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http://www.guardian.co.uk/commentisfree/2013/apr/18/rogoff-reinhart-deficit-research-false
Kenneth Rogoff and Carmen Reinhart
In economics, there are no heroes. Let's repeat that: there are no heroes.
We want heroes. We want to be told what is right by philosopher-data-kings, poring over numbers that will point us toward the right policies and ways of thinking. When we want to address inequality – like raising the minimum wage or paying women an equal amount, or giving immigrants a chance to contribute to society, or paying CEOs less – economics helps bolster those arguments. To a certain extent, the numbers created by the magi of the economy have been our beacons through the recession and the slow recovery. We look to the wise men (and women, but mostly men) who will lead us out of the wilderness, their white robes printed with numbers: GDP, unemployment, inflation. These numbers are our mile markers: how much is life improving for people? Can they afford food? How much further does the economy have to go to recovery?
We are, largely, fools when we do this. Economics is an inexact science, as any honest economist will tell you. It is based on unreliable numbers that measure relatively small swaths of the population. Whatever the number – unemployment, inflation, wages – it is almost always wrong the first time the government publishes them, and then it is revised later: once, twice, three times or more. The errors are usually large.
This is an important realization because of what happened this week. Many Americans know that Washington lawmakers have been engaged in a two-year battle to the death over the federal deficit. Some, like Congressman Paul Ryan, say that the debt that America owes will destroy the economy in the future. Others, mostly Democrats, say it is foolish to cut government debt – and thus government spending – because Americans need the wages and support that come from Washington, at least until things get better.
***more like con artists -- yet their 'bad math' will attract PLENTY of defenders -- even though it's a lie.
Kenneth Rogoff and Carmen Reinhart
In economics, there are no heroes. Let's repeat that: there are no heroes.
We want heroes. We want to be told what is right by philosopher-data-kings, poring over numbers that will point us toward the right policies and ways of thinking. When we want to address inequality – like raising the minimum wage or paying women an equal amount, or giving immigrants a chance to contribute to society, or paying CEOs less – economics helps bolster those arguments. To a certain extent, the numbers created by the magi of the economy have been our beacons through the recession and the slow recovery. We look to the wise men (and women, but mostly men) who will lead us out of the wilderness, their white robes printed with numbers: GDP, unemployment, inflation. These numbers are our mile markers: how much is life improving for people? Can they afford food? How much further does the economy have to go to recovery?
We are, largely, fools when we do this. Economics is an inexact science, as any honest economist will tell you. It is based on unreliable numbers that measure relatively small swaths of the population. Whatever the number – unemployment, inflation, wages – it is almost always wrong the first time the government publishes them, and then it is revised later: once, twice, three times or more. The errors are usually large.
This is an important realization because of what happened this week. Many Americans know that Washington lawmakers have been engaged in a two-year battle to the death over the federal deficit. Some, like Congressman Paul Ryan, say that the debt that America owes will destroy the economy in the future. Others, mostly Democrats, say it is foolish to cut government debt – and thus government spending – because Americans need the wages and support that come from Washington, at least until things get better.
***more like con artists -- yet their 'bad math' will attract PLENTY of defenders -- even though it's a lie.
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