I've been busy all week teaching an intense course. Thus the hiatus in my blogging.

I took the Charles Murray quiz that Arnold suggested and I scored, depending on the definition of a close friend, either 12 or 13 points out of 20.

I agree with the tenor of Arnold's criticisms. I have never worked on a factory floor, but, I suspect, given that under 20% of the labor force is in manufacturing and that number has been that way for a few decades, that under 50% of the population has ever worked on a factory floor. I did work my tail off in a nickel mine in northern Canada for a tad over 3 months in 1969, which was the answer that allowed me to say that my body hurt from working on a job.

I didn't recognize the athlete they showed but I did narrow it down to one of three: I watch ESPN Sports Highlights at least 3 or times a week.

On the Greyhound bus, I nailed it, having traveled almost 10,000 miles in the U.S. and Canada by Greyhound. In the longer version that one of Arnold's commenters referred to, I nailed it also, having hitchhiked at least 3,000 miles. Also, I attend about 3 Rotary or Kiwanis Clubs a year to give speeches. I highly recommend that activity. In fact, I'm doing so next Thursday. One reason I recommend it, though, does basically support Charles Murray's point: in graduate school at UCLA, my friend Jack High, who thought I was getting carried away with my rational voter idea, told me that I should attend a Rotary Club and see just how slim the average member's knowledge of politics and economics is.

We've been discussing Charles Murray's Coming Apart, and now there is a quiz you can take to find out if you are living in an elitist bubble.

My score was reported as "between 5 and 8," which is weird, since the questions had yes or no answers. I guess whatever exact number I got, they classified it as between 5 and 8. The lowest possible score is 0, which would be totally in the bubble. The highest possible score would be 20, which would make me a real representative of the common man.

I feel like the points I got were somewhat illegitimate. I got a couple points for having worked in a factory, but that was in a summer job in college almost 40 years ago. I also got a point for having a close friend who disagrees with me politically, but that's because I'm the weirdo. If it weren't for me, my friends would have nobody who disagrees with them.

Having said that, I thought some of the questions were type-casting and crude. Only a small minority of Americans have worked on a factory floor. "Manufacturing production workers" was about 6 percent of the work force, last time I checked. You don't want to say that the other 94 percent are living in the bubble. On religion, my understanding is that Murray claims that the upper classes are more church-loyal than the lower classes, but the quiz did not ask something related to that. Instead, it asked if you know any strong evangelicals.

I do think that the bubble is an issue. The really elite private high schools nowadays have students spend a semester in France or Spain. I think they would get a richer cultural experience spending a semester in a small town outside the Northeast.

Nick and I discuss this with Joseph Minarik (former OMB economist under President Clinton) and Peter Wallison. The full half-hour video is here. Below is a 3-minute preview.

The Cato Journal's special immigration issue is now out.  I have the lead article, entitled "Why Should We Restrict Immigration?" 

My piece sums up everything I've been saying about immigration since I joined the blog:

(a) Common-sense morality implies a presumption in favor of free migration.

(b) None of the main objections to free migration are remotely strong enough to rebut this presumption.

(c) Even I'm I'm wrong about (b), there are certainly cheaper and more humane remedies than forbidding migration. 

My conclusion:

Many libertarians would condemn [the American government's treatment of immigrants] as "inexcusable." I rest my argument on a weaker premise: whether or not the facts are "inexcusable," they do require an excuse. On the surface, it seems wrong to prohibit voluntary exchange between natives and foreigners. Proponents of immigration restrictions have to show why, moral appearances notwithstanding, immigration restrictions are morally justified.

They fail to do so. Immigration restrictions are not necessary to protect American workers. Most Americans benefit from immigration, and the losers don't lose much. Immigration restrictions are not necessary to protect American taxpayers. Researchers disagree about whether the fiscal effects of immigration are positive or negative, but they agree that the fiscal effects are small. Immigration restrictions are not necessary to protect American culture. Immigrants make our culture better--and their children learn fluent English. Immigration restrictions are not necessary to protect American liberty. Immigrants have low voter turnout and accept our political status quo by default. By increasing diversity, they undermine native support for the welfare state. And on one important issue--immigration itself--immigrants are much more pro-liberty than natives.

