The McCain candidacy was so incredibly bad that I'm also wondering whether someone shanked him. Rove's main contribution was to put Palin on the ticket, which probably did harm. Many Republicans dislike McCain personally, and sending Palin to the bottom with him could have been seen as a way of getting rid of him while keeping the wacko base happy, and while also giving them a little leverage on the wacko right since they can blame her for the loss too.
In week -5 of the failed Obama Presidency it's also pretty clear that the media have not changed and have learned nothing. There are a very small number of very good new people -- Olbermann and Maddow and the people they've been bringing on. But the Daschle Rostojevich news conference was totally disgusting, like we were back in Whitewater.
like we were back in Whitewater
Pithiest expression of this: Attaturk's headline at Firedoglake, "The Spirit of Jeff Gerth Compels You!".
Could it be that the dynamic we saw in the election is the reason for the "glass cliff" phenomenon? That is, people thinking "things sure are screwed up -- might as well try someone different and see what happens"? Seems more charitable than "let's look for a woman to take the fall", at least.
History has not been compassionate to Jimmy Carter.
In these cases, even as reflexively paranoid as I am, it is hard for me to see the causal mechanisms behind this correlation, at least for the Presidency. It is possible the best white males (although I don't see them) avoided the race, but since every Senator & Governor wants to be President, it seems unlikely.
One possible mechanism in a corporate scenario is a "Why not" attitude. As long as the company is going to hell anyway, why not emphasize other considerations, or have some fun, or let somebody pad their resume? I, back in the day, got most of my managerial experience that way.
Obama & Clinton were just the best candidates.
McCain got the nomination in the primary voting booths, and the average Republican voter wouldn't pick a fall guy.
That dynamic doesn't make much sense to me for the Presidency, it's just too desirable a position. It might make sense for the nomination in years you're pretty sure you're going to lose.
I think the "Why not" scenario works just fine for the election, too. Things are clearly going to be really bad, picking an off-beat candidate won't make them any worse -- what the heck, vote for the black guy. As I've said in other contexts, actions don't have to be malicious to have systematically damaging effects.
This is why after Arlen Specter is done further blackening his post-Bork legacy of shame with the Marc Rich pardon kabuki, Holder will end up getting confirmed. You're so smart boy, let's see what you can do. Never mind the destruction wrought by Ashcroft the Agalmatophile, Abu* the Fool and Mukasey the Faux Respectable.
* I still hold out some hope for Gonzales turning rat. Come on Abu, that gabacho Ashcroft is raking in millions as a lobbyist. What have you gotten for your loyalty and hard work? A pile of shit and an investigation. Doesn't it make your hot hispanic blood boil? You know who ultimately came out of Watergate with a good name? John Dean, that's who. What do you think Karl Rove really thinks of you?
Remember San Jacinto!
9 crossed with 8. You're right that a plan to maliciously leave the black guy holding the hot potato doesn't make sense; but the 'glass cliff' scenario doesn't depend on malicious motivation.
In my scenario, the decision to shank McCain was presumably made after he was nominated. Romney and Giuliani fizzled, and the Republican pros may just have realized that the electorate wasn't trending their way. They hated Huckabee too.
Going thru badtime history:FDR in 32, Truman/Dewey, Eisenhower, Nixon/Humphrey, Reagan were all mainstream default frontrunners.
Goldwater, Carter, Clinton were outsiders.
If you really wanted to explore the topic, there are many more datapoints for Senators, Governors, Congress, Mayors, etc. And overseas.
Does the fact that FDR couldn't walk qualify him as offbeat?
But of course this mechanism depends on a black or female candidate being at least plausible on the surface, which cuts out most data before a couple of decades ago.
Also, Hillary was a mainstream establishment default frontrunner if there ever was one, she wasn't a last-minute affirmative action thing after it was clear what a mess things were. I think she avoided running in 04 because she thought the Dems would lose.
Do female congresspeople still count as "offbeat"?
In other news, I have it on good authority that Obama's pick for HUD Secretary is so competent, and that job has such a history of being awarded as an afterthought check-the-box neo-patronage kind of punt, it is appropriate to think that a minor miracle has occured.
