A disappointing GDP number for the first quarter. Conatractionary policies are contractionary as Atrios likes to say.
But remember that Kenneth Rogoff and Carmen Reinhart are just theoreticians working in an ivory tower, with no influence on policy decisions (via):
Johnny Isakson, a Republican from Georgia and always a gentleman, stood up to ask his question: “Do we need to act this year? Is it better to act quickly?”
“Absolutely,” Rogoff said. “Not acting moves the risk closer,” he explained, because every year of not acting adds another year of debt accumulation. “You have very few levers at this point,” he warned us.
[…]Senator and former governor Mike Johanns, a Republican from Nebraska, asked, “Is there a point at which the debt market rebels?”
“I don’t want to be fire and brimstone,” Rogoff said. “No one knows when this will happen. ” Yet, he added, “It takes more than two years to turn the ship around … Once you’ve waited too long, it’s hard to take radical steps.”
burnspbesq
The Confidence Fairy is a slut, and the Invisible Bond Vigilantes remain invisible for good reason.
Omnes Omnibus
But R&R weren’t austerity advocates….
(Bad music for bad research?)
PeakVT
Adding to the Ren and Stimpy beat down, Baker trashes their op-ed some more.
jeffreyw
Don’t blame kitteh!
Villago Delenda Est
Rogoff, in particular, needs to be put to a slow death.
Twist slowly, slowly in the wind, asshole. You’ve earned it.
Omnes Omnibus
@PeakVT: Jesus, they are just being shredded by every reputable academic economist on the planet.
Villago Delenda Est
@Omnes Omnibus:
That’s now. Ignore all those op-eds where they were austerity advocates. While blatantly ignoring four of the five years of New Zealand that they were so careful to highlight.
Schlemizel
I posted this in the previous thread about these two inflamed assholes but it deserves the widest audience possible
Omnes Omnibus
@Villago Delenda Est: My tongue was well in cheek during my previous comment.
PeakVT
@Schlemizel: Actually, Jagoff and Beerfart did release their spreadsheet of data and calculation methods to Thomas Herdon, the “kid” who knocked them down. That’s how the range error (which is the least important problem in their original paper) was found.
Villago Delenda Est
@PeakVT:
Yes, the fact is, a grad student found an egregious error that does nothing but demonstrate how very clearly the numbers were cooked in order to support the theory.
A classic case of facts being disposed of because they got in the way of the dogma. That has paid off nicely for Bartles and Jaymes, it seems. They’re superstars to Austerians and their Galtian allies.
Mark S.
I was wondering who was responsible for this dogshit writing, and it’s Senator Coburn from Oklahoma!
PeakVT
I’m sure the unemployed in Spain are empathizing deeply with Crockett and Tubbs personal distress over having their reputations attacked. (Unemployment up to 27.2% if you don’t want to click through.)
handsmile
What Stephen Colbert did on Tuesday night to this Siegfried and Roy of economic analysis demonstrated once more why he is a National Living Treasure.
From BusinessInsider: “On National TV last night, the Austerity Movement became a Laughingstock”:
http://www.businessinsider.com/stephen-colbert-on-thomas-herndon-and-reinhart-and-rogoff-2013-4
(i’ve not even been lurking hereabouts for much of this week, so apologies if Colbert’s masterwork has been posted numerous times already)
EconWatcher
The cherrypicking of data seems to present at least a prima facie case of academic fraud. R-R’s contradictory public statements about the implications of their work is additional evidence of possible bad faith. Will Harvard investigate?
schrodinger's cat
OT: I have a question about web hosting services. I need some recommendations. I want cheap, though not necessarily free and responsive.
Thanks.
Bighorn Ordovian Dolomite
@EconWatcher:
Yeah, now that you mention it….
