Let’s clean up the blogosphere (and the atmosphere too)
It has come to my attention that the standards of intellectual discourse have been slipping. Fortunately, Paul Krugman has provided us with a set of ethical standards for blogging in a recent series of posts on global warming. In the first post he takes Levitt and Dubner to task for their counterintuitiveness on an important issue:
At first glance, though, what it looks like is that Levitt and Dubner have fallen into the trap of counterintuitiveness. For a long time, there’s been an accepted way for commentators on politics and to some extent economics to distinguish themselves: by shocking the bourgeoisie, in ways that of course aren’t really dangerous. Ann Coulter is making sense! Bush is good for the environment! You get the idea.
Clever snark like this can get you a long way in career terms “” but the trick is knowing when to stop. It’s one thing to do this on relatively inconsequential media or cultural issues. But if you’re going to get into issues that are both important and the subject of serious study, like the fate of the planet, you’d better be very careful not to stray over the line between being counterintuitive and being just plain, unforgivably wrong.
I could not agree more. It certainly helped the career of the snarky John Maynard Keynes. He continually shocked the bourgeoisie with counterinituitive assertions that saving was actually harmful and that we’d all be better off if we buried bottles full of money and paid workers to dig them up.
In the next post Krugman criticizes Levitt and Dubner for misrepresenting the views of other scholars:
OK, I’m working my way through the climate chapter “” and the first five pages, by themselves, are enough to discredit the whole thing. Why? Because they grossly misrepresent other peoples’ research, in both climate science and economics.
And the final one-two punch is delivered in a third post on the topic:
I suspect, though I don’t know this, that the authors were just careless “” they skimmed Weitzman’s paper, which is densely written, saw a number they liked, and didn’t ask what the number meant.
. . .
And that’s not acceptable. This is a serious issue. We’re not talking about the ethics of sumo wrestling here; we’re talking, quite possibly, about the fate of civilization. It’s not a place to play snarky, contrarian games.
Given all the gross charicature and misrepresentation of the views of my beloved Chicago school, as Cochrane and Levine exposed in two recent essays, it’s good to have a Nobel Prize winner speaking out forcefully on the need for higher standards.
So to summarize, we need to actually read what people write, not just skim. We must not misrepresent the views of others. And, for the love of God, no more snarkiness on important issues like global warming, and dare I add, monetary solutions to the worst economic crisis since the 1930s.
PS. The alert reader will have noticed that my blog is also full of counterintuitive nonsense. But at least I’m never snarky.
PPS. For the record, like Levitt and Dubner I believe global warming is real and needs to be addressed. And I also share their interest in geoengineering (although as an affluent snorkler I’d be better off with a draconian carbon reduction policy.) And I share their view that many climate experts (and Krugman) overstate the urgency of the crisis. We need to take a deep breath before we turn our economy upside down. The two best solutions would be:
1. For China to privatize the 50% of its economy that is still SOEs, which as in all communist countries are very energy inefficient.
2. A carbon tax.
BTW, I haven’t read their book yet. Does anyone know why they push the sulfates approach to geoengineering? I had thought the creation of artificial clouds of water particles in the northern latitudes was cheaper, nonpolluting, and instantly reversible if nasty side effects developed.
Tyler Cowen recently argued that geoengineering might be politically unacceptable at the international level. But I don’t see this as a serious problem for most actual proposals, which call for geoengineering as only a last resort to cap the rise of global temperature at around 2 or 3 degrees centigrade (until long term energy solutions are developed.) I doubt whether a policy designed to keep the planet from going from hot to very hot would be all that controversial. There would be debate about how much to cool, but not over whether to prevent a 5 to 10 degree rise in temps. The policy won’t be implimented for decades, and by then war will no longer be a tool of international relations. The world will be a big EU. Oops, there I go again with counterintuitive assertions.
Update: Wow! Now I can’t wait to see chapter 5 of Superfreakonomics. This piece by Dubner flatly contradicts much of what Krugman has been saying. One of the two will end up with a lot of egg on their face. Has anyone seen the chapter? (HT: Tyler Cowen)
(HT: Dilip for the Levine link.)