16: So her gender wasn't a factor at all. Good to have that unequivocably established by irrefutable evidence.
Honestly, what are you talking about? She was the first ever serious female candidate for President. Saying, in effect, "no, a gender related dynamic can't have had any effect because she was a mainstream default frontrunner" doesn't end the conversation.
Anyway, in the spirit of Ogged, I'm off to swim. (Not personally, the kids have lessons.)
20: what specific thing that I said in 16 do you actually disagree with?
Obama seems to be appointing a fair number of women. Somebody told me though that when they appointed Christy Romer, they were really trying to get her husband's advice, she's perfectly good, but he's got the real brains. I'd be interested to know what PGD thinks of this theory.
HUD Secretary is so competent
What an odd collection of words to find in the same sentence.
10: Awesome Texas Revolution reference. Worthy of Edge of the American West. Come to think of it, Lincoln was a "Radical Republican" pick with the Civil War looming....
20: Anyway, in the spirit of Ogged, I'm off to swim.
OK, but you owe us some unflattering description of someone else's body or behavior when you get back.
22: I have no opinion, I don't know them well enough to say. But I'm not sure why it matters. They often coauthor, so they work as a team. It seems like the kind of silly insider gossip you hear in economics where people ohh and ahh about who is "really smart" and who isn't. I'm pretty sure that Christina Romer has more "real brains" than the person you heard it from.
22:IIRC the Harvard recruitment story, Christina Romer has at least an administrative/managerial history that will commend her independently.
David might be a little smarter, but David is also pretty openly conservative/libertarian. Too much so to get a job even in this administration.
16:Was gender a factor for Thatcher, Golda Meir, Bhutto, Indira Ghandi? Gender was a factor for Clinton, but not in determing why she was a frontrunner. Except maybe for the association with Bill, in terms of an pre-existing machine. This explains much about the four women listed above, but also explains George W Bush, for instance.
I partly retract 27. Gender ethusiasm was more a factor for Clinton than Thatcher.
Things are clearly going to be really bad, picking an off-beat candidate won't make them any worse -- what the heck, vote for the black guy.
This seems to be at odds with the bitterly contested primary system. It makes slightly more sense for McCain, who won the nomination despite being everyone's third choice.
For whatever reason, America is more unfriendly to women leaders than almost any other non-Islamic country.
The thing is, during the run-up to the primaries and the early primaries (Fall 07-January 08) it was unclear how bad things were going to be now. The whole Great Depression II meme hadn't gotten out.
When things are going well, social policy becomes more conservative and everyone gets jerkier and less concerned with social welfare. I'd believe that on some unconscious level, people are more likely to reach for All American Frat Boy under those circumstances.
31:I suspect it has much to do with institutional and internalized tribal restraints in the other countries.
People pretty much knew that Thatcher, Meir, Bhutto, or Lurleen Wallace weren't going to go off the rails.
Heard a story fourth-hand about Bush ranting about how McCain ran a terrible campaign and that even he could have done better this election. For what that's worth.
I think people are understating how not-fucked America felt even 6 months ago. Hell, it was a gaffe but McCain still felt compelled to say "the fundamentals of our economy are strong" in September.
A lot of people turned to Obama because he was the smart young guy who might magically fix things.
35: yeah, back in spring 08 a lot of economists were claiming we weren't even in a recession.
The party pros might have seen the handwriting on the wall. As Dean Baker says several times a week, this stuff didn't surprise everybody.
Just everyone who trusted the NYT, WSJ, and WaPo.
A lot of people turned to Obama because he was the smart young guy who might magically fix things.
A magic negro, as it were?
31 - It's the influence of religious fundamentalism, IMO.
The party pros might have seen the handwriting on the wall. As Dean Baker says several times a week, this stuff didn't surprise everybody.
I agree that anyone who wanted to bother opening their eyes knew the recession was coming. But no one could have predicted that it could have been so spectacularly timed, election-wise.