Have any of their academic critics/opponents mentioned this possibility as of yet?
patroclus
For three solid years, Jekyll and Hyde have been inflicted on us time and time again by the austerity advocates; with every conservative austerity budget maven constantly citing them and their supposedly authoritative study. And Tubbs and Crockett have reveled in it; they’ve testified before various committees and have endeavored to popularize themselves all over the world. And, as Colbert and Herndon have demonstrated, it was all built on a lying house of cards – there is no negative growth correlation and no 90% of GDP tipping point whatsoever. It was all a pack of lies.
They have, literally, been responsible for the ruination of peoples’ lives all over the world. They are scum.
eemom
Funny, I was thinking of another Tony Orlando lyric yesterday: “The further from here girl, the better.”
liberal
@EconWatcher:
No.
liberal
@handsmile:
Interesting aside: what’s up with that side (businessinsider)? A lot of the stuff I see there is reasonable or even (GASP!) liberal-leaning.
My impression is that Blodget has something to do with it. THat would be an interesting case of a morally ambiguous character.
Alex S.
Honestly, I expected worse GDP numbers. I thought the sequestration might cause a small recession. Ok, the initial GDP numbers of the previous quarter declined by 0.4% (I think) but they were revised upwards, so the economy never actually contracted. 2,5% are nice, I think. If the Republicans keep undermining the inevitable recovery, they will only delay the peak of the next business cycle, which might happen just in time for the 2016 elections.
Also, I seem to remember that the other big austerity-promoting paper Alesina/Ardagna or something like that, was also written by Harvard professors. The Harvard economics department has been bought. These are not mistakes, these are the wishes of influential donors.
liberal
@PeakVT:
Agreed that Spain is a disaster, but what can they really do given that they’re on the Euro?
What would be very interesting, BTW, would be to go back to the debates about the Euro and see who turned out to be right and who turned out to be wrong. I’m curious about “the left”—my impression is that they (we?) are really big on breaking down national barriers, but the European project, aside from being an economic disaster, seems to bear lots of anti-democratic features.
liberal
@Alex S.:
More or less the entire field has been bought. Look at marginal productivity theory—that people are justly compensated for their contributions to production. What a crock.
gene108
@PeakVT:
Thank goodness we aren’t Europe. The Democrats are relatively pro-stimulus and have managed to get some things passed despite Republican opposition and we still have Prof. Krugman with a readily available platform – though maybe not an actual megaphone like Fox News, et. al. has – to keep us informed as to why austerity sucks balls.
I had trouble sleeping, woke up at 4:30-5:00 am. I flipped on Bloomberg TV (for some back ground noise to fall back asleep) and they had a show on focusing on the European economy at that hour.
The hosts had a guest, who basically said austerity hasn’t had a chance to work to its fullest potential yet and the hosts didn’t do a WTF, you’ve had 4+ years of austerity and life sucks for most people. They just nodded along like what the guy was saying is obvious or at the least had a some truth to it.
One of the real problems we have with the economy is the mess in Europe is a drag on us. I don’t know how much we can recover, without Europe – being a trading partner and all – getting its head out of its ass.
I do hope in 2014, we can take back the House and some state governments to start undoing the damage Republicans have done.
liberal
@Omnes Omnibus:
How is Baker a “reputable academic economist”? He’s a liberal/left economist who gets things more correct than most economists. In particular, he called the housing bubble earlier than almost everyone.
In that sense, he’s not at all “reputable”.
Mandalay
@Schlemizel:
That is absolutely not the case. This issue is raging precisely because they provided their raw data to the grad student.
Villago Delenda Est
@liberal:
This does explain why CEOs who have jack shit to do with the actual production of marketable product that generates revenue are the most highly compensated of all corporate employees.
liberal
@gene108:
Yeah. Man, our elites are bad, but it could be even worse.
Omnes Omnibus
@liberal: My bad. I meant reputable in its dictionary sense not the current Villager usage. I will endeavor to be more clear in the future.
liberal
@Mandalay:
That’s true. What’s not clear to me is how long it took (from the onset of the first such request for data to when they finally gave it to someone).
OTOH, there are a lot of fields were people don’t want to hand out their data, even if they have nothing to hide. Data takes time and money to collect; if you hand it out, there’s a free rider problem.
