Bloomberg report: US economic policy debate is a sham - Politics and Economics

Wynton · 07-24-2012, 08:44 AM

http://www.bloomberg.com/news/2012-0...wpisrc=nl_wonk

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In reality, there’s remarkable consensus among mainstream economists, including those from the left and right, on most major macroeconomic issues. The debate in Washington about economic policy is phony. It’s manufactured. And it’s entirely political.

Let’s start with Obama’s stimulus. The standard Republican talking point is that it failed, meaning it didn’t reduce unemployment. Yet in a survey of leading economists conducted by the University of Chicago’s Booth School of Business, 92 percent agreed that the stimulus succeeded in reducing the jobless rate. On the harder question of whether the benefit exceeded the cost, more than half thought it did, one in three was uncertain, and fewer than one in six disagreed.

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Or consider the widely despised bank bailouts. Populist politicians on both sides have taken to pounding the table against them (in many cases, only after voting for them). But while the public may not like them, there’s a striking consensus that they helped: The same survey found no economists willing to dispute the idea that the bailouts lowered unemployment.

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How about the oft-cited Republican claim that tax cuts will boost the economy so much that they will pay for themselves? It’s an idea born as a sketch on a restaurant napkin by conservative economist Art Laffer. Perhaps when the top tax rate was 91 percent, the idea was plausible. Today, it’s a fantasy. The Booth poll couldn’t find a single economist who believed that cutting taxes today will lead to higher government revenue -- even if we lower only the top tax rate.

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The consensus isn’t the result of a faux poll of left-wing ideologues. Rather, the findings come from the Economic Experts Panel run by Booth’s Initiative on Global Markets. It’s a recurring survey of about 40 economists from around the U.S. It includes Democrats, Republicans and independent academics from the top economics departments in the country. The only things that unite them are their first-rate credentials and their interest in public policy.

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The debate about the long-run challenge posed by the federal budget deficit has also become divorced from economic reality. The same panel of economists was almost unanimous in agreeing that “long run fiscal sustainability in the U.S. will require cuts in currently promised Medicare and Medicaid benefits and/or tax increases that include higher taxes on households with incomes below $250,000.” Only one in 10 was uncertain. None objected.

Likewise, popular tax deductions such as that for mortgage interest didn’t fare well in the surveys and would be on almost any economist’s list of targets for reform. Yet neither party is willing to propose such policies.

esad · 07-24-2012, 08:59 AM

Homer: Not a bear in sight. The Bear Patrol must be working like a
charm.
Lisa: That's spacious reasoning, Dad.
Homer: Thank you, dear.
Lisa: By your logic I could claim that this rock keeps tigers away.
Homer: Oh, how does it work?
Lisa: It doesn't work.
Homer: Uh-huh.
Lisa: It's just a stupid rock.
Homer: Uh-huh.
Lisa: But I don't see any tigers around, do you?
Homer: Lisa, I want to buy your rock.

adios · 07-24-2012, 09:30 AM

Quote:

Originally Posted by esad

Homer: Not a bear in sight. The Bear Patrol must be working like a
charm.
Lisa: That's spacious reasoning, Dad.
Homer: Thank you, dear.
Lisa: By your logic I could claim that this rock keeps tigers away.
Homer: Oh, how does it work?
Lisa: It doesn't work.
Homer: Uh-huh.
Lisa: It's just a stupid rock.
Homer: Uh-huh.
Lisa: But I don't see any tigers around, do you?
Homer: Lisa, I want to buy your rock.

Good stuff. Yeah this opinion piece is pretty bad. The economy is an albatross for the Dems in this election cycle. I thought it would be doing better at this point myself tbh.

Fermion5 · 07-24-2012, 10:35 AM

This should be obvious. Both the left and the right follow Keynesian economics.

Ashington · 07-24-2012, 10:40 AM

Quote:

Originally Posted by adios

Good stuff. Yeah this opinion piece is pretty bad. The economy is an albatross for the Dems in this election cycle. I thought it would be doing better at this point myself tbh.

It's hilarious to me that you seem to value your own opinion over the opinions of actual economists.

bobman0330 · 07-24-2012, 11:03 AM

Everything the article says is obviously true. My question is whether this should be viewed as a condemnation of our politicians or of our economists. Of course politicians are opportunistic sleazes who will spout any lie to get elected. The system was built to deal with that. But when Mitt Romney says extending the Bush tax cuts will solve all our problems, none of the right-leaning economists say anything. And when Obama proposes his new outsourcing tax, no progressive economist speaks up. To take an example, the most visible economist in the world has intentionally converted himself into a political hack rather than trying to represent the neutral voice of economics. It's not good news.

Low Key · 07-24-2012, 11:14 AM

Not to sidetrack, but if you substitute "economic" with, oh, say, anything else, when is the statement "US * policy debate is a sham" not true?

Chips Ahoy · 07-24-2012, 11:30 AM

Quote:

Originally Posted by esad

Lisa: That's spacious reasoning, Dad.

specious imo

Chips Ahoy · 07-24-2012, 11:32 AM

Quote:

Originally Posted by Low Key

Not to sidetrack, but if you substitute "economic" with, oh, say, anything else, when is the statement "US * policy debate is a sham" not true?

pro wrestling. sports. probably some reality tv.

Low Key · 07-24-2012, 11:35 AM

No, I'm pretty sure our sports policy debate is a sham, if you include the steroid hearings

leavesofliberty · 07-24-2012, 11:36 AM

you know, people who leave the job market are not considered jobless. it's that kind of sham the media propagates.

leavesofliberty · 07-24-2012, 11:39 AM

Quote:

Originally Posted by Low Key

Not to sidetrack, but if you substitute "economic" with, oh, say, anything else, when is the statement "US * policy debate is a sham" not true?

basically, here's my code for the four letter words, often inspired by politics

\w{4}

Low Key · 07-24-2012, 11:44 AM

your code for four letter words is five characters long?

superleeds · 07-24-2012, 11:50 AM

And in other news the sun will rise tomorrow and bears do indeed **** in the woods

**MrWookie** · 07-24-2012, 11:52 AM

Who needs an advanced degree in economics? I have an axiom!