It could have easily been that Lehman brothers held on for five extra weeks or whatever. In fact, it's kind of spectacular that they decided to let a corporation fail in the crucial window leading up to the election. I wonder if Republican insiders are kicking themselves for that blunder.
this stuff didn't surprise everybody
Not everyone was surprised, but not everyone who was surprised was a rube. AIG went from $70/share to $1/share; a lot of masters of the universe owned those shares.
Anyway, which wise Democratic white-man elder would have run in 2008 except that conditions weren't good enough (Obama only has an 80% approval rating, large majorities in both houses -- maybe it will be better in 2016?)
A magic negro, as it were?
Not every Boy Wonder in recorded history has been black.
It could have easily been that Lehman brothers held on for five extra weeks or whatever. In fact, it's kind of spectacular that they decided to let a corporation fail in the crucial window leading up to the election. I wonder if Republican insiders are kicking themselves for that blunder.
Blunder you say? I wonder if Republican insiders WANTED Obama to win so he could be blamed for the Depression! That's certainly the Republican Senate strategy.
We can go around and around.
At any rate, if Hillary had been the nominee I'm sure voters would have been comforted by the thought that she would work tirelessly on their behalf.
It's too bad that those diabolical Republicans kick-started the recession to start before the election; I think they would have been smarter to wait until Obama took office, so that they could more credibly blame him.
I wonder why these Machiavellian geniuses didn't do that.
To make sure that it was HIM who got elected and therefore blamed, Barbar! Obviously!
46: Yes, that's what I'm saying. That they weren't smart enough to do that, and it cost them at least having a competitive election.
44.---Hey, that's like 10 minutes' walk from my place!
49: The word "that" is no longer acceptable, as it has been cloned. One of those is 10 minutes' walk from your place.
Scroll right!
Just making sure everyone knows.
I was hustled by the Shluchim in Portland. Apparently I look Jewish. They were skinny young guys wearing old-fashioned outfits too big for them. They were expected to grow into them eventually.
A Hasid-Amish ecumenical conference would be fun.
Outside of politics, the post makes me think of Anne Mulcahy, the CEO of Xerox*, who was given the job when the double impact of accounting fraud and the dot-com bust nearly killed off the company. Her first instinct was to try to sell the company to Warren Buffett, who sensibly declined, but she managed to turn things around enough to stave off collapse.
I don't have any statistics to hand, but I think that most women in Fortune 500-land who end up in the C-suite are coming in as HR heads (which Mulcahy was**), corporate counsel, or CFOs, none of which traditionally are the kind of profit-and-loss centers that people see as setting one up to run a company. Maybe when things are on the verge of collapse, people are less inclined to pick a division head and more interested in picking up someone who knows how all the pieces of the company fit together.
* Which until recently was the third- or fourth-largest American company run by a woman, although I believe it's fallen down the list slightly.
* Mulcahy's groomed successor is also a woman, Ursula Burns, who came out of Xerox's engineering side and ran a profit center, their network copier business.
The party pros might have seen the handwriting on the wall. As Dean Baker says several times a week, this stuff didn't surprise everybody.
I think that the insiders thought the housing finance stuff could be contained, up through almost mid-2008. Wishful thinking. Even critical outsiders really seem compelled to believe that the insiders are smarter than they are. (Without reflecting that insiders are the people most vested in the system, and thus prone to wishful thinking). It's a vestigial longing for authority or something.
It's a vestigial longing for authoritybasic competence among self-professed experts.
The 'glass cliff' thing is in this week's NYT magazine; you may have seen a link to the concept's wikipedia page on Marginal Revolution.
Isn't it much more general than that? Crisis is an accelerant for existing trends.
59: The NYT is where I saw it, then -- I thought that might be it, but couldn't find it again to link to.
And 61: Couldn't you make as good an argument in the other direction, if that was how the data looked? Crisis drives people to the familiar and trusted?
Belatedly, 57 is great and makes me want to hug Otto. Yes, exactly.
Good point.
Pssst, Otto! If you add 10 years and move 3000 miles, let me know.
Otto may be chronologically too young for you, Witt, but—and I say this having met the both of you—I think you'll find that on any meaningful scale, he is just the right age.
It's a vestigial longing for authority basic competence minimal honesty and straightforwardness among self-professed experts.
