Tonight, Gaius Publius will be on Virtually Speaking with Jay Ackroyd.
Cliff Schecter and David Waldman (KagroX) were the panelists on last week's Virtually Speaking Sundays, and discussed the pushback against the NRA, the amazing sleaze and cowardice of the Senate, and the interesting reaction to the "study" that supposedly underpinned the "need" for austerity.
And I think I missed this one earlier though I meant to post last week's appearance of Daniel Marans of Social Security Works on Virtually Speaking with Jay Ackroyd.
Lots of people all over the world celebrated May day.
The administration floats stuff, people scream, they publicly back off - and then they do it anyway. "Report: Obama Officials Authorized New ‘Cybersecurity' Warrantless Surveillance Program, Fresh Immunity Given to ISPs."
"To keep the lights on, Oslo needs to import trash from the U.S.: Did you know that the city of Oslo is powered by garbage? Amazing and true. The Norwegian capital, home to about 650,000 residents, operates two enormous incinerators which supply the city with about 1.5 terawatt-hours of power." I've always wondered why nobody did this, and now it turns out that somebody is, but we're not hearing about it. I know why we're not hearing about it, of course - the energy industry we have is dependant on our not pursuing alternatives. That's why they work so hard to kill renewable projects like solar power. In fact, they recently released their own report (quietly - and the press didn't seem to notice) saying that they expect to be put out of business by renewables: "Just the other day, Duke Energy CEO Jim Rogers said, 'If the cost of solar panels keeps coming down, installation costs come down and if they combine solar with battery technology and a power management system, then we have someone just using [the grid] for backup.' What happens if a whole bunch of customers start generating their own power and using the grid merely as backup? The EEI report warns of 'irreparable damages to revenues and growth prospects' of utilities."
Bankers Explain How They Cannot Possibly Live On $1 Million Pay
John Kerry finally demands a hand re-count - in Venezuela. It's amazing how many people in the media and in government have suddenly discovered the importance of 100% hand counts of ballots. Long-time readers of The Sideshow will remember that we have always believed in hand-counts, for very good reasons, but that the press and party leadership somehow didn't feel this was important. Except in some other country that isn't doing what they want, of course.
Even in Politico, it's "Democrats ask: What debt crisis?"
"UK.Gov passes Instagram Act: All your pics belong to everyone now: Everyone = Silicon Valley ad platforms tech companies." It's really getting to the point where the individuals who create have no copyright - that copyright belongs to corporations, not creators.
Jeremy Scahill on Democracy NOW! about dirty wars and drones.
"Fix the Debt" CEOs Enjoy Taxpayer-Subsidized Pay.
Before there was the Interwebs, we had Science Fiction fanzines, like this one, which Norman Spinrad brought to our attention because he says it contains a good interview with him. It's a .pdf of what looks to be a mimeographed zine. Most of us didn't bother to break text up into three columns, though.
Bowie exhibit, "A Dame of Thrones".
Unnamed sources have told The Wall Street Journal that President Barack Obama is poised to nominate Tom Wheeler, a venture capitalist and “former top lobbyist for the cable and wireless industries” to serve as chairman of the FCC.
ReplyDeleteI'm shocked.
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Whoops, link disappeared somehow.
Deletehttp://bgr.com/2013/04/30/fcc-chairman-nominee-tom-wheeler/
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Politico actually wrote:
ReplyDelete"A trio of scholars at the University of Massachusetts Amherst poked major holes in one of the foundational documents of the austerity movement, the 2010 paper Growth in a Time of Debt by Harvard economists Carmen Reinhart and Kenneth Rogoff."
Ah, no, the U of M "scholars" completely trashed the paper, and then wiped their arses with it. Nice try, Politico.
It isn't that simple, dpjbro. This is where the debate is at this point:
ReplyDeleteIn the end, all the corrections advocated by the critics shift the average GDP growth for very-high-debt nations to 2.2 percent, from a negative 0.1 percent in Reinhart and Rogoff’s original work. The finding remains that economic growth is lower in very-high-debt countries (see chart).
In fact, it's just common sense that growth is lower the more debt there is. If you have debt, you have to pay interest, the interest has to come from taxes and it isn't being used for productive investment through government (like, say, educating kids, research, building roads and bridges, or just keeping people alive during unemployment).
So, the real debate is different than it's made out to be. The real debate should be: we know debt is bad, but sometimes not spending money is worse. So should we be spending money to stimulate the economy now?