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18. October 2009 at 08:35
They also discuss the water particle idea (just take ocean spray and push it up a little).
The advantage of the sulphur idea is that we have several natural experiments–volcanoes–that illustrate what happens when you push that much sulphur into the environment. It unambiguously lowers temperature without side affects.
Another advantage of this is that we *already* put lots of sulphur in the atmosphere through coal power, and can just redirect that higher up.
Cowen’s complaints are odd. Suppose the cost of eliminating carbon emissions fell to the cost of geoengineering. Surely global coordination would be easier.
The vitriol coming at Levitt and Dubner is a little surprising. And very little of it is directed towards the geoengineering substance of the chapter.
IMO, the best solution would be to eliminate the regulatory and cost barriers preventing nuclear. Bush, by signing the India-US Nuclear deal, probably changed the mix of Indian energy from coal to nuclear by a factor of 400 GW. That’s more than anything Obama will do.
18. October 2009 at 09:48
Thorfinn, Those are all really good points. I’m glad they mentioned water vapor. I am certainly no expert, but I had the impression that we know that more cloud cover over northern oceans would cool the earth. But I could easily be wrong. I had thought that there was a bit of uncertainty over the cost/feasiblity of creating these clouds.
Sulfates do eliminate clear blue skys, at least if you rely heavily on that procedure. And of course they don’t stop acidification of the oceans. And they’ re not immediately reversible. Although that last point is unlikely to be a practical concern, as they’d probably be scaled up gradually.
In the long run I’d like to see the world move past carbon-based energies, or else look for ways of removing carbon that has already been emitted (which is something that deserves more study, as it is the closest thing to a “magic bullet” that one can imagine.)
I have mixed feelings about nuclear (from the cost side.) But if we could somehow emulate the French electrical system, and then add plug-in hybrid cars, that would go a long way, wouldn’t it?
The funny thing is that I am not that worried about 100 years from now–as we always make far more technological progress than we imagine. (Remember 1909) And I’m not worried about 20 years from now, as the warming will be manageable for a while. But I’m a bit worried about 40-60 years from now. So I definitely think the issue is worth our attention.
18. October 2009 at 13:34
Let’s make that carbon tax revenue neutral.
http://www.carbontax.org/
18. October 2009 at 13:36
I seem to remember a snarky blogger who once claimed that he would stop blogging for a while so he could focus on his book.
Scott, please repeat after me: “My name is Scott Sumner and I’m a bloggaholic.” 🙂
Btw, have you revealed what the book is about? Will it be readable by amateurs like me?
18. October 2009 at 14:00
I just added an interesting link from Dubner. Those who have read the post already might want to check out the final link.
Richard A. I totally agree.
malavel, As another blogger might respond, “Who are you calling snarky?” But you are right, I am a bloggaholic. I am trying not to think of anything new to post. I’m just responding when I can no longer hold back. Unfortunately I often can no longer hold back. If only Paul Krugman didn’t exist then my life would be so much simpler. But I guess that would also take much of the fun out of blogging.
18. October 2009 at 14:02
“[Keynes] continually shocked the bourgeoisie with counterinituitive assertions that saving was actually harmful and that we’d all be better off if we buried bottles full of money and paid workers to dig them up.”
Both theses–that saving was harmful and that useless government spending could be useful in a depression–were central to Keynes’ thought. He expressed them vividly, but his purpose was deadly serious. What has that got to do with snark or enraging the bourgeosie or Salon-style contrariness?
18. October 2009 at 14:13
Brad DeLong has a PDF of the “offending” chapter:
http://delong.typepad.com/files/superfreakonomics-chapter-5.pdf
18. October 2009 at 14:13
‘ Ann Coulter is making sense!’
The one time I’m aware of that Krugman took on Coulter, she won on points–how the NY Times covered the death of Dale Earnhardt.