Even if all these empirical claims are wrong, though, immigration restrictions would remain morally impermissible. Why? Because there are cheaper and more humane solutions for each and every complaint. If immigrants hurt American workers, we can charge immigrants higher taxes or admission fees, and use the revenue to compensate the losers. If immigrants burden American taxpayers, we can make immigrants ineligible for benefits. If immigrants hurt American culture, we can impose tests of English fluency and cultural literacy. If immigrants hurt American liberty, we can refuse to give them the right to vote. Whatever your complaint happens to be, immigration restrictions are a needlessly draconian remedy.

This essay is me at my most persuasive.  In the acknowledgments, I thank my dad, one of the most bitter opponents of immigration I know.  If he were twenty years old, there's a 50/50 chance "Why Should We Restrict Immigration?" would have changed his mind.  At this point, sadly, I think my odds of success are more like 1%.

But I'll send him a copy anyway.

Bryan focuses our disagreement:

when 10% of the workers in an occupation lose their jobs, or 5% of firms in an industry go out of business, continuity isn't merely a convenient assumption. It's a hard fact.

So now it boils down to an empirical issue about how prevalent are discontinuities. That is a difficult issue to settle in a blog, and I certainly must allow for the possibility that I am wrong. But some examples of discontinuities that come to mind:

1. It seems that troubled firms, rather than laying off one worker at a time to lower costs at the margin, "clump" their layoffs into large batches.

2. Similarly, a company like Borders, rather than closing a few unprofitable stores, goes out of business completely.

3. When a company outsources customer support, it does not do so incrementally, by shifting cutting back its domestic customer call center by one or two workers and replacing them with a few people in India. Instead, the tendency is to move the entire call center.

I think that the better argument for continuity as a "hard empirical fact" would likely be that in spite of the fact that individual firms behave in discontinuous fashion, the aggregate market for labor acts as if it were continuous. I think that is likely to prove a better defense of continuity. However, it would not rescue Bryan's "wing-walking" hypothesis in which unemployment could be eliminated by having every worker remain in his or her existing job at a moderately lower wage.

Mark Thoma writes,

I hate to be Mr. Negative today, but I'm less than fully convinced that we are anywhere near embarking on a path that places the welfare of the middle class at the forefront of economic decisions.

One version of Mr. Negative is "We know exactly what sort of social engineering would produce a larger, richer middle class, but the Big Bad Meanies won't let us."

Instead, my version of Mr. Negative is, "We have many hypotheses about the causes of relative and absolute poverty, but we have few certainties. We are even less certain about what sort of social engineering, if any, would address these causes."

Tyler Cowen, sounding uncharacteristically self-assured, writes,

I see two big and very real problems: slow income growth for many income classes and a problem with excessively high returns to finance at the very top...If we could fix these problems, that would mean a smaller financial sector, less moral hazard, better allocation of capital, and for most/all income classes rates of income growth comparable to the 1948-1972 period, chop it up as you wish. Imagine that everyone's income went up three percent a year, every year, and every generation was about twice as rich as the parents.

I would say that this is true with only p = .15 or less. My recent narrative I would give a probability closer to .4. Charles Murray's analysis I might assign a similar probability (next week, his book will come out, so I can actually read it. At that point, p might move.)

I admit that my views on this have not changed much since Nick and I wrote this article. The only additional point I would make is that if you lift your perspective from the U.S. to the world, then what you see is a middle class that is increasing in size and wealth. Factor-price equalization may not be good for some Americans, but it is great for many Indians, Brazilians, etc.

I do agree with Tyler that this topic does not have to be as ideologically loaded as some people want to make it.

Arnold writes:

So, if the demand for mortgages collapses, all it takes to get back to 2006 levels is for mortgage underwriters to take a 20 percent pay cut?

In a world with no discontinuities, we would not get crazy subprime lending and sudden sharp drops in demand. The no-discontinuity world is what classical economists are trained to work with. Too bad it is not the real world.

The question isn't whether discontinuities ever exist in the real world.  The question is whether they're a big deal.  I see no reason to think they are.  Yes, a 20% wage cut probably wouldn't have saved many jobs in a handful of occupations like mortgage underwriting where demand suddenly dried up.  But what does this have to do with the vast majority of occupations?  What does this even have to do with the vast majority of firms? 

Take Borders.  It spent months hovering on the edge of bankruptcy.  Despite online competition, Borders still had plenty of customers and revenue.  It just couldn't quite manage to regain profitability.  Why wouldn't a 5 or 10% reduction in wages have sufficed to save the firm and its workers' jobs?

