We've discussed before my personal run ins with Sumner-what he does is hide behind the smokescreen that I'm too ignorant to discuss economics with him.
http://diaryofarepublicanhater.blogspot.com/2013/10/mark-sadowski-and-my-apparent-war-with.html
http://diaryofarepublicanhater.blogspot.com/2013/10/why-sumner-claims-im-ignorant-of.html
He also has a real problem with my writing a blog-he thinks I shouldn't be allowed to write it at all as I'm supposedly don't understand economics. He once claimed that I need to read some books first. Now, rest assured, I don't take anything Mr. Sumner could ever say to heart, I just consider the source. Of course, if I were to ask him what books I have to read to get this seal of approval he wouldn't answer-because it's a cop out.
His whole modus operandi is a cop out but it's not just about me and it's not personal. A key thing he likes to say is that there is no such thing as public opinion in economics.
http://www.themoneyillusion.com/?p=15005
Does this make him an anti-democrat? He will say no as he also always insists that he believes in democracy, however, the catch is just not in economics. This is the real key: if the public is too ignorant of economics then the answer is to leave it to the total control of ostensible monetary experts-ergo, the need for 'CB independence.'
He will argue that he thinks that laypeople should be able to make decisions, just not in those things effecting the economy. The trouble is if noneconomists aren't allowed to the conversation about economics what's really left for them? I mean as far as public policy goes, what is more important than the economy? This whole meme of the need for a technocratic monetary elite to run the economy for us who are too simpleminded to get it is wrongheaded.
This is why he hates fiscal policy to be used in demand stimulus and stabilization-he thinks the public should have no say in the working of the economy which is about the most deadly serious matter for any concerned citizen.
Economists believe all kinds of things that most people don't-like that it's legitimate to raise the prices of snow shovels in the winter and that the minimum wage has cataclysmic effects on the economy. No wonder why Sumner hates democracy in economics so much-we've long since ignored the technocrats on such things.
For more see
http://diaryofarepublicanhater.blogspot.com/2013/10/dont-feed-bears-or-smile-at-children.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29
Unlearning Econ argues that the economy might do well if we stopped listening to the economists. He does also give rules on how not to argue with economists. I wonder how many of them I may have broken here.
P.S. I've said it before I'll say it again: Annoy Scott Sumner, read Diary of a Republican Hater.
http://diaryofarepublicanhater.blogspot.com/2013/10/mark-sadowski-and-my-apparent-war-with.html
http://diaryofarepublicanhater.blogspot.com/2013/10/why-sumner-claims-im-ignorant-of.html
He also has a real problem with my writing a blog-he thinks I shouldn't be allowed to write it at all as I'm supposedly don't understand economics. He once claimed that I need to read some books first. Now, rest assured, I don't take anything Mr. Sumner could ever say to heart, I just consider the source. Of course, if I were to ask him what books I have to read to get this seal of approval he wouldn't answer-because it's a cop out.
His whole modus operandi is a cop out but it's not just about me and it's not personal. A key thing he likes to say is that there is no such thing as public opinion in economics.
http://www.themoneyillusion.com/?p=15005
Does this make him an anti-democrat? He will say no as he also always insists that he believes in democracy, however, the catch is just not in economics. This is the real key: if the public is too ignorant of economics then the answer is to leave it to the total control of ostensible monetary experts-ergo, the need for 'CB independence.'
He will argue that he thinks that laypeople should be able to make decisions, just not in those things effecting the economy. The trouble is if noneconomists aren't allowed to the conversation about economics what's really left for them? I mean as far as public policy goes, what is more important than the economy? This whole meme of the need for a technocratic monetary elite to run the economy for us who are too simpleminded to get it is wrongheaded.
This is why he hates fiscal policy to be used in demand stimulus and stabilization-he thinks the public should have no say in the working of the economy which is about the most deadly serious matter for any concerned citizen.
Economists believe all kinds of things that most people don't-like that it's legitimate to raise the prices of snow shovels in the winter and that the minimum wage has cataclysmic effects on the economy. No wonder why Sumner hates democracy in economics so much-we've long since ignored the technocrats on such things.