He didn’t exactly cover himself with glory in the Thomas White Enron business either:
http://j-bradford-delong.net/movable_type/archives/000947.html
———–quote———–
October 03, 2002
Kudos to Patrick Sullivan
In Army Secretary Tom White: Archive Entry From Brad DeLong’s Semi-Daily Journal, Patrick Sullivan wrote: “So Krugman is back on the Sec’y White trail. Up to this point virtually everything he’s said about the guy has turned out to be either wrong or grossly distorted. I’m betting that when the context of these e-mails comes out this will also be so. ”
Looks like Patrick wins his bet…
Posted by DeLong at October 03, 2002 09:48 PM | Trackback
————endquote————–
18. October 2009 at 14:18
I don’t see how the Krugman post adds much to the discussion. This was the sort of sloppiness I refered to in comments to your last post. And then to be rude and dismissive on top of it? I wonder if he’d want his students to act that way.
18. October 2009 at 16:09
I cannot contemplate the madness of throwing kilotons of sulfur into the stratosphere over the course of several consecutive decades to “solve” global warming…
The thing economists really should be angry about is the fact that geoengineering (even done in a non-destructive way, such as the high-atmosphere water jet propulsion technique) would be funded by anti-productive taxation, and is an incredibly expensive way to subsidize a massive negative externality. Meanwhile, a carbon tax not only reduces the externality, but also generates tax revenue that offsets other anti-productive taxes.
I suspect that the real source of frustration among climatologists is the following: The very real discussion of geoengineering (even the sulfides version) has the risk of giving people the idea that they can put off carbon controls for yet another 2 or 3 decades… No political action on a global scale can take place except in crisis, and by dissipating the crisis, the geo-engineering option makes the failure of greenhouse gas control much more likely. This is a political issue, not an economic issue.
That is to say, from a political perspective, the existence of a second-best solution (as an alternative to armageddon) makes it far more likely that this is the solution we’ll end up with – even though the vast majority of economists (yes, Mankiw included) think the carbon tax (or even cap and trade) is better. It’s a very simple game theory result.
Having said all of that, the massive emphasis on carbon dioxide is also problematic…
Thorfinn, for example, notes that Coal jettisoned up sulfides (which caused horrible acidification of US lakes and streams), and by cleaning up the coal we made global warming worse. True (though acid rain was a very immediate and _local_ problem).
But this ignores the OTHER components of coal exhaust, including aerosolized carbon black.
http://www.redorbit.com/news/science/1308895/black_carbon_is_major_player_in_global_warming/
And then, of course, there’s the cow flatulence issue:
http://www.independent.co.uk/environment/climate-change/cow-emissions-more-damaging-to-planet-than-cosub2sub-from-cars-427843.html
Levitt and others talk about the CO2 problem primarily as an externality issue… But they largely ignore the cross country considerations, which makes it a trade issue.
The best, simplest, and easiest solution would be a domestic source-tax on carbon coupled with a carbon-equivalence tariff. Interestingly, the Obama administration strongly opposes carbon-equivalence tariffs… requiring members of his party to force it into domestic carbon restriction legislation.
http://www.carbonpositive.net/viewarticle.aspx?articleID=1591
“”I think there may be other ways of doing it than with a tariff approach,” Obama said following the vote. “I am very mindful of wanting to make sure that there’s a level playing field internationally,” he said.”
This, after Obama floated the idea in March/April of 2009… only to back down when certain trade partners (ahem, China/India) made some grumbling noises.
After nearly a year, I’ve come to the conclusion that Obama’s chief political liability is that he’s a pansy.
18. October 2009 at 17:39
pireader, I just read the chapter that Krugman refers to in his post. And Levitt and Dubner are just as serious as Keynes, and their ideas are far more convincing than schemes to bury money only to dig it up again.
Keynes did many of the things Krugman accuses others of doing, such as grossly misrepresenting the research of others, and being intentionally provocative.
I’m not a fan of Keynes’ General Theory (although I like his earlier and later work.)
Thanks Yosef.