When an occupation or industry suddenly vanishes, Arnold can plausibly (though hardly decisively) point to discontinuities.  But when 10% of the workers in an occupation lose their jobs, or 5% of firms in an industry go out of business, continuity isn't merely a convenient assumption.  It's a hard fact.

Bryan writes,

(c) Workers continue to be employed at their old job for 5, 10, or 20% lower wages until an entrepreneur makes (b) happen.

So, if the demand for mortgages collapses, all it takes to get back to 2006 levels is for mortgage underwriters to take a 20 percent pay cut?

In a world with no discontinuities, we would not get crazy subprime lending and sudden sharp drops in demand. The no-discontinuity world is what classical economists are trained to work with. Too bad it is not the real world.

[Update: Another way to put this is that if you are a mortgage company in 2008 and an underwriter you just laid off begs you for his job back and says he'll take any wage you are willing to offer, your response is to hand him a dish and say, "20 cents an hour. Start washing."]

Arnold writes:

Suppose that a bunch of mortgage underwriters get laid off. There are two possible full employment equilibria.

(a) They can be instantly employed as dishwashers at 20 cents an hour.

(b)They can be employed as health insurance claims processors at a salary close to what they were making as mortgage underwriters.

The reason that we don't observe (a) is that wages are not perfectly flexible, if for no other reason than minimum wage laws. Point conceded to Bryan.

But the PSST story is focused on why we do not observe (b). The answer is that it takes time for entrepreneurs to figure out that there is a need for more health insurance claims processors, for the mortgage underwriters to seek and obtain retraining, etc.

Building on my wing-walking critique of PSST, I'm asking why the PSST story ignores a third, extremely plausible, full employment equilibrium:

(c) Workers continue to be employed at their old job for 5, 10, or 20% lower wages until an entrepreneur makes (b) happen.

Nominal rigidities can explain the failure of (c) to happen without invoking PSST.  Can PSST explain the failure of (c) to happen without invoking nominal rigidities?  I don't see that it can.

Felix Salmon writes,

Stanford was willing to spend hundreds of millions of dollars building a new physical campus in New York City -- but it isn't willing, it seems, to help Thrun build a free virtual campus which could reach the whole world. That's a dereliction of its educational duty. But where Stanford has failed, surely some other elite university will step in. Thrun is taking a bold step here. Let's hope he soon gets the support, if not of Stanford, then of some other college. Like Harvard, or Yale, or Oxford, or Cambridge. They're exclusive places now. But they don't have to be, in the future.

Read the whole thing. Pointer from Alex Tabarrok. Salmon is referring to Sebastian Thrun, who co-created the Stanford online artificial intelligence course.

My reaction to Thrun working independently is to celebrate rather than lament. Do I want the future of education to be tied to Stanford, Harvard, etc.? Absolutely not. I want to see educational disintermediation, in which students and teachers connect directly. With disintermediation, we will need new ways to identify quality teachers and successful students. Just as on the Internet search engines needed to figure out how to identify quality web sites and online market sites needed to figure out how to identify quality sellers. Let's develop new reputation systems for new teaching methods, rather than try to bolt the old Ivy League brands on to educational innovation.

Next week, I'm going to debate Modeled Behavior's Karl Smith on "How Deserving Are the Poor?"  Logistics:

Date: Wednesday, February 1
Time: 6:00-9:00 PM
Location: Johnson Center Meeting Room A, George Mason University (Fairfax Campus)

My strategy, as usual, is to use an uncontroversial moral premise to show that the status quo is absurd.  The premise: You are poor by your own fault if there are reasonable steps you could take - or could have taken - to avoid poverty.  Karl's position, in contrast, is that:

Why humans are suffering is of concern to us in knowing when our interventions might be productive but it doesn't affect whether they are warranted.

In the extreme, take the example of Fred, who is suffering because he constantly turns on the water in his bathtub too hot. When asked why, Fred answer I don't know, I just do. Hot baths always seem good right before I step in, and then I burn myself.

The key question here are

1) Is there anything productive we can do to help Fred

2) Will our resources be more productive in helping someone else.

However, the seeming absurdity of Fred's behavior is itself not and issue.

Here's one application of my economic philosophy of poverty, and Karl's reply.  Here's Karl on Beaulier-Caplan's "Behavioral Economics and Perverse Effects of the Welfare State; I wonder if he's made up his mind yet.  Fun, fun, fun.