Of course in this case, it doesn’t look like the data collection required much effort—AFAICT it’s just some very aggregated country-level stats stuff.
catclub
@Alex S.: ” I thought the sequestration might cause a small recession.”
Be patient already, it’s coming.
liberal
@Omnes Omnibus:
Yeah…well, in this case the fault is not with you.
gene108
@liberal:
What got me, when Greece’s debt crisis became news is how unbelievably, impossibly, surprisingly TINY Greece’s economy and debt were.
Greece’s GDP is about $325 billion and even if debt’s 125% of GDP, that’s $406.25 billion.
We friggin’ threw $800 billion at our banks in TARP and our DOD budget is about $700 billion a year.
Why not just buy Greece’s debt, forgive it and get on with business?
Then I read a bit about all the CDO’s and other derivatives taken out by Eurobanks on the sovereign debt and realized it wasn’t about Greece not being able to pay off its debts, but the banks not having the money to pay off their derivatives and/or not having the assets to stay solvent, if they had to write down the value of their derivatives, if Greece either defaulted or was forgiven for their debt.
The Europeans really need to get the pitchforks and torches out and demolish a few banks to send a message and I do mean literally. You aren’t going to be able to get at the IT infrastructure that manages most transactions, but an angry mob demolishing a large bank building will send a message.
liberal
@Villago Delenda Est:
There’s actually research by other economist scum that tries to rationalize the explosion CEO pay by claiming that the firms they manage are more complex than ever, and the highest-paid ones are working for more complicated firms.
With economists, the whoring never seems to stop. For many of them, anyway.
liberal
@gene108:
Damn straight.
You might have seen a related Krugman column a couple weeks ago, where he said, basically, “OK, yes, usually I don’t give flat out upfront, unvarnished advice, but I will this time. Re Cyprus? Get off the Euro. Now.”
liberal
@gene108:
Be careful advocating violence, even if it’s just against property. Someone is bound to get the vapors.
Mandalay
WaPo cranks up the lunacy a notch:
WTF??? Even if Reinhart and Rogoff had not asserted that 90% was a magic number, then others would have made that claim anyway?
Presumably it would be intuitive and obvious to someone as gifted as Ryan.
Schlemizel
@PeakVT:
In the interview I read with him he said that at first they refused & only after he came to them with his results did they agree to release the data to him. Thats when he found the XL issue
Schlemizel
@Mandalay:
Not according to him. He says they refused and it was not until he had gone to the trouble of recreating the data & presenting it to them (Because he assume he had made a mistake) did they provide anything to him
I am looking for the interview but don’t remember the site I read it on
El Cid
Fucking asshole elitist shitbags who don’t give a fuck how much their contribution to the public discourse may or may not impact the lives of all these poor shits they don’t give a fuck about.
PeakVT
@Schlemizel: Okay, the initial refusal is news to me. If you can find the link that would be great.
Th real problem, however, is that Rogaine and Bravehart’s data and methods weren’t released from the beginning.
patroclus
@PeakVT: Yeah, “peer review” is an important part of social science research. But there are numerous problems in addition to that: (1) ignoring Australia, Canada and New Zealand; (2) the blatant speadsheet encoding error, which is, according to Herndon, easy to spot: and (3) going all over the world and, without caveats, asserting their ridiculous conclusions have some basis in fact. Rogers and Hammerstein are the laughingstocks of the entire economics profession and they have directly caused untold hardships on real people. They are utter scum.
patroclus
@Schlemizel: It was on Colbert – Herndon specifically said that.
Mandalay
@Schlemizel:
I think you are misinformed…..
The core issue is that the grad student was unable to independently replicate the results in the paper, and the errors in the paper came to light precisely because Reinhart and Rogoff provided their raw data to the grad student…
I can’t find any reference to Rogoff and Reinhart refusing to provide the data, and the above link explicitly states that they did. The central point is that the grad student found issues with the way they were using/ignoring their raw data in their paper.