Patrick, I just read the chapter, and Dubner is right and Krugman is wrong. They never claimed there was a scientific consensus behind global cooling. Indeed it was included merely to show how hard it is to forecast the climate. But they later say that they believe global warming is real. So Krugman really did misrepresent what they wrote.
Mike, I agree. The chapter has some flaws, some things the average person would misinterpret, but overall I liked it. The main thing I learned is that the cost of the sulfate option is much lower than I had thought. The biggest flaw is that they didn’t mention that it would not eliminate ocean acidification. But I know how they’d respond—there’s no way the world would spend a trillion dollars to stop ocean acidification.
Statsguy, You said;
“The thing economists really should be angry about is the fact that geoengineering (even done in a non-destructive way, such as the high-atmosphere water jet propulsion technique) would be funded by anti-productive taxation, and is an incredibly expensive way to subsidize a massive negative externality. Meanwhile, a carbon tax not only reduces the externality, but also generates tax revenue that offsets other anti-productive taxes.”
This mixes up two issues. If Levitt and Dubner are right, then those “exernalities” would vanish if geoengineering worked, and the efficiency gains of a carbon tax would vanish with them. The trillion dollars spent on cutting carbon emissions would be a complete waste if there was an alternative option that cost only a few billion. I favor a carbon tax for many reasons, not just global warming. I care about ocean acidification more than most people. So I might agree with you in the end. But they argue (quite plausibly) that we aren’t going to stop global warming by reducing carbon emissions, at least in the next few decades. So don’t we need a backup plan to limit warming until we do inevitably move past a carbon economy at some point in the more distant future?
You are right about the game theory problem posed by the geoengineering option. I once did some research on the economics of geoengineering, and I recall the reason most environmentalists opposed it is that they thought we would keep emitted carbon if we had that fallback. Suppose cancer and heart disease cures were developed. Should we not implement them because it would reduce the pressure people faced to give up smoking? The analogy is far from perfect, but it’s something to think about.
19. October 2009 at 00:15
Moving slightly off topic: what really bugs me about geo-engineering is that no one is willing to spend much money on it. Think of iron fertilisation of the oceans for example. We know that this create algal blooms (for there are areas of the oceans where there is not enough iron to feed algae, add it and you get them). We know that some of the carbon then ends up as rock: just not how much.
If it’s a lot then we’ve got an extraordinarily cheap method of sucking CO2 out of the atmosphere (I once worked it out to something like 3 cents a tonne making some reasonable assumptions). If it’s none then, well, OK, on to the next idea. If it’s some then it’s still cheap.
But when a company thought about going off to test it (Planktos) everyone started screaming that you couldn’t do that to the oceans! And no one seems willing to come up with a couple of million to really test the idea.
It’s not that geo-engineering will or won’t work: it’s that for some reason no one wants to find out whether it will or not.
Moving much further off topic, what seriously bugs me about some proposed solutions is the way that various Greens keep telling us that we’ve got to reverse globalisation to deal with it. More local economies, more regionalisation. When, if you look at the economic models which feed into the IPCC, we’ve got a clear assumption that more globalisation would be better. How can anyone advocate reversing globalisation to deal with climate change when we’ve already assumed, in reaching the decision that there will be climate change, that globalisation itself will mitigate climate change?
19. October 2009 at 05:15
Scott,
Your blogs are much more interesting and informative when you aren’t nitpicking Krugman’s blog.
I’d advise sticking to your takedown of the Fed in September 2008 and other nGDP-focused areas of discussion.
These grasping comparisons between Keynes and Levitt are the kind of things I expect in my World of Warcraft forum discussions 🙂
19. October 2009 at 05:36
I’ve been amused by the fuss the D&L have managed to generate. The irony is that as upset that the scientists are about the misrepresentation of the science, they seemingly unwittingly engage in dubious economics and make all kinds of normative leaps to get to their desired policy conclusions.