P.S. The Econ Club is looking into recording the debate.  Stayed tuned.

Richard Green writes,

Let's just start by designing a code that requires that as adjusted gross income rises, the effective tax rate may not fall. That way taxpayers would be able to look at their own effective rate, and know that everyone with higher incomes would pay at least as high a rate.

Pointer from Mark Thoma.

Here is my own one-sentence proposal:

If A and B earn the same income, but A saves and B spends more, then A should not have to pay higher lifetime taxes.

Note that Green's principle sounds attractive, my principle sounds attractive, and they contradict each other. Consider A and B in my example. Because of higher saving, A's income will be higher, and according to Green this means that A should face a higher tax rate.

If the tax code is focused on reducing income inequality, it will have to punish saving. If the tax code is focused on not punishing saving, it will have to enhance income inequality. (Those of us who oppose punishing saving tend to view consumption inequality is a better measure than income inequality.) I see no way to reconcile that conflict.

Politicians do not want to surface and deal with this conflict in a coherent way. Instead, individual provisions in the tax code lean one direction or the other. Thus, it is easy for both Green and me to complain that the tax code violates our "simple" principles.

Arnold tells us:

The PSST story is equally consistent with a correlation between employment and nominal GDP. It just interprets the causality as running the other way. If a bunch of workers are laid off, for whatever reason, nominal GDP will go down, unless productivity and/or inflation rise in order to compensate.

But Arnold, without nominal rigidities, why doesn't the PSST model specifically predict that prices will adjust to restore full employment?  And if you allow nominal rigidities, what does PSST add to the standard Sumnerian story?  I don't mean to be difficult, I just don't understand how PSST makes sense without nominal rigidity.

Bryan asks,

without nominal rigidities, why doesn't the PSST model specifically predict that prices will adjust to restore full employment?

Suppose that a bunch of mortgage underwriters get laid off. There are two possible full employment equilibria.

(a) They can be instantly employed as dishwashers at 20 cents an hour.

(b)They can be employed as health insurance claims processors at a salary close to what they were making as mortgage underwriters.

The reason that we don't observe (a) is that wages are not perfectly flexible, if for no other reason than minimum wage laws. Point conceded to Bryan.

But the PSST story is focused on why we do not observe (b). The answer is that it takes time for entrepreneurs to figure out that there is a need for more health insurance claims processors, for the mortgage underwriters to seek and obtain retraining, etc.

Part of the reason that wages are sticky is that unemployed expect that the "right" equilibrium looks like (b) rather than (a). But more wage flexibility does not get you to (b). Instead it gets you to (a). That is why I do not think of wage flexibility as being a solution to problems of finding PSST.

To put this another way, suppose that policy makers, observing the correlation between nominal GDP and employment, try to exploit this correlation by raising nominal GDP. If there is enough money illusion, they will move the economy to (a). But I think instead all that happens is that the economy takes its own sweet time moving to (b), and in the mean time nominal wages and prices are higher than they would have been had the government done nothing.

Just as Milton Friedman predicted that the Phillips Curve would break down of policy makers tried to exploit it, I predict that the correlation between nominal GDP and employment will break down if policy makers try to exploit it. They will get mostly higher prices for their troubles. I may be wrong, and things are so bad that I would be willing to try the experiment for a while, but I predict that it will not turn out well.

The ratio of nominal GDP to employment is NGDP/L, where L is the level of employment. This can be decomposed into:

NGDP/L = (NGDP/RGDP) x (RGDP/L) = the GDP deflator x productivity

As long as inflation and productivity growth are close to trend, or as long as the product of the two is close to trend, the relationship between nominal GDP and employment will be close to trend.

This leads me to expect to find that when nominal GDP growth is low, employment growth is also low. You would only not get that if there were a big surge in inflation and/or a big surge in productivity.

The way I look at it, this means that the relationship between nominal GDP and employment has almost no theoretical import. In particular, it does not constitute evidence in favor of the AS-AD paradigm. The AS-AD story, as Scott Sumner tells it (and pretty much any mainstream macro would say the same thing), is that changes in nominal GDP cause changes in employment, rather than the other way around.

The PSST story is equally consistent with a correlation between employment and nominal GDP. It just interprets the causality as running the other way. If a bunch of workers are laid off, for whatever reason, nominal GDP will go down, unless productivity and/or inflation rise in order to compensate.

