Sunday, September 25, 2016

The Curious Confidence of Charlatans and Cranks by Paul Krugman

 
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Brad DeLong tells us about a letter being circulated by economists for Trump — although, as he notes, they don’t dare say that, and describe themselves only as critics of Clinton. Several things are notable about the letter, including the absence of many usually reliable Republican hired guns economists. But they do have a Nobelist, Eugene Fama, at the top. And the substance of the letter — government bad! taxes and regulation bad! free markets rool like Reagan! — is pretty standard.
What’s curious is why, exactly, anyone should believe this story. In recent memory, GW Bush failed to deliver the promised Bush boom and eventually presided over disaster; the Obama economy has not been all one might have hoped, but as many have noted, the job growth of the past three years and the income growth that has finally emerged would have been hailed as triumphs if Mitt Romney were president. Taking the longer view, Clinton > Reagan and Obama > Bush, by almost any measure. Why doesn’t this reality seem to register?
One big answer, I think, lies in profound ignorance, in the insistence that history is what it was supposed to be, not what it was. Way back Mr. Fama was caught insisting that there was a great takeoff of global growth after 1980 due to financial deregulation. In fact, growth in advanced countries has been slower since 1980 than it was before, and it’s really, really hard to attribute Chinese growth under Deng Xiaoping to U.S. banking deregulation. But this is the right: legends that support the cause trump awkward facts.
And let’s be clear: this is a problem that won’t go away even if Trump goes down to defeat. People like Paul Ryan are barely more in touch with reality than @ilduce2016.
NYT

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