Tonal Crow
@jeffreyw: Mew!
El Cid
@Mandalay: If they’d given a shit about the intellectual importance of their subject matter, they’d have published it initially, not wait around until the Scooby Doo Mystery Van pulled up and innocently asked if maybe they could take a look.
Mike G
Fucking spreadsheets, how do they work?
Where were these pair of clowns a decade ago — manufacturing “Saddam’s nookyuler weapons” evidence for Bush?
Just Some Fuckhead
Thank God these asshats are in academia. If they’d have done that sloppy shit in business, they woulda been fired. Or bailed out if they worked for the Masters of the Universe.
PeakVT
@Mike G: I think at the time they were both at the IMF, which, unlike the Bush administration, is willing to destroy countries around the world.
El Caganer
Dead fucking wrong in their conclusion (with some possible intentional fraud thrown in), and they take to NYT to complain how everybody is being mean and uncivil and unacademic. They’re….Beavis and Butthurt!
EconWatcher
@PeakVT:
The IMF admitted it was wrong about austerity, long before the errors in R-R’s paper were discovered. They made their admission based on the obvious facts on the ground in Europe: The countries adopting austerity had not benefited with the help of the confidence fairies, but had instead sunk into deep recession and misery, just as K-thug and others said they would.
It’s kind of tough to say “oopsie” after something like that, with all the human damage caused. But the IMF did so, and you have to credit that, at least. In fact, the IMF is now trying to pressure the British government against austerity–a complete about-face.
R-R are in a different spot because there is a very strong whiff of intentional skewing of the data in their paper. They can’t say “oopsie.”
This is now a test of the institutional integrity of Harvard. If they just walk on by without even investigating (as they probably will), it will show they have no real commitment to academic honesty.
TG Chicago
I’ve been arguing about this with an economist friend of mine. I think I finally got him.
I granted that RR’s paper only found a correlation between high debt and low growth (which still exists even when you correct the errors). But RR’s subsequent policy prescriptions only make sense if they’re assuming that the high debt caused the low growth — something that their paper never even claims to prove.
The funny thing is — look at the past few years. We’ve seen a bad economy and we’ve seen a ballooning of debt. But it’s abundantly clear which was the cart and which was the horse: the economy tanked, that caused tax receipts to plummet, and that caused the debt to jump. High debt didn’t cause the crash of 2008; the crash of 2008 caused a big increase in debt.
Sometimes you don’t need a weatherman to know which way the wind blows.
PeakVT
@EconWatcher: The IMF didn’t admit its errors “a long time” before Starsky and Hutch were blown from the water. It was only last year. And as far as I know they haven’t admitted to anything about the previous 2 or 3 decades of destruction in non-european countries.
Joel
I’m surprised that “Tango & Cash” hasn’t come up in these discussions.
1) That movie bombed/sucked
2) It has the word “Cash” in the pairing, which seems apt
Schlemizel
@PeakVT:
I could not find the interview but here is a story claiming the same thing
http://nymag.com/daily/intelligencer/2013/04/grad-student-who-shook-global-austerity-movement.html
It goes on to detail what he did and that gives a clear indication they had not shared any data with him.
It has also been widely reported that their work was not peer reviewed
PeakVT
@Schlemizel: Okay, thanks. I wonder what made Mork & Mindy finally crack and agree to release the data. I bet they’re kicking themselves for that!
I also like this:
“I don’t want to sound the alarm and call for anyone’s jobs,” [Herdon] says. “I didn’t do this to be punitive or malicious.”
That’s okay, kid. We’ll take it from here.
Enhanced Voting Techniques
@liberal:
Remember “no one could have possibly seen it coming”? That means Baker isn’t really an economist (at lest the right kind of one) since he saw it coming.
Juju
@Joel: I’ve been trying to think of more pairings that would work for R&R. I’ve come up with: Sonny & Cher,Cagney & Lacey, rum & coke, dog & pony, t!ts &@ss, pizza & beer,and apples & oranges.