For more see
http://diaryofarepublicanhater.blogspot.com/2013/10/dont-feed-bears-or-smile-at-children.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+DiaryOfARepublicanHater+%28Diary+of+a+Republican+Hater%29
Unlearning Econ argues that the economy might do well if we stopped listening to the economists. He does also give rules on how not to argue with economists. I wonder how many of them I may have broken here.
P.S. I've said it before I'll say it again: Annoy Scott Sumner, read Diary of a Republican Hater.
Mike Sankowski takes on Sumner in this post;
ReplyDeletehttp://monetaryrealism.com/ngdp-futures-still-dont-work/
I love this comment;
"Honestly, the dismissal/rebuttal to the core problems I identified with NGDP futures is really a bit lame. Waving your hands and saying “Well someone will figure this out!” misses something very, very important. I am the guy who figures this stuff out for futures markets. I am that someone, and my warning light is flashing for NGDP futures."
Of course to Scott, Sankowski cant be the expert because he doesnt agree with Scott and Scott just KNOWS that NGDP targeting via an NGDP futures market will work. How does he know it will work? Because he thought of it!!
And the number of readers that follow Scott and cheer him on in the comments is laughable really. Scott is a frikken charlatan of the highest degree. He's only popular because he is so emphatic in his supposed debunking of Keynes. The people out there who simply read Keynes as "govt big spending advocate always" just love Scott.
ReplyDeleteVery humorous that Scott would say;
"he also always insists that he believes in democracy, however, the catch is just not in economics. This is the real key: if the public is too ignorant of economics then the answer is to leave it to the total control of ostensible monetary experts-ergo, the need for 'CB independence."
What do monetary experts have to do with economics Scott? I thought money was a neutral veil? We dont even need money to understand economics according to all of Nick Rowes quaint little stories. Money is just another good. If its just another good why cant homo economicus figure out how to use it since we are so rational and create totally efficient markets?
"that the minimum wage has cataclysmic effects on the economy."
ReplyDeleteUmm. no. The recent research on the minimum wage, by Card and Krueger, and more recently by Robert Reich, says that raising the minimum wage has little effect on unemployment.
Even those who are against the minimum wage like me and have problems with the new research are not against it because we want the poor to suffer, (I support other things, like raising the EITC, wage subsidies, things along that sort) but because I believe that its neutral at best, (companies will raise prices in response to higher labor costs, thats why we don't see large jumps in unemployment) or companies will just reduce hours, which reduces total yearly income, and finally, if the minimum wage is high enough, it will destroy jobs.
Greg,
"What do monetary experts have to do with economics Scott? I thought money was a neutral veil? We dont even need money to understand economics according to all of Nick Rowes quaint little stories. Money is just another good. If its just another good why cant homo economicus figure out how to use it since we are so rational and create totally efficient markets?
??????? MONEY IS A NEUTRAL VEIL IN THE LONG RUN.
"The people out there who simply read Keynes as "govt big spending advocate always" just love Scott."
This is slightly true. I like Scott because he favors stimulus in a depressed economy, but on other issues he's a pragmatic libertarian, not part of the nutty Ted Cruz, Rand Paul Ron paul Crowd.
Hey Edward
Delete"MONEY IS A NEUTRAL VEIL IN THE LONG RUN."
NO ITS NOT
The long run is just a succession of short runs. There is nothing neutral about it. That gets repeated as if its a self evident or firmly proven point, which its not.
He may favor stimulus, but he doesnt seem to figure out how to get it from monetary policy, unless the Fed goes fiscal and starts handing out 1000$ bills for bags of dirt.
And Im not so sure about the pragmatic part. Pragmatists dont claim to have figured out once and for all beyond a shadow of a doubt that fiscal policy has no positive affect. He has that belief but he hasnt proven anything. And pragmatists dont scoff at criticisms of policy suggestions (like NGDP futures) by people who do those things for a living! Scotts an ivory tower academic with no real world experience. Everything he's learned was from someone else. His goals are not anything but political
Edward I've tried to believe the best in Scott-I usually haven't been as 'uncharitable' as Greg, However, he totally nails it here:
Delete"Pragmatists dont claim to have figured out once and for all beyond a shadow of a doubt that fiscal policy has no positive affect.'