And I'm plenty old. Not like that little squirt Otto.
It's a vestigial longing for basic competence among self-professed experts.
It's questionable to me what "basic competence" would mean in the case of massive, systemic economic fuckups that build up over decades. Economics is not a science and the economy is not well understood. Even if you have a sense that something bad is coming, the scale and magnitude of the institutions involved mean that you would have to make massive distributional and institutional shifts to do much about it. Those are big political decisions that will not be made without external pressure, certainly not just on "expert" say-so.
Because competent insider experts do understand how little they really know, they tend to be very deferential to established ways of doing things unless they are absolutely certain of the issue (deference to existing institutions is also how they become insiders, of course). There was a lot of "insider" discussion of instability and imbalances in the years leading up to this.
Don't get me wrong, I think the economics profession fucked up badly here, and pointing to various economists who saw it coming (a number did) doesn't change that. The deepest problem is the intellectual and material alliance between the financial sector and the economics profession (although the financial sector has a lot of power independent of economic ideology, I think it's probably the case that no economist could have risen far in even establishment Democratic policy circles without being acceptable to finance). If economists had been more deferential to the needs of, say, the manufacturing sector rather than finance we might be better off today. So "deference to the establishment" is not neutral. In that sense I'm being a bit of a devil's advocate. But still...you need to have a weirdly high level of faith in economics to think that "basic competence" in the field would allow you to predict future economic performance really well or to opine with a high level of certainty on the effects of policy changes.
Because competent insider experts do understand how little they really know, they tend to be very deferential to established ways of doing things
They know how their bread is buttered. Sharing their doubts with the ignorant masses would not be personally useful. No butter there.
I should mention again Jeff Schmidt's book Disciplined Minds. To quote my own self from the pragmatism thread up now on Crooked Timber, Obedience to unexamined paradigms is the main lesson taught in universities, and defines a class of highly skilled experts and professionals who will always be at someone else's service--i.e., obedient to management. One of the reasons why Democrats lose is that they mostly have a rule-following professional orientation, and have not learned the more aggressive, competitive, and assertive management skills, which are quite different.
H/T Megan of the Archives.
You'd think the experts would be able to tell you that economics is not a science, and would in fact do so, if they were (a) experts, (b) familiar, as a result of their expertise, with how little they know, and (c) honest, yet it's fairly rare that a soi-disant economic expert will say that, isn't it?
It's people who aren't experts who have reason to defer to the established way of doing things. Experts are the ones who should be able to say why the established way has been established and is preferable, which is not deference but defence*. If, on the other hand, they—the experts!—have no responsible choice but to defer, then that is a sign either that their expertise is sham, or that the established way is not defensible, in itself, on reasoned grounds. "My expert opinion is that no one's got a good idea what's going on so we should just keep on keeping on" is an admission that there are no real experts in the discipline per se, just historians of it.
*So spelled for orthographic harmony with the preceding.
It took me a while to figure out what that Disciplined Minds book was about, but now that I've figured it out, I'm pissed off. I was going to write that book.
It explains a lot, in a lot of areas of life.
Economics is a social science (with all of the limitations as a science that implies) stapled together with a branch of analytic philosophy.
But still...you need to have a weirdly high level of faith in economics to think that "basic competence" in the field would allow you to predict future economic performance really well or to opine with a high level of certainty on the effects of policy changes.
Dude, you're either being disingenuous or you're making a totally separate point.
I'm not looking for economists to tell me the day and time the stock market will go down and by how much. I'm not even looking for them to say "Well, if 20% of American homeowners have mortgages that require more than 65% of their gross monthly income, that's a reliable predictor that the economy will dip in the next six months."
I would like them to:
A. Stop pretending that they can predict what will happen with any level of precision (except for REALLY general trends and REALLY narrow ones.)
B. Follow basic norms of professional responsibility by not suspending sensible disbelief. Look, I expect engineers to laugh at other engineers who say we can build a bridge out of plywood and it will last 100 years. Why can't the economics and finance types laugh their heads off when a colleague suggests that we should lend money to people without verifying their income?
