Though he likes to claim he doesn't read my blog he says things from time to time that suggest otherwise-like my negative posts. Here I won't call him a Paul Ryan Republican-though I think he is one-but rather say something that he would find flattering.
For exhibit A of why I call him a Paul Ryan Republican see
http://www.themoneyillusion.com/?p=14381
Actually he's just posted another Paul Ryan like piece:
http://www.themoneyillusion.com/?p=14397
This one attacks the Buffett Rule.
However this post is not about how Sumner is like Paul Ryan-though they probably agree on 99.9% of policy questions.
No I will talk about something he likes-the way in which he truly is the precursor to Milton Friedman. After all we know he likes this like when he gushed after Krugman referred to him in the same breath as Friedman.
http://www.themoneyillusion.com/?p=14228
Krugman had sais this:
"There are a handful of people, someone like Scott Sumner, who I would regard as in a lot of ways as the heir to Milton Friedman . . ."
Sumner responds to this as it is the highest praise-which for him it is:
"I’ll take that!"
"I won’t respond to the meat of his argument here, as I’ve already addressed that issue ad nauseum. Instead I’ll just remind readers that over the last three years I’ve occasionally argued that Paul Krugman is in lots of ways the heir to John Maynard Keynes."
"I’m done with Krugman bashing. I’ve finally gotten over that slight from back in March 2009. It’s all respectful disagreement from now on."
Well gee Scott can you and I just engage in respectful disagreement? Or are you going to play the credentialist card again and claim I'm over my head in reading your blog because I don't have an advanced degree in Macro?
I honestly do see a lot of similarities between Sumner and Friedman. Both were the "titular" leader of major schools-Sumner of the Market Monetarists, Friedman of the traditional Monetarists.
Indeed Sumner even has a monetary policy rule-NGDPT to go with Friedman's growth of the money supply rule.
Both are interesting, engaging and very thought provoking. Sumner makes a point to answer all his comments-which sometimes number in the hundreds. Friedman's day was pre-Internet but I've seen some speeches he gave at colleges and he was a very engaging speaker who answered lots of questions.
Still I would extend the similarities to certain negative traits as well. To my mind they both way overstate the idea of policy rules. My feeling is that rules are made to be broken. I agree Sumner's NGDP sounds like a better rule than Friedman's money supply growth rule but then like they say hindsight is always 20-20.
I don't think anyone put it better about the illusion of a single monetary rule better than Alan Greenspan himself:
"Yet throughout his time at the helm of the Fed, Greenspan avoided any announcement of a policy rule, valuing flexibility over commitment. Here is how Greenspan (2003) defended his choice: "Some critics have argued that such an approach to policy is too undisciplined--judgmental, seemingly discretionary, and difficult to explain. The Federal Reserve should, some conclude, attempt to be more formal in its operations by tying its actions solely to the prescriptions of a formal policy rule. That any approach along these lines would lead to an improvement in economic performance, however, is highly doubtful….Rules by their nature are simple, and when significant and shifting uncertainties exist in the economic environment, they cannot substitute for risk-management paradigms, which are far better suited to policymaking."
http://www.cep.ccer.edu.cn/cn/userfiles/Other/2010-05/2010051110440438644377.pdf
Another way in which I think Sumner is like his hero is a tendency for sophistry. To be sure he-like old Milt-is clever but he's clever in a sophistical way. He also tries to use his advantage in Macro education to overawe and intimidate sometimes. Because he can't overawe me he's a few times tried to simply tell me-as I didn't get the message-that I'm "in over my head." As I know very well I'm not I take such comments for what they're worth.
In many ways what guys like Scott and Milt and many of the economists who write for the Wall Street Journal editorial page or the Cato institute have over the "median reader" is the classic example of the economic idea of "asymmetrical knowledge."
A classic example is when the Pentagon demands more weapons systems. Suppose they demand $20 billion dollars of new funding for the weapons. Now if they're before Congress formally making this request there may be some skepticism. Suppose a skeptical Congressman questions a Pentagon official about whether or not there's a real need for the full $20 billion. Either the Congressman is a Democrat or that rarer bread of a skeptical Republican-Republicans are usually skeptical of any new spending requests accept those for the military.
Now our Congressman is skeptical although he really doesn't know as well as the Pentagon guy what their exact needs are. He kind of using logic and what Kant called "intuition" logically infer they don't need this much.
Let's say he's right-generally speaking this position is right very often. However, the Congressman still doesn't necessarily know
Still to an extent he's at a disadvantage. Not a fatal one but it's there. It seems to me that in some ways that's the advantage of people like Sumner and Friedman-Krugman too-as opposed to the layperson. They know certain things that the "median layperson" or "median Scott Sumner reader" lacks. My feeling is he often tries to exploit this as Friedman did too.
Now about this idea of sophistry? It's like the old saying goes, "I may not be able to define pornography but I know it when I see it." Same goes for sophistry. Let's look at an example of impressive Scott Sumner sophistry:
"There’s nothing more dismaying that seeing progressives revert back to the mistakes of the past. I’m talking about the renewed interest in super high top marginal tax rates. Rates even the Nordic countries abandoned years ago. Even worse, they want to apply the taxes to income, not consumption. As if higher taxes are going to make Buffett move into a smaller house in Omaha, rather than cut back on his donations to the starving kids in Africa."
http://www.themoneyillusion.com/?p=14355#comments
Classic concern trolling this talk about "starving kids in Africa." There are many variants of concern trolling and Sumner seems conversant with them all. Here he eludes to being concerned about the starving kids in Africa.
Friedman showed us the ultimate classic case of concern trolling when he declared "We are all Keynesians now." Do you think it was accidental that in the next few years we had what Michael Lind calls "The Strange Death of Maynard Keynes?" What better way to fight a rearguard battle than to give lip service to support of what you seek to kill? Friedman's declaration was tactical, close to the nadir of the Keynesian age. Of course 30 years later Friedman would not say that.
More gems from Sumner:
"Those who have taught economics know that some points that are seemingly obvious can go right over the heads of most students. For example, subsidies are negative taxes, and hence have the opposite effect of tax increases. If taxes raise prices, then subsidies cut prices. (I kid you not, many students think a tax will be passed on to consumers, but a subsidy will be pocketed by corporations. Why you ask why, they actually think it’s in the corporation’s interest to pass on tax increases, and pocket subsidies. By which logic a $20 tax combined with a $20 subsidy, i.e. a “nothing,” would cause prices to rise by $20. Go figure.)"
This 'taxes raise prices, subsidies lower prices" is similar to his tautology when he was firing off posts every day attacking Simon Wren-Lewis-remember when he kept insisting that savings means spending on capital goods? Here is it trying to confuse the question by arguing if you add $20 and take it away you have 0. This is true but misleading about subsidies. If you subsidize a business-like the current oil company subsidy-there's no guarantee there will be price cuts.
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