Thursday, January 14, 2010

Rowley Versus DeLong On The State Of Macro

This is one of those naughty little contretemps I just cannot resist reporting on. So, Charles Rowley of George Mason has been posting "on the State of Macroeconomics" in the past few days. One post was not too unreasonable, slamming the longstanding assumption in favor of rational expectations, evidence. The third of these, which can be linked through, (new name for The Austrian Economists) is a much less admirable and defensible affair, although he made a better case for himself in some of his comments. It is basically a weak anti-Keynesian screed that includes the following quotation: "The Keynesian model never worked; and never will work. It has been resuscitated by opportunistic economists, not because they believe in its merits as an agent of macroeconomic rehabilitation, but because they recognize its political value as a weapon for moving economics from laissez-faire capitalism, or (hopefull) beyond to fully-fledged socialism."

Now there is much to criticize in those remarks alone, along with the rest of the post. However, Brad DeLong proceeded to make a complete fool of himself by jumping in on this with the following comment: "Why do you lie about what I think?" Rowley then very reasonably pointed out that he named no names in his mostly egregious post, but this triggered DeLong to call him a "coward." When Peter Boettke reposted and linked this on Coordination Problem, Brad jumped in there also to accuse Boettke of lying. This is a pathetic decline for Brad, who has long had a record of excessively deleting comments (and I think most of what he posts is very intelligent). Really too bad.

Rowley's further explanation, which made some sense, although it was not in his original post, was that he was annoyed with economists who had been labeling themselves "New Keynesians," which models do generally assume some ratex, but who were now advocating old-fashioned "hydraulic Keynesianism" in the current situation. He said that there were many such who had this inconsistency problem, not just Brad, although he said he had no problem with genuine "old Keynesians" who had never lost their faith, mentioning Robert Solow in particular by name. Whoosh!


Sandwichman said...

DeLong: "Why do you lie about what I think? ("Coward.")"

In all fairness to Brad, Rowley did clearly and sweepingly impugn the motives and integrity of "Keynesian economists." And, when DeLong confronted him, Rowley weaseled out of his generalization by stating, on the one hand, that he never named anyone specifically and, on the other, that he had some exceptions in mind, even though he didn't specify them either.

I see nothing "polite" or respectful in smearing whole classes of people by innuendo, insinuation and stereotype rather than directly confronting individuals with whom one disagrees. What if Keynesian economists actually were unprincipled opportunists yearning for socialism? In that case, it would be necessary to name one or two respondents as a preliminary to the presentation of evidence.

On that vein, I'm reading a book in which the authors, Pierre Cahuc and Andre Zylberberg, slickly segue from the Aubry laws to the Holocaust in two slippery, slimy steps:

"The idea that any country's economy, and a fortiori the world economy, contains a fixed number of jobs or hours of work that can be parceled out in different ways is false [well, the idea of "a fixed number of jobs or hours" is indeed false, but it doesn't follow that the idea that "work can be parceled out in different ways" is also or thereby false]. When used to justify policies that reduce the length of the individual work week, it may lead to unintended consequences [note how C & Z's emphasis has subtly shifted from the "fixed amount" to the "parceled out." As for the "unintended consequences," is there a policy proposal that is guaranteed not to potentially have 'em?]. It is, moreover, harmful when used to justify the withdrawal of mothers with children from the working population (thanks, for example, to parental education allowances). It can even be dangerous, as when it leads to the notion that getting rid of 'superfluous' manpower (the Jews of Nazi Germany in the past, immigrants from many countries in the present)..."

The French edition of Cahuc and Zylberberg's book, The Natural Survival of Work: Job Creation and Destruction in a Growing Economy won the European Economics Book Award in 2004. I've read four reviews of it, none of which took exception to or even seemed to notice the authors' atrocious innuendo-by-association legerdemain.

Suffern AC said...

Not the greatest moment in the history of economic debate. I wish the rest of the post could have been demolished, as I thought the worst transgressions were not the cat fight about the secret motives of today's Keynesians, I don't know. I thought there was quite a bit of misinformation and assertions about the economy that was presented in the form of the story that Austrians love to hear, presented as a critique of a supposed science.

I mean, on the one hand he warns against the dark age of macro, but on the other hand he looks forward to the "empirical test" of elections that will disprove Keynesian economic theory. What other science uses public opinion in two year increments to test its validity?

Eugene Fama says Paul Krugman secretly wants to rule the world and Larry Summers can only get government work. Brad Delong says Eugene Fama et al are the stupidest people alive. Economists think they have the clairvoyant powers that bad reporters claim to have. Who are you people?

Walker: I'm guessing that child labor restrictions and genocide are only juxtaposed as employment policy alternatives in the field of economics. Again, who are you people?

Barkley Rosser said...

In case it was not clear, I largely side with DeLong on the substantive issue, although I think that Rowley does score a point about the bizarre positions of (former?) "New Keynesians." Indeed, the recent piece by James Galbraith (that briefly mentioned me) pointed out the oddity of an earlier posting by Krugman that was supposedly a critique of how recent macro approaches had failed to analyze things, but then blathered on and on about "freshwater versus saltwater" and never named any of the economists who supposedly did analyze things well ahead of time (which Galbraith attempted to do), and I would note that the set who analyzed well ahead of time did not include DeLong.

r l love said...


I read the Galbraith article that you mentioned and was surprised that M. Hudson was not included. I read somewhere that Hudson had the best prediction of all?

~ray l

TheTrucker said...


You will _NEVER_ _EVER_ see anyone that was seen in the _vacinity_ of M. Hudson given even a "nod" by the prancing members of the economic "nobility".

I think this is most certainly true of Keynesian macro people. Seems to me that the Keynesians reject him for his emphasis on fiscal as opposed to monetary policy and the Austrians reject him because he is _right_ about his positions on fiscal policy and resource allocation. Who else would advise the Russians to do as Chavez has done -- to generate most of the public funds from natural resource rents.