Defining aggregate demand as nominal GDP finesses such difficult issues as defining the money supply or justifying specific parameters of a macroeconomic model. But there is a priced to be paid. And that price is vacuousness.

Reihan Salam writes,

Suffice it to say, the thought of Chinese military officials deciding on how large a military the U.S. is allowed to retain is a sobering thought.

But that, alas, is a foreseeable outcome from the brand of rejectionist politics that has captured the imagination of a growing number of Americans on the right and the left, and which is fueling Newt Gingrich's success in this year's presidential campaign.

Political gridlock is the main theme of the five papers that were written about the prospects for a U.S. debt crisis and that appeared in Econ Journal Watch. All five of us see a debt crisis, if it comes about, as resulting from gridlock.

Ordinarily, advocates of limited government say that gridlock is our friend. But four out of the five of us see it as our enemy right now. The exception is Jeffrey Rogers Hummel, who looks at the bright side of a default. It would truly "starve the beast," because borrowing costs would become prohibitive in the absence of credible commitment to maintain something much closer to a balanced budget. It is an interesting point of view, but I cannot say that I am persuaded that other things will remain equal (what if a default causes an American version of Hugo Chavez to emerge?).

Unlike Reihan, I do not see this issue as affecting my views on the Presidential election. For one thing, I am not sure which electoral outcome is most likely to overcome gridlock on the budget. And I am not even sure that Hummel is wrong. If you want election commentary, instead of looking to me, I recommend Will Wilkinson's take.

Reihan and I hope to record a video conference with two of the other authors later this week. Hummel appears to be unavailable. Nick Schulz should be back joining us.

I'm an admirer of Charles Murray's Coming Apart.  But two big blind spots stand out:

1. Drugs.  Murray chronicles the massive increase in the U.S. prison population without mentioning, much less condemning, the War on Drugs. 

[S]urveys on drug use wouldn't begin until the late 1970s - but there certainly wasn't much happening that attracted the interest of the police.  In 1963, there were just 18 arrests for drug abuse violations per 100,000 Americans, compared to 1,284 per 100,000 for drunkenness.

For an explicit libertarian like Murray, this is a massive omission.  Yes, consumer demand and willingness to work in the illegal sector may have changed, too.  But if we retained the lax drug enforcement of 1963, there would be vastly fewer drug arrests and vastly fewer human beings behind bars.  This in turn would have important secondary consequences: A larger supply of free, legally employed men, trying to impress women with their industry rather than their machismo, leading to more marriage and more two-parent homes.

In the acknowledgments, Murray profusely thanks former Drug Czar Bill Bennett:

Bill Bennett deserves a special acknowledgment.  We had originally decided to write a book together and prepared a proposal on the same broad topic as Coming Apart.  At the last minute - and I do mean the last minute - I realized that the book I wanted to write would be such a personal statement that I couldn't collaborate with anyone, not even someone as simpatico as Bill.

I can imagine how a libertarian and Bill Bennett could be dear friends.  But I can't imagine how a libertarian could entertain the idea of co-authoring a book on the underclass with a drug warrior.  Even stranger, after dropping Bennett from the project, Murray still wrote a narrative that Bennett could easily accept.

2. The welfare state.  Murray strongly rejects social democracy, but he makes an undeserved concession:

With regard to advocacy of the European model: If you think that providing economic equality and security are primary functions of government, you should be a social democrat.

On the contrary: If you think that providing economic equality and security are primary functions of government, you should favor open borders.  Free immigration is the mightiest poverty program known to man.  It also greatly enhances security more broadly defined - as the Jews denied asylum by Roosevelt tragically remind us.  Open borders Gilded Age America was vastly more humane than any European social democracy could ever hope to be. 

Why not open borders and the European model?  Friedman's view that "You cannot simultaneously have free immigration and a welfare state" is greatly overstated.  But there probably aren't enough resources on earth to give European-level benefits to anyone who scrapes together the cost of a boat ticket.  Realistically speaking, you'd have to be more austere than the U.S. to make open borders work.  Murray should have proudly recommend this open borders + austerity package to the friends of equality and security, and affably insisted: "My policy beats yours on your own terms."

This is part of economics professor Walter Block's answer to someone who expressed deep pessimism about the prospects for liberty in the future:

I agree with your negative assessment of short term success. It is due to biological hard wiring, in my view. However, the fight is so much FUN! So, forget about whether we win or lose. You're right, we'll probably lose, at least in the short run. In the long run, who knows?