It's his dogmatism on this point that makes me think that Greg is right about his goals as being nothing but political.
As for money being a neutral veil that's really the dividing line between orthodox-ie, Neoclassical-and heterodox economics.
Even Keynesians like Krugman and Delong believe in long run neutrality. Which really isn't a Keynesian position to take as Keynes himself didn't believe this.
Ok Edward if you achcept the work by Reich and Krueger that the minimum wage doesn't have much effect good enough. If the MW at some level can destroy jobs I don't think we're anywhere near that level yet.
DeleteThe MW in 1969 adjusted for inflation is about $16-this was when it used to be adjusted for inflation and productivity growth
Uncharitable is a very nice way of putting it Mike, thanks.
DeleteI dont have to hide my contempt for Scott. I am in no real negotiation with him. If I was in the position of other bloggers who are of his profession, like Krugman or even Cullen Roche, I would be less openly disdainful as my position might be weakened by sounding so harsh but thats not a problem for me. Scott has no time for my comments anyway. If I post the occasional comment that might change the heart of some reader that is all I can hope for. My audience isnt Scott or Krugman but the people who might read the comment section. We need a popular revolt of sorts. People need to start seeing the econ profession for what it is in many cases..... out of touch with reality and wed to absolutely unproven assumptions about money and finance. That includes ones I mostly like.... like Krugman.
The sooner people start to realize that monetary policy as envisioned by Sumner and co is TOTALLY undemocratic and designed only to give a few bankers total control the sooner they will accept the warts of fiscal policy. Yes, democracy is messy but autocracy too tidy for most Americans taste, in my view.
Yes, it's true that Krugman, Delong, et. al are still wed to the Neoclassical straitjacket.
DeleteSumner takes the elitism of economists to an almost unparrelled and obnoxious extreme. I can't think of anyone who more blatantly embraces this image. Basically if you don't agree with him then he scorns you as one of the unenlightened mases.
My attempts to be more charitable are as much as I really do like to get to the bottom of ideas and want to give him every chance to make his point. He clearly is unwilling to speak with good faith about a number of things.
In some ways Greg I'm not so sure that Krugman has a much higher opinion of Sumner than you have-he expresses this by simply not engaging Sumner at all for the most part.
DeleteSo the idea of long run neutrality is an example of what I've called the sociology of economists. It's an idea that if you don't believe you don't even get inside the club. Like Sumner isn't even going to debate LRN as he thinks it's the best established thing in the world-but the question begs why exactly?
ReplyDeleteI really dont get the notion that a higher MW can destroy jobs, except at the margin.
ReplyDeletePeople hire the number of people they need to satisfy the number of orders they have for their product or service. If they are hiring more than that out of niceness or whatever then they arent behaving as economists say they should. Employers will push their current employees as far as they can for output at the current wage and when pressure rises they either raise their wage and expect more or hire more people...... period. Those are the only options unless you find a robot to do their job. Employers have few options when faced when needing to increase labor costs by hiring more people or raising the wages of current workers. The increase is either already paid for by the increase in future output form more demand for their services or it will come from price increases or out of THEIR OWN profit. Their is no other place.
We've been living through an era where every owner tries to bare bones his labor costs as a means to preserve profits. There is an end point to that. Either we say no we wont (or CANT) work any more for any less, he raises his prices, or he opens his wallet and takes less for himself.
That's a good point Greg. If an owner has 5 employees based on the number of orders he needs to fill and then the MW goes up a buck is he going to let someone go because of the extra dollar? Then he will be able to produce less output and satisfy less consumer demand.
ReplyDeleteWhat's more over time it's been argued that a rising MW is an important prequisite to lowering poverty.
Look at a simple two business economy. I have a business that sells the food to the workers of mine and the neighboring home maintenance business. When he decides to cut his workers wages, my customers have less to spend. They now have a decision to make, spend less on my production to maintain their level of saving or save less and keep level of spending the same on my product. They can only go so far before it cuts into my business and then I lay people off or cut wages which will then affect his business as they have same decision to make.
Delete