Tuesday, 2 November 2010

Maybe the Truest Thing an Economist Ever Said Was Keyne's "In the Long Run We Are All Dead."

Thought for election day in the US, from a column in Friday's Globe and Mail by Gerald Caplan:

"You might say that an ordinary economist is someone who guesses wrong about
the economy while an econometrician uses computers to guess wrong about the
economy. A comparable dynamic distinguishes micro- and macro-economists. The
first are wrong about specific things, the second about everything."

Credit goes to Lee (formerly in the employ of McGill University as an economist) for passing this along. He also points out that Paul Krugman's column in the NYT Monday offers some good sense where many economists, idealogues (including, surprisingly, Margaret Atwood) and politicians in the US and Canada have been hell bent for leather in condemning what really might work: stimulus.


lagatta à montréal said...

I'm surprised at Margaret Atwood. Not surprised that the sentence that launched the phony populist Tea Party movement is a model of bad English grammar and syntax.

The role not only debt but wild speculation played in the slump is no reason not to stimulate the bricks-and-mortar economy. Though of course I want trams and trains stimulated, not private cars, and car workers' jobs reconverted to sustainable transport.

Beyond that, most of the stimulus money seemed to be going into "male" jobs - while I sure want younger women training for non-traditional sectors, no way I'm going to go into such trades at my age. Arts and social fields are important to stimulate too.

Mary Soderstrom said...

Almost all of Margaret Atwood's Massey lectures two years ago was about how bad debt was. Nowhere does she nuance the idea, to my knowledge.

But sometimes, as Krugman and Keynes insist, debt is absolutely necessary. Call it investment, if you like.

As for the maleness of stimulus jobs, that's true. Buildings are a lot easier to get started quickly in a stimular package than the networks necessary for cultural tours etc. But remember that the WPA in the US, was a stimulus program begun after the mid-term elections in FDR's first term. Maybe there's some hope still.

lagatta à montréal said...

Yes, Atwood's opposition to debt did seem more moral than anything else.

Wikipedia has a good short overview of the WPA, with links and references: http://en.wikipedia.org/wiki/Works_Progress_Administration

Progressive Blogger pogge provides another example of the naysayers: http://www.pogge.ca/archives/003052.shtml#more

Chamber of Commerce types are shooting themselves in the foot with that attitude - actually building social housing would stimulate local builders and contractors, and also mean households of modest means have some income to spend at local businesses.

I confess I was hoping Joe Biden's rapid rail schemes would become reality ... yep, another disappointment. I really wanted that fast train to Boston, and a faster link to NYC!

Martin Langeland said...

Curious that those without need are always the first to warn against whatever mechanism affords them their superior position. Bankers warn against debt. Generals decry war. Parsons fulminate against sin. The rule seems to be: If I don't need to do it, You shouldn't either.
Too many of us suffer from a failure of empathy.