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from Steve Randy Waldman:


To DeLong, Robert Rubin remains a pontiff of the "bipartisan technocrats". To the rest of us, Rubin has become an icon of self-delusion, corruption, and arrogance.

There is more, in what Tyler Cowen calls "The best post I've read in some time."

The general topic is fiscal policy, and the specific topic is Brad DeLong's claim to speak for sensible, centrist technocrats. It appears that DeLong defines a sensible, centrist technocrat as someone who finds the case for Keynesian fiscal policy compelling in today's environment. In that case, I am not a sensible, centrist technocrat, but you knew that already. After all, when the sensible, centrist technocrats backed TARP, I was vehemently opposed.

There is a deeper question that Steve and Tyler raise, which is whether an economist should propose the ideal policy, knowing that it will be rejected, or meet the political situation half-way. One not-very-charming reason for proposing politically infeasible policies is to put yourself in a safe position to say I told you so. However, there are also not-very-charming reasons for proposing politically palatable policies.

The political market will select for policies that raise the status of the political leaders who advocate them. There is not much one can do about that.

I think that sensible, centrist, technocrats are a curse, rather than a blessing (insert well-known William F. Buckley quote here). But there is not much one can do about that, either.


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CATEGORIES: Political Economy



COMMENTS (6 to date)
Pava Renat writes:

Anyone who believes that "sensible, centrist technocrats" have any claim to expertise in macroeconomic forecasting should read and ponder the following article by Scott Armstrong, marketing prof at Wharton:

http://marketing.wharton.upenn.edu/documents/research/Warmaudit31%205.pdf

While the paper deals with global warming, the central point is quite general: when it comes to issues on which there is no firm scientific truth established, guesses by so-called "experts" are no better than guesses by non-experts. Obviously, if there is no empirical truth already established, all you have is opinion.

So beware Trojan horses that claim to be centrist experts. Most likely, they have an agenda and are trying to sell you something.

Ted writes:

Firstly, only one of Delong's proposals have anything to do with Keynesian economics - namely his proposal for fiscal stimulus. But even that is misleading since you can get multipliers larger than 1 within a neoclassical growth model with perfectly flexible wages and prices, so long as public investment is sufficiently productive.

So, there is actually nothing nessecarily Keynesian about his proposal.

In terms of whether or not to recommend political feasible policy - it depends. It depends on how substantial an improvement on the status quo a political feasible compromise would entail - even if it's not Nirvana. Take, for example, financial reform. It would be nice if government could credibly commit to not bailing out large financial institutions, but it's unlikely to happen. Thus, a resolution authority would seem to be a dramatic improvement even if it's not ideal.

Philo writes:

You ask "whether an economist should propose the ideal policy, knowing that it will be rejected, or meet the political situation half-way." Why focus on just these two alternatives? There's the ideal policy, which has (say) a 0.000000001% chance of being adopted (thus you "know" it will be rejected); there's the best policy among those that have at least a 10% chance of being adopted (that's probably about what you mean by "meeting the political situation half-way"); and there's the best policy among those that have at least an x% chance of being adopted, for each x between 0.000000001% and 10%. There's also "meeting the political situation *all the way*," which would be merely specifying what was the policy most likely to be adopted. (Suppose it has a 25% chance of being adopted; then it is *the best policy among those that have at least a 25% chance of being adopted*.)

But you seem to overlook the possibility that the economist not be limited to "proposing" a single policy; he might be able to specify as many of these policies as he liked, assigning each to its proper place in the evaluative hierarchy. True, there are probably too many for him to mention all of them: he'd have to be somewhat selective. But you are supposing, implicitly, that he is able to mention *only one* policy; that is a possible scenario, but often he will have room for a more nuanced exposition. Then he need not make the choice that troubles you.

david writes:

@Paya Renat - if you are quoting a marketing prof on global warming, it's no wonder you find experts unreliable - you're really, really bad at identifying experts whose expertise is relevant to the subject.

Doc Merlin writes:

"There is a deeper question that Steve and Tyler raise, which is whether an economist should propose the ideal policy, knowing that it will be rejected, or meet the political situation half-way."

Because of the Overton window, its always better to propose ideal policy that will be rejected. By doing so, you move the mean of public discourse.

Tom writes:

David,

Scary thing is that the marketing guy probably has a better handle on statistics than the climate scientists.

Some of the statistical work they have done would have them fail out of any modest stats program.

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