For example, Gavin Schmidt at RealClimate makes the following statement:
“His [Levitt’s] second error is in not appreciating the nature of the cost-benefit calculations. Imagine for instance that all of the horse manure and dead carcasses could have been easily swept into the rivers and were only a problem for people significantly downstream who lived in a different state or country. Much of the costs, public health issues, etc. would now be borne by the citizens of the downstream area who would not be benefiting from the economic prosperity of the city. Would the switch to automobiles have been as fast? Of course not. The higher initial cost of cars would only have made sense if the same people who were shelling out for the car would be able to cash in on the benefits of the reduced side effects. This is of course the basic issue we have with CO2. The people benefiting from fossil fuel based energy are not those likely to suffer from the consequences of CO2 emissions.”
http://www.realclimate.org/index.php/archives/2009/10/why-levitt-and-dubner-like-geo-engineering-and-why-they-are-wrong/
Does that make any sense? Does the marginal car buyer in the early 20th C feel the benefit of his marginal reduction in horse waste significantly more if it is in his city or the one downstream?
Also, Krugman’s whine about the misuse of Weitzman’s work is just BS (http://krugman.blogs.nytimes.com/2009/10/17/weitzman-in-context/). In recent work, Weitzman does two things: 1. summarizes the available estimates of climate impacts of CO2 emissions showing wide variation in estimates 2. develops a normative framework to show that the appropriate policy response is to spend an infinite amount on abatement due to fat tailed uncertainty. D&L focus on number 1 for the simple reason that they clearly don’t buy into the normative assumptions underlying 2. Weitzman assumes people are willing to go to infinitely great lengths to avoid low probability disasters. That’s certainly not true at the individual level and it is also debatable at the population level.
19. October 2009 at 05:55
Tim,
The Indo-German Iron Fertilization Experiment recently found a minimal effect of iron fertilization on carbon reduction. So there are at least a few teams willing to study the issue (presumably, developing countries will be far more willing). But the issue seems complicated–may iron fertilization may work elsewhere, maybe other trials won’t work–so a lot more research would be necessary to develop workable proposals.
In a sane world, you’d actually expect the environmentalists to step up and fund some trials, so we have an option in the worst-case scenario of high global warming. They really do seem more concerned with encouraging proper behavior and guilt rather than solving the problem.
19. October 2009 at 06:20
Scott said: “But they argue (quite plausibly) that we aren’t going to stop global warming by reducing carbon emissions, at least in the next few decades. So don’t we need a backup plan to limit warming until we do inevitably move past a carbon economy at some point in the more distant future?”
Don’t carbon taxes and technological innovation go hand in hand? I don’t even see why the the rest of the world needs to be on board. If the US credibly commits to putting a carbon tax in place (with corresponding tariffs to prevent the outsourcing of emissions to foreign countries) the R&D incentives will be huge.
19. October 2009 at 09:26
ssumner:
“If Levitt and Dubner are right, then those “exernalities” would vanish if geoengineering worked, and the efficiency gains of a carbon tax would vanish with them.”
Not quite true… If Levitt and Dubner are right, then those externalities would be diminished. The harm is still done, and still requires costly mitigation.
Moreover, it would probably still be optimal to implement a smaller carbon tax, and dedicate proceeds to funding the geo-engineering project (rather than fund it through income tax, which effects a subsidy to carbon emissions). At the worst, it’s a Pigou tax; at best it shifts a moderate amount of activity (at the margin) from high-carbon-emissions to low-carbon-emissions processes.
Is that not the case? Or are you truly arguing that geo-engineering should be funded by general tax funds (i.e. income and sales/VAT)?
19. October 2009 at 09:30
Thorfinn:
“In a sane world, you’d actually expect the environmentalists to step up and fund some trials”
First, they are, and they are also funding technological solutions. But they – like everyone – are interested in equity. And they realize that every unilateral action they take to reduce emissions (even if successful) is an effective subsidy to those who continue to abuse the Commons.
It is precisely the same argument that the US conservatives (justly) direct at China and India.
19. October 2009 at 09:52
Tim, I agree with your general point. I recall that people are increasing skeptical of the iron fertilization option, but these things should be studied much more aggressively. I seem to recall someone claiming that lcoal food does not reduce carbon emissions, but I’ve forgot where I saw it.
