Tuesday, January 29, 2013

What Joe Scarborough Doesn't Know About Economics

     Could easily fill the Pacific Ocean. What he doesn't seem to get is that whether or not his economic views are conventional or not, they are quite wrong.

     Yet his post on Krugman is all about how Krugman's views are totally outside of the economic mainstream. It really depends what your "mainstream" or "conventional" encompasses. If you mean the conventional view among Right Wing talk show hosts then it's quite conventional. Krugman argues that his views are not unconventional at all-among Keyensian economists:

     "Scarborough seems upset, and under the delusion that my more or less standard Keynesian views are way off on the fringe. Also, that the Swedish thingie is given by Norwegian royalty."

      One suspects that part of why Scarborough is upset is because of Krugman's reputation among conservatives. Still the views he expresses in a Politico piece afterwards shows that Scarborough's views-whether or not their conventional are quite wrong.

     "Nobel Prize-winning economist Paul Krugman came on “Morning Joe” Monday to discuss his latest book and the state of affairs in Washington. Mr. Krugman's view is that Americans would be better off if its government ran deeper deficits and ignored its longterm debt. That, of course, runs counter to conventional wisdom across the Western world, which is exactly why the New York Times columnist believes Spain and Great Britain are suffering through endless recessions."

      "His argument also runs counter to what I have been saying in Congress and in the media since 1994. So it would be no surprise that the guy who wrote this, and this, and this and this over the past week would take exception to Mr. Krugman's words. But most of our viewers did not tune in to hear me talk over the Nobel Prize winner. They tuned in to hear Paul Krugman. So I
did my best to give him space."

      Read more:

      Again, who encompasses this Western world? In a way there are two questions: is he right that this is the conventional wisdom? Assuming it is, does this make it right? Of course not. History is replete with examples of the conventional wisdom of the time being wrong.

      I'm not sure that it's the conventional view of economists. It is certainly that of David Brooks' media. Yet how are people like Brooks, David Gregory, Bob Woodward, and Scarborough economists?

     "But maintaining calm was not as easy for Council on Foreign Relations president Richard Haass, who agrees with former Joint Chief chairman Michael Mullen, that longterm debt poses the greatest threat to America 's national security. Richard took exception to the suggestion that deficits don't matter and that longterm debt can be pushed to the side for years to come . Mr. Haass, Admiral Mullen and former Clinton chief of staff Erskine Bowles all believe that entitlements and debt are the most pressing challenges we face as a country over the next few decades."

   Read more:

  So why should we input special knowledge of the economy to the Council on Foreign Relations president? If it comes down to it why should we believe him over a Nobel prize winner in economics. Same question for a former Joint Chief chairman? When they say it's the most pressing problem are they including unemployment and recession among the choices?

   "You can add my liberal co-host, Mika Brzezinski, to that group. Mika let out a gasp when Mr. Krugman suggested Medicare and Medicaid shortfalls should be ignored. She compared Krugman's "head-in-the-sand" approach to the one taken by climate change deniers. Krugman took exception, saying that no one could predict the future of entitlements so there was no need to worry until the programs became insolvent."

    Read more:

    Again, I'm not sure what makes Mika an economic expert either much less why she's a higher authority than Krugman on economic matters. The analogy is false and Krugman never so much said we should "do nothing" about entitlements.

    What's striking is no one in Scarborough's Murderer's Row of noneconomists seems to have ever even heard of the words structural deficit. There seems blissful unawareness that deficits go up during a recession-automatic stabilizers, and a drop in tax revenue-and that much of it will be made up when the economy gets back to health.

     Until then we shouldn't be preoccupied with this morbid obsession with deficits, though it is the conventional Very Serious People wisdom. This is not the wisdom of economists so much as people who are quite innocent of economic knowledge.


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