I urge you to focus, instead, on the sheer pleasure of undermining the world view of the mainstream media, and all those other blowhards in the pulpit, in academia, etc. Don't you just LOVE it when Ron tweaks their pompous noses?

I tell you, I've been in this libertarian movement since 1962. Then, there were but a few of us, a very few. We were fully, totally, and completely ignored by mainstream media. Nowadays, libertarianism is all over the place. We are EVERYWHERE. No longer are we libertarians confused with librarians, libertines, etc. Thanks to our man Ron Paul, we are acquainting millions of people with the freedom philosophy, and converting thousands, no--tens of thousands, no--hundreds of thousands of people to our banner.

I've noticed what Walter talks about in the last paragraph also. It seems as if libertarians have become the "Loyal Opposition," to take a phrase I learned growing up in Canada. One measure of our power is the frequency with which we are attacked: it's much higher now than a few decades ago.

Like Walter also, I think you need to have fun fighting against state oppression. In this series of three articles I wrote in 2004 (here, here, and here: read in order), I talk about how I had fun fighting against a local sales tax increase.

Larry Summers writes,

it makes sense for students to watch video of the clearest calculus teacher or the most lucid analyst of the Revolutionary War rather than having thousands of separate efforts.

True enough, but I think one should try to go beyond a vision in which technology just gets bolted on to the traditional system.

I have been looking at aleks.com, a math tutoring site. It has interesting strengths, along with frustrating weaknesses. I think that its greatest strength is that it offers very clear definitions of mastery of a topic, and it assesses students against those standards. It is very systematic about making sure you know something before you move on to something else. It can substitute for a teacher giving exercises. It gives feedback that is more personal to the student--what you need to work on, as opposed to what the median student out of a class of 25 needs to work on. It costs very little.

Against this, there are a number of weaknesses. One is that working with the software adds a layer of overhead to effort. For example, when I accidentally type in 1.08 instead of 1.80, I am punished for getting the wrong answer by being told I now have to work three more problems correctly in order to move on to the next concept.

In fact, the assessment process is in some ways worse than multiple choice. As with multiple choice, you get graded solely on results, not on process. But unlike multiple choice, you have an opportunity to make all sorts of irrelevant errors, such as accidentally inserting a typo in your answer.

Maybe on net ALEKS is a great step forward. But in the end, it feels to me somewhat like bolting technology onto an older model of learning rather than trying to imagine something really revolutionary. My ideal would be AI software that watches you do a problem, nudges you when you're going off track, and knows the difference between a careless mistake and a fundamental lack of understanding.

Back to Larry Summers, I think that education reform is not going to come from the college Presidents of the world. I think it is going to come from the bottom up, driven by the people who want to learn and by people who have innovative ideas for assisting them.

I think that at some point the best educated people will be self-educated. People like Ben Casnocha, who left college because I presume he felt it was slowing down his learning. Ben does not sit around at home, by any means. Every time I check out what he is doing, he seems to be in a different country.

I think that long before policy makers have figured out how to get everyone into college, college will have become obsolete.

Meanwhile, speaking of bottom-up, note this plea from Neerav Kingsland to school superintendents:

rid yourself of the notion that your current opinions on curriculum, teacher evaluation, technology, or anything else will be the foundation for dramatic gains in student achievement...let me suggest another identity--one whose charge is to return power, in a thoughtful manner, back to parents and educators. Let's call these types of superintendents Relinquishers. With great diligence, these superintendents attempt to transfer power away from a centralized bureaucracy.

David Colander writes,

not only are economists as a group not humble enough, what lay people are presented as economist's policy recommendations are often the policy recommendations of the least humble economist. In summary, my argument is that lack of humility in conveying the limitations of their results is the most serious ethical problem facing economists; it played a much larger role in causing the recent financial crisis than did the type of payments highlighted by Inside Job. Thus, and any new code of ethics for economists should deal with that humility problem.

Pointer from Tyler Cowen. To say that I agree would be an understatement.

The article goes on to draw an analogy between economics and engineering, which I might quarrel with. The way I think of engineering, at some point the engineer knows whether the system or product works, in the sense of doing what is supposed to do. In economics, I doubt that we obtain comparably reliable knowledge about whether a policy or economic model works.