I really like to see more investigation of carbon removal, as it would be far superior to geoengineering that simply blocks sunlight.
mark, I agree my other stuff is more interesting. Sometimes I think a humorous diversion would be fun, but I won’t make this a habit (BTW, be sure to skip my next post.)
thruth, Those are good points. BTW, I see the main advantage of geoengineering as that it cuts off that long tail. It takes off the table the risk of more that 2 or 3 degrees of heating. The world would never allow that, we’d adopt either the sulfates or sea spray approach long before we flooded our coastal cities.
I’m still more in favor of a carbon tax than they are, but these disaster scenarios don’t scare me at all. For better or worse humans now have the power to control the earth’s temperature. We just don’t realize it yet.
Thorfinn, Thanks, I also recall that study.
Thruth#2, Good point.
Statsguy, Now I think we are on the same page. I’d like us to pursue a carbon tax and a backup geoengineering program. And I think we will do both. I don’t think we will be successful enough in reducing carbon, but I think we will have some effect. Against a do-nothing rise of say 5 degrees in 2100, perhaps carbon reduction will reduce temps by 1 or 2, and geoengineering by 1 or 2, leaving a net rise of 2 degrees. That’s the sort of scenario that I see as more likely. I’d probably favor a higher carbon tax than we are likely to do (or higher than the cap and trade equivilent) so I am by no means totally opposed to the environmental position.
On the final equity issue, I see your point, but we are much richer than China and India, and the plausible amounts that we’d spend on possible technological fixes would be relatively small potatoes for the US. There is only so much money that can be usefully spend on some of these far out ideas.
19. October 2009 at 14:49
Brad DeLong is still up to his old tricks, I see:
http://rogerpielkejr.blogspot.com/2009/10/brad-is-brad-delong.html
‘Brad DeLong emailed me with a verbatim version of comments entered on my post about his attack-by-proxy on me by someone named “brad”. I had assumed that “brad” was not Professor Brad DeLong because “brad”‘s comments were so sophmoric and inane, but apparently they are one and the same person.’
19. October 2009 at 16:33
ssumner: “I’d like us to pursue a carbon tax and a backup geoengineering program. And I think we will do both.”
That’s what we should do, but we won’t do it. I attended an event with Markey speaking a few months ago and posed the carbon tax question (as well as asking whether he favored a carbon offset tariff). He favored both, but answered that it was politically infeasible to expect a tax – I think his choice words were “political suicide” to tax gasoline (because it’s so visible).
Cap-And-Trade has too many political advantages – first, politicians can blame the market for prices. Second, the initial grants of carbon permits grandfathers polluters, constituting a massive subsidy to pay off polluters for cutting back on their harmful externalities. The success of the sulfur permit program (and popularity among polluters) has already carved the path, and environmental activitists have already resigned themselves that the carbon permits are the price to pay get any action at all out of Congress.
And Markey (who has 20 years experience and now chairs the relevant committee) is neither incompetent nor corrupt nor excessively ideological. He’s just a realist.
20. October 2009 at 02:11
“I seem to recall someone claiming that lcoal food does not reduce carbon emissions, but I’ve forgot where I saw it.”
That would be Adam Smith wouldn’t it? By means of walls and glasshouses a perfectly acceptable Bourdeaux could be grown in Scotland?
More recently the UK government did one on tomatoes. Those grown in Spain had fewer emissions than those hothoused in the UK. In fact, they’ve done several such including the lovely finding that fully 50% of food related emissions come from driving the stuff home from the supermarket (but don’t quote me on that number, from memory).
In the “well, they would say that” stakes we’ve also got the New Zealand sheep farmers with a report that lamb from New Zealand has lower emissions to get to the plate in London that Welsh lamb does. They also appear to be right.
20. October 2009 at 04:21
Thanks Patrick. What are Roger Pielke’s views on global warming?
Statsguy, You are right about the politics of the carbon tax. I wasn’t thinking clearly when I wrote that response. I meant that we should both reduce carbon and pursue geoengineering. Unfortunately the cap and trade bill is likely to be pretty bad. I hope I am wrong.
