Thursday, May 13, 2004

Economic Dishonesty

It may not be fair, but presidents get credit for good economies and blame for bad ones, even if they’re not responsible. This is the political equivalent of strict liability in the law. Suppose your goal is to defeat a president. Knowing that we have a strict-liability system, you will do everything you can to make the economy seem bad. This turns out to be remarkably easy to do, especially for the unscrupulous. First, there are many economic indicators: inflation, unemployment, interest rates, budget deficits, trade deficits, &c. Pick the one that’s doing least well. Harp on it. Make it seem the most important indicator. Ignore or downgrade the others. Second, no indicator is ever perfect. We have never had, and never will have, zero unemployment, for example. So you can always plausibly say that things could be better, the implication being that, without the current president, things would be better. Third, there are different methods of measuring things like unemployment and different interpretations of raw unemployment data. You can pick the measurement or interpretation that serves your purposes. If you’ve been reading Paul Krugman’s New York Times columns, as I have, you know that he plays this dishonest game. His objective, which is transparent, is to defeat President Bush. Nothing else matters, not even intellectual honesty. He harps on the worst-performing economic indicators; he emphasizes how far things are from perfection rather than how much worse things could be (in other words, he’s maximally pessimistic); and he cherry-picks his data sources and interpretations. Economics is politics masquerading as science. Paul Krugman trades on public respect for scientists, but he’s as ruthless a political operative as I’ve seen. Don’t trust him. If you read his columns at all, go immediately thereafter to Donald Luskin’s site (see here) for the necessary corrective. David Kelley on Libertarianism The words “liberty” and “liberalism” have a common root, reflecting the commitment of the original or classical liberals to a free society. Over the last century, the latter term has come to represent a political position that is willing to sacrifice liberty in the economic realm for the sake of equality and/or collective welfare. As a consequence, those who wish to reaffirm the classical version of liberalism--those who advocate liberty in economic as well as personal and intellectual matters--have invented a new word from the old root; they call themselves libertarians. Both in doctrine and in etymology, then, partisans of this view define themselves by their allegiance to liberty. Yet they spend most of their day-to-day polemical energies defending property rights and the economic system of laissez-faire capitalism that is based upon such rights. Evidently there is a strong link between liberty and property at work here. (David Kelley, “Life, Liberty, and Property,” in Human Rights, ed. Ellen Frankel Paul, Jeffrey Paul, and Fred D. Miller, Jr. [Oxford: Basil Blackwell, 1986 (1984)], 108-18, at 108)

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