on an annual basis; the size of the Romney tax cuts makes this a questionable assumption.”…
[E]ven the studies that the Romney campaign’s economists handpicked to bolster their case don’t prove what the Romney campaign says they prove. And some of the key policy recommendations that flow from those studies are anathema to the Romney campaign. And in perhaps the key policy area highlighted by these studies, the Romney campaign doesn’t have a formal policy. If this is the best they can do in support of their economic plan, well, it’s not likely to quiet the critics.