C. Stop pretending that their articles, speeches, and comments to the media don't provide professional and political cover for other, more reckless and careless people who are going to use their statements as justification for whatever scummy-ethics scam they want to run.
And skewed toward the maximization of production, consumption, and trade as absolute values.
Sharing their doubts with the ignorant masses would not be personally useful.
various establishment economists' doubts about the imbalances that were building up in the economy were readily available to all, right on the internet, and the good econbloggers have been talking about them for years.
The bottom line here is that we're not talking about a visit to your doctor or your auto mechanic. We're talking about a mix of real information, broadly hypothesized relationships, and raw ideology, and we're also talking about questioning the model of finance + trade deficit driven growth that fueled the economy from at least 1995, under Republicans and Democrats alike. As long as that model was working to generate growth it was very difficult to get traction to change it.
74: Ben, is philosophy a science? No? Well, then, is your expertise in philosophy a sham? There are many cases where expertise is real but still not consequentially predictive enough to uproot the lives of millions based on its recommendations.
Since economics has arrogated itself the right to do this at times, I certainly agree with you that more public modesty is in order from the profession. (The "where the bread is buttered" issue that John points to is clearly a factor here). They have a legitimate claim to expertise, but need to be modest about predictive power. The claim of economics to be a science rests on its attempt to use particular methods that are thought of as "scientific", not on predictive success using those methods.
Also, what Ben and John said.
(I'm ignoring 70; Emerson obviously thinks I've forgotten about Scarlett.)
Anti-pitchfork body armor can only go up. Buy!
Ben, is philosophy a science?
No, and I'm perfectly willing to say so, as are many other philosophers. I never said that one can only have expertise in a science. I said that admissions from economists that economics isn't one are thin on the ground.
There are many cases where expertise is real but still not consequentially predictive enough to uproot the lives of millions based on its recommendations.
So, no responsible economist would have recommended deregulation, right?
(Or maybe your point is that no one could have foreseen that deregulation might lead to consequences. Then they weren't expert enough even for that, and I'm left wondering what the use of economics as a predictive/policy-informing enterprise is.)
Anyway, I'm going swimmingto a party now, so you'll have plenty of time to come up with a defense of conventional wisdom.
As long as that model was working to generate growth it was very difficult to get traction to change it.
I actually agree with this, but that's not really my point.
various establishment economists' doubts about the imbalances that were building up in the economy were readily available to all
I don't want them just to make their doubts "available" (although that's nice); I want them to take action. Even if that means saying No at board meetings and having their friends think they are old-fashioned conservative fuddy-duddys who just don't understand why securitizing derivatives is the road to monetizing everything.*
*That bit was purposeful nonsense and if it sounds even vaguely plausible then heaven help us all.
That's the problem I have with academia. All the right answers are there, mixed in with all the wrong answers.
I'll buy 77. I think econ is a solid social science, as social sciences go. Economists should feel no need to hang their heads around psychologists or sociologists. Nor, notoriously, do they.
78: Witt, I agree with your A, B, C, but I certainly wasn't being disingenuous. I was trying to make a real point about what happens when the uncertainties of social science collide with the highest-stakes political and distributional questions. Perhaps I'm responding overly earnestly to what was simply meant as snark above.
Perhaps I'm responding overly earnestly to what was simply meant as snark above.
I'd say that's it.
PGD, my problem is that we have the Federal Reserve Board, the Council of Economic Advisers, and the Department of the Treasury. All of them are completely dominated by economics and finance, and all of them have enormous conflicts of interest. These make economics by far the most powerful body of knowledge there is in the policy world. And it's not good enough, too arrogant, and often too venal.
I'm all for renegade economists like Dean Baker or Roubini (if he's an economist), but they're hardly typical. I like DeLong and Krugman, but I don't competely trust either of them.
That's the problem I have with academia life. All the right answers are there, mixed in with all the wrong answers.
PGD, in 71 you said:
It's questionable to me what "basic competence" would mean in the case of massive, systemic economic fuckups that build up over decades. Economics is not a science and the economy is not well understood. Even if you have a sense that something bad is coming, the scale and magnitude of the institutions involved mean that you would have to make massive distributional and institutional shifts to do much about it. Those are big political decisions that will not be made without external pressure, certainly not just on "expert" say-so.