I think the answer is yes. But I also think that people on the left should never get caught saying, as Cheney did, that "deficits don't matter." They do, and they're a way to trap nations into debt slavery. If we run deficits, we should be very careful what we're spending the money on.
In fact, probably a more important point should be, why are Reinhart and Rogoff focused on government debt, whereas private debt is what drives consumer and business investment decisions? If consumers don't have money to spend, they won't spend it, so businesses won't invest.
If you think Reinhart and Rogoff have been wiped, you're wrong. It will take a lot of effort by people who really understand the issues to re-shape thinking on this matter.
But their entire result is meaningless since they cherry-picked which countries they used in their data and how they weighted them according to no useful criteria except to buttress their own foregone conclusion. This doesn't even qualify as "researcher bias", where the researchers unconsciously do things that bias the result. This is what most researchers would, I think, call fraud.
ReplyDeleteFraud was my first instinct, too, Avedon. Omitting data is a serious sin. But, as I say, it's more complicated than that. As Paul Krugman says,
DeleteThe fact is that Carmen and Ken are fine economists. Carmen has been doing terrific empirical work on banking crises for a long time. Ken is arguably the world’s leading international macroeconomic theorist. In fact, the main reason I knew that the case for fiscal policy remained strong even in the context of New Keynesian models was that I carefully read the canonical text by Obstfeld and Rogoff.
So what happened here? My interpretation is that after writing a very good book, R-R dashed off a careless paper on debt and growth that was so much what the VSPs wanted to hear that it made them instant celebrities in a way they hadn’t been before — and they didn’t know how to say stop the merry-go-round, we want to think about this a bit harder. The temptation involved was one of fame and becoming a part of the alleged real world, not some crude mercenary consideration.
Reinhart and Rogoff's response was exactly wrong. It was arrogant and defensive, when they should have apologized immediately. There should be an investigation to see how the errors crept into their work. But Krugman's view should be taken seriously. Bias crept into their work because the political system is a black hole distorting everything we see.
"...R-R dashed off a careless paper on debt and growth that was so much what the VSPs wanted to hear..." and funded by Pete Peterson. I think they knew exactly what they were supposed to "find".
ReplyDeleteKrugman specifically disassociates Reinhart and Rogoff from Pete Peterson.
DeleteYou're welcome to see it as a seamless conspiracy (not meant disparagingly; there are plenty of well-established conspiracies) with right-wing figures like Peterson directing a propaganda apparatus that includes Harvard professors. But Krugman at least feels that it's more a problem of the corporate media and the political apparatus picking up what they wanted to hear, and Reinhart and Rogoff being flattered by the attention.
Charles, you can't explain the way they cherry-picked their data as mere carelessness.
DeleteOnly an investigation can explain how they went about their analysis, Avedon. None of us are mindreaders, and few of us even understand the details of their research well enough to grasp exactly what happened. I have been through Herndon et al. well enough to know that cherrypicking alone could not have distorted the results as much as it did (see Table 3 here. Assuming that the transcription error was that, it comes down to whether the weighting procedure was appropriate.
DeleteJames Hamilton says this about weighting:
The issue instead is whether the expected GDP growth rate should be regarded as if it is the same number across different countries. A well-known econometric method for dealing with this is referred to as "country fixed effects." In this method, one uses the average for the Greek observations as an estimate of the Greek growth rate and the average of the U.S. observations as an estimate of the U.S. growth rate. This is a widely used procedure. By contrast, the weighting proposed by Herndon, Ash, and Pollin assumes that the expected growth rate is the same across different countries, an approach that is less widely chosen for panel data sets and in my opinion less to be recommended. Given that the ultimate goal in this case is to infer an average effect across different countries, I personally feel that a random-effects approach would be superior to fixed-effects estimation, particularly given the unbalanced nature of the panel (that is, given the fact that we have many more observations on the 90% debt state for some countries than for others). As I noted in my original piece, this would yield an estimate that would be in between those or RR and HAP. But to suggest that there is some deep flaw in the method used by RR or obvious advantage to the alternative favored by HAP is in my opinion quite unjustified.
I think he's right. Is it likely that a highly-developed country will grow as rapidly as a developing country? And then one has to account for things like wars, where growth suddenly changes depending on whether one wins or loses. So if I don't agree with Herndon's weighting procedure, and I don't, then I know that the discrepancy between R&R as it was done and R&R as it should have been done is relatively small.
There's plenty to criticize Reinhart and Rogoff for. At this point, however, there is simply no evidence for fraud... even though, of course, only a proper investigation can rule out fraud.