Wednesday, August 19, 2009

Posner’s Attack on Romer

With hat tip to Mark Thoma, let me cite a couple of lines from Richard Posner. First:

Romer answers the question in her title: "Absolutely." And despite the reference to "five months" in the subtitle, her focus is on the second quarter of 2009 (April, May, and June) and her claim is that the stimulus had a dramatic effect on output and employment during that quarter. I do not think her analysis is responsible, and I am concerned with the fact that academic economists, when they become either public officials or public intellectuals (like Paul Krugman), leave behind their academic scruples.

Did he even read Romer’s analysis before attaching her? Yes, the stimulus kept output from falling even further. In fact, check this out from Posner:

Let me make clear at the outset that I support the stimulus, though I wish it had been better designed. I support it for two reasons. The first is that, given the state of panic of the economy last winter, and the limited efficacy of the measures already taken to arrest the economic plunge

That’s right boys and girls – Posner recognizes that the economy was in a free fall. But it appears (just maybe) that the free fall has stopped. Isn’t that what Dr. Romer said? So how is this intellectually dishonest?

Update: Brad DeLong has a number of suggestions for Mr. Posner including actually reading what Dr. Romer wrote on this topic.


Anonymous said...

"Posner recognizes that the economy was in a free fall. But it appears (just maybe) that the free fall has stopped."

And, you base this view on what evidence?

In what other period of American history could 500+K jobless queue for unemployment claims and it not be considered free fall?

Is this not a case of carrying the impression of the most recent experience?

Jack said...

It appears that the Atlantic has become a home so to speak to writers with a particular point of view and that their point of is not always supported by any strong evidence. Megan McArdle is often cited on AB as such a contributor and here we have Richard Posner adding his expertise to a conversation.

What isn't generally noted is the recent genealogy of the Atlantic and its related publications the National Journal and Government Executive. In the interest of more adequate disclosure I think it of value to know the lineage of these publications in their current iteration. David G. Bradley is the owner and publisher of the National Journal Group Inc,
the umbrella for the three journals. All of the resources for these publications originates with two consulting firms which Mr. Bradley founded and grew to substantial wealth. They are the Advisory Board Company and the Corporate Executive Board. The first specializes in consulting for the health care and pharmaceutical industries. The second for the financial services industry. The two firms were initially one and were divided approximately ten years ago, following which they were brought public earning Mr. Bradley well over $200 million dollars.

I have not been able to determine if Mr. Bradley retains a financial interest in either of these two firms, but they were his life for about 25 years and the source of his ability to fund the publications which now present themselves as journals of news analysis. It seems off that so often their contributors seem to be presenting a corporate point of view more often than not. At very least it would seem appropriate for these publications to note the origins of the publisher's wealth and business connections on their mast heads. The bias within would then be understandable.

Jack said...

Sorry, but the sentence in the last paragraph should read, "It seems odd...." rather than "off".