Regardless of who was being snarky above, I fundamentally disagree with your argument here -- or I guess I should say, your framing of the issue. Yes, sure, it's massive and systemic and took decades to develop. Yes, making massive shifts is hard and sometimes borderline impossible without an external galvanizing event.
But. This "massive" system is made up of a lot of little tiny systems, and people are not lemmings. There were thousands of people across the US who could have put themselves on the line a little more, used their professional expertise to say to fellow trustees, "Hey, why are we assuming there will be no consequences for doing this?" or taught their business-school classes a little more healthy skepticism, or shown up at municipal government meetings or reached out to state-level regulatory officials to provide public comment or testimony.
Look, wasn't it JRoth who was talking recently about the difference in foreclosure rates between Pittsburgh and Cleveland, and how that was partly due to the local banks' conservativism (and state regulation?) in not wanting to leap into these risky new types of loans?
This big hairball of economic mess happened because of a series of smaller decisions and priorities. You're darn right I'm willing to hold the self-professed experts and elites responsible for not having done more to prevent it.
84: obviously I think econ should weigh in on decisions that have consequences, just that it shouldn't present itself as the definitive word on those consequences. Responsible economists do in fact try to behave this way (hence the notorious on-the-one-hand, on-the-other-hand stereotype).
86: securitized loans, and the existence of derivatives, long predated this crisis and will outlast it too. Each separate part of this mess sort of had a justification on its own, but mingled together in a way that had really bad consequences. BTW, a few people did jump up and down and scream in the way you are describing -- Ned Gramlich (an insiders insider), Nouriel Roubini (who earned the nickname "Doctor Doom"), and Shiller at Yale. I think the position of the profession by 2006 was that the mortgage stuff was getting crazy, the bubble would burst, but it wouldn't spread to take down the whole financial system. Wishful thinking maybe, again.
87: this is true, but I sort of like that about academia. E.g. I take some comfort from the fact that Summers will probably be chatting with Krugman at Jackson Hole every summer.
BTW, I feel compelled to remind everyone that among economists I am barely recognized as one. You should hear my defense of managed trade.
91: Parsi, life doesn't make arrogant claims.
I don't feel that way about doctors or engineers. If I go to a doctor, I normally expect to receive treatment which meets a recognized acceptable standard. But I don't expect that of economists. I expect economists to give the "what to you want 2 +2 to equal?" answer.
Not me, I mean. Someone who can afford an economist.
92: I don't disagree with any of that. That's why the last para in 71 starts "Don't get me wrong, I think the economics profession fucked up badly here". I wasn't defending economics, I was responding to what struck me as a weird faith in its expertise expressed above.
After my defense of managed trade, I sometimes launch into my description of why Western economists have the blood of millions of Russians on their hands for their role in the 1990s privatizations. Would that calm the waters here?
Nothing personal, PGD. You're all cool.
I've felt since the mid-90s or before that we've effectively valued growth over stability (and everything else), regardless of the costs and risks of growth.
I think of economists, like lawyers, as highly skilled advocates that I can't afford. The problem isn't that they don't know anything, or even that they aren't as smart as they say they are, but that they're all working for someone else.
why Western economists have the blood of millions of Russians on their hands
I'm sorry, you must be new. Perhaps you are unaware, but our presumptive host has strong feelings about Russians.
94: I don't feel that way about doctors or engineers. If I go to a doctor, I normally expect to receive treatment which meets a recognized acceptable standard.
I don't know. A person might decide that the medical establishment has badly fucked up, what with the rise in diabetes, asthma, obesity, cancer, and so on. They're the experts! They should have known that agriculture subsidies designed to provide the cheapest possible foodstuffs and resulting in the prevalence of fast foods and corn-based products would result in such a poor diet that people would become increasingly unhealthy. And so on.
Obviously I'm playing devil's advocate here, and don't mean to make any strong defense of members of the economics profession.
I think econ is a solid social science, as social sciences go.