What’s your view on nuclear? I go back and forth, but it seems to have worked pretty well for France. I know France has a comparative advantage in large infrastructure projects, but you’d think others would be able to copy their success. I’m surprised the French model doesn’t get more attention. We are clearly moving toward plug in hybrids, and French electicity has been mostly carbon neutral for decades. It’s really the only successful model out there.
Thanks Tim. I think these are “feel good” ideas. We all know that big corporate farming is not a pretty sight, but it doesn’t seem that local food initiatives solve the carbon problem
20. October 2009 at 08:51
The nuclear discussion is going to have to wait (complicated), but I (unfortunately) am in total agreement with you that Cap-And-Trade could be a disaster, for reasons similar to why I think the health care bill (if passed in current form) will be a disaster.
Anyway – to stay relevant to the post – I can understand why you are critical of Krugman. He criticizes others for snark, but dishes out more than his share. It’s hypocritical. But, reading Cochrane’s response (linked above), I have the general sense that Cochrane is guilty of exactly the same things he’s accusing Krugman of doing. Indeed, in that very same article. Consider the following gross mischaracterizations:
“Krugman at bottom is arguing that the government should massively intervene in financial markets, and take charge of the allocation of capital.”
No, Krugman is mostly arguing that we should fix market failures and execute targeted government investments, not “take charge of the allocation of capital”. Cochrane engages in the political act of labeling Krugman a Marxist.
“Crying “bubble” is empty unless you have an operational procedure for identifying bubbles, distinguishing them from rationally low risk premiums, and not crying wolf too many years in a row.”
Is Cochrane arguing that bubbles are not real, or are not recognizable, or are not real because they are not recognizable? Many would argue he’s wrong on all accounts (as the Austrians here can attest). Many many people identified the bubble, and were shouted down precisely by those who argued that markets can’t be completely wrong (including Alan Greenspan). BUT, even if he were right that it’s currently impossible to recognize a bubble, isn’t that an argument for figuring out how to do this (which Krugman is advocating)? Or does Cochrane believe that bubbles don’t exist at all?
“Remember, the SEC couldn’t even find Bernie Madoff when he was handed to them on a silver platter.”
The SEC was deliberately handicapped by the Bush administration through appointees, direct management, funding, and legal obstacles. The SEC’s capture was absolute largely because of the anti-interventionist ideology that Cochrane is defending. Cochrane’s argument amounts to someone starving a dog, and then arguing the dog wasn’t worth feeding because he was so weak.
“he likes the huge “fiscal stimulus” provided by multi-trillion dollar deficits.”
First, the stimulus only drove a modest amount of deficit spending, and second I don’t think Krugman ever said he “likes” multi-trillion dollar deficits.
Anyway, there are plenty of examples… and lots more from Krugman too. You can (justly) get mad at Krugman for his sloppiness and snark, but you have to recognize that for the last 25 years people like Cochrane have dealt more than their fair share of snark and outright disdain for lesser mortals. Much of what you are seeing from Krugman is childish glee that the tables are finally turned.
And now that Cochrane is on the losing end of popular opinion, he has decided to take the high road – except that he’s having difficulty making the adjustment.
And I don’t claim to be guiltless either…
“What can innocence hope for, When such as sit her judges are corrupted!”
— Phillip Massinger
20. October 2009 at 11:23
Here’s a summary of some of the environmental threats to our oceans. The way things are going, there could be no fish left in the oceans in as little as 40 years.
http://selfdestructivebastards.blogspot.com/2009/10/our-oceans-are-dying.html
21. October 2009 at 17:00
Statsguy, I agree with the broad thrust of your post, but not all the details. You firs tpoint about socialized investment is correct–. Krugman did favor nationalizing the big banks, but I am pretty sure for only a few years. He is not a socialist.
I actually kind of agree with Cochrane on bubbles, we have no way to identify them in real time in a way that would help policymakers. That was the whole point of my Rorty and the EMH post back around April.
I don’t really