Fair enough. The problem is that econ seems to claim to be more than a social science, and certainly enjoys more status and prestige than other comparable disciplines, as social sciences go.
To put it another way: the problem is not that economists are not infallible, since fallible they must be, as "social scientists" (or researchers with some tools and methodologies, say, some of which are quite sophisticated, no doubt) dealing with the complex, messy realities of basically irrational human behaviour (some selective aspects of which can be tidied up to fit into neatly rational models, to be sure, but at bottom, the behaviour that has been simplified into generalizable units is still basically irrational). Rather, the problem is that, when an inevitably error-prone discipline enjoys a status that is at once quasi-religious and quasi-scientific, there's just not enough recognition of its fallibility.
Witt, you have an exaggerated notion of the importance of economists. (Not to say that economists don't have an outsized influence.) Greenspan isn't an economist (in the way that Laurence Summers is an economist, though according to Wikipedia he did some sort of "economic consulting"). Rubin isn't an economist. Paulson isn't an economist. Geithner isn't an economist. Economists don't by and large teach business school classes (they teach one or two token classes whose contents are completely ignored). The economists that do get jobs in the administration are those whose views are acceptable to the powers that be. It's no accident that Summers is back in the administration, and Joseph Stiglitz is not.
Economists have very little influence over the financial sector (and in general don't know much about the financial sector, other than in some angels-dancing-on-a-pin sense savings equals investment). Don't be fooled by the distribution of power in the United States. In a conflict between economists and Wall Street, not only would Wall Street win, they wouldn't even notice.
Walt, DeLong is an economist, and until a year or so ago he had a deferential admiration for Greenspan. Greenspan is an ABD in economics and at some point they decided to accept the American economic system as his dissertation.
Some economists actively disagree with the ruling economists, and many economists keep their head down and do technical work, but there are a lot more influential, powerful economists than there are influential, powerful philosophers, anthropologists, poets, men of letters, or even sociologists.
One way for economics to improve its public face would be something active to differentiate the profession from Greenspan, Summers, et. al. And ditch the Chicago School entirely. But there's no way that that will happen.
and Joseph Stiglitz is not
Speaking of whom, I'm just reading this.
I'm not saying economists didn't get it wrong. I'm saying that even if they had gotten it right the course of the crisis would have been the same. The "ruling economists" rule because they do the king's bidding, not because they have the king's ear.
78:
Stop pretending that they can predict what will happen with any level of precision
Nobody pretends this.
Why can't the economics and finance types laugh their heads off when a colleague suggests that we should lend money to people without verifying their income?
That's not the issue. Economists didn't advocate making loans without information. What they did was advocate that market participants should be trusted to make decisions in their own self interest. Not surprisingly, this is a much more defensible position.
Stop pretending that their articles, speeches, and comments to the media don't provide professional and political cover for other, more reckless and careless people who are going to use their statements as justification for whatever scummy-ethics scam they want to run.
This, yes.
What they did was advocate that market participants should be trusted to make decisions in their own self interest. Not surprisingly, this is a much more defensible position.
Not anymore.
Witt, you have an exaggerated notion of the importance of economists.
Well, I'll certainly cop to using the term more loosely and colloquially than anybody who works in the field would. So yeah, a bit sloppy on my part there. But this:
The "ruling economists" rule because they do the king's bidding, not because they have the king's ear.
is just a little too close to "I was only following orders" for my liking. Yes, they would have lost power if they didn't endorse what political folks wanted. Yes, most of us are human and like to hold on to what power and security we have, not give it up over a principle. But that's not enough. I expect engineers to speak out and/or quit a project if somebody is suggesting unsafe practices. I have no problem expecting the same of economists and their ilk when an unsafe financial practice is proposed, and arguing that there are a lot of fuzzy-line cases (not that you were doing this, Walt) is a distraction from the fact that there *are* some clear bright-line cases, and a lot of people blitzed merrily right by them. Including the people who are hired with taxpayer money to be the boring, safeguard-enforcing rulefollowers.
I'm sufficiently annoyed with 104 that I don't want to use up the energy to respond civilly, so let's just say I strongly disagree and leave it at that.
104 -- Yes. From and Econ 101 position, it's perfectly reasonable that some market participants would offer loans with much less bureaucratic hassle at a much higher price.
Here's something else annoying: Larry Summers is not actually a member of the Chicago school. For example, his academic reputation is partly built on empirical and theoretical work showing that the labor markets do not fit neoclassical assumptions well.
107: I'm not talking about Econ 101; I'm talking about which participants in society have the information and incentives to make good decisions. I suppose that now that we've learned that no one with a finance or economics background can be trusted to make decisions, bubbles will never happen again.
I expect engineers to speak out and/or quit a project if somebody is suggesting unsafe practices.
Of course, quitting won't stop the unsafe practices.
108: I knew that about Summers. His actual performance in a decision-making capacity is less impressive. Summers was a critical participant in the process by which placating Wall Street became the main job of the Treasury Department.
You know, Greg Mankiw isn't a member of the Chicago School either, and yet I don't think the Obama administration should hire him.
Another observation: if you don't pretend that you can predict anything with precision, you're going to have a hard time using your professional status to wrest power away from existing powerholders.
"I think we should implement unpopular policy X. Doing so will have some impact on the economy, probably good, but maybe not, it's hard to predict the future. Wait, now I have the keys to the kingdom? Great, thanks!"
101, 103, 104 are winning this thread.
Were an economist to have a perfectly accurate positive understanding of how the world works (eg
how to define and measure risk), what actually transpires would still depend on the norms of the kings calling the shots (the
great moderation is boring, we need more risk!).
In defense of technical work,
"Gentlemen, it is a disagreeable custom to which one is too easily led by
the harshness of the discussions, to assume evil intentions. It is necessary to be
gracious as to intentions; one should believe them good, and apparently they
are; but we do not have to be gracious at all to inconsistent logic or to absurd
reasoning. Bad logicians have committed more involuntary crimes than bad
men have done intentionally"
-- Pierre S. du Pont, a Deputy from Nemours to the French National
Assembly, 1790.
108.2:No, Marxist or Post-Keynesian economists should make th decisions, but not monetarists, especially Neo-Keynesian monetarists. Am I kidding?
I actually view economics as closer to religion than science, with Shia and Orthodox and Presbyterians and a thousand other sects with more or less in common. Some will say that if you eat with your left hand civilization will collapse. They may be right.
I am much more sympathetic to religion, crazed fringe politics, pseudo-science and other necessary irrationalities than most.
If you eat with your left hand you end up with e. coli problems, that's all. Retribution is quick and automatic.
Every time I see the name of this post, I think "Obama and the Great Glass Elevator."
Me too! I've almost posted "Obama and the Great Glass Cliffavator" several times now.
Only Obama can save America from the Vermicious Knids!
I just realized that Obama-bo-bama-fo-fama has subverted the Name Game.
Marx Marx, Bo Barack. Obama Fama Fo Farx, Fe Fi Mo-arx. Hitlery!
I continue to be slightly peeved at the reactionary tendency to blame! the elites! who were supposed to be the bosses of us, because they said so and we believed them, and who were to protect us from the Bad Things, which they did not do!
And I continue to be attracted to development of a similar line of reasoning regarding the medical establishment (cf. comment 98) as justifiably to blame for agricultural policy in this country, for failing to jump up and down loudly enough in denunciation of our national polluting habits -- everything from EPA policy to the USDA and on -- such that many of us are now fucked, healthwise.
Meh. The truth is that the nation as a whole is complicit in acceptance of a scheme of short term gain over long term health, whether financial, bodily, or environmental. As long as the majority of us have infantilized ourselves to the point of abdicating responsibility to a few authoritative decision-makers*, we're stuck with the possibility of being very surprised a few decades on by the ramifications of the roads we've taken.
(/ cliched pedantry)
* I'm reminded of the apparently somewhat popular sentiment that US automakers are to blame for having chosen to 'make cars nobody wants.' To which I can only reply: No, people did want them; I didn't see people making the hand-wringing decision to buy SUVs because they were just the only cars out there, such that automakers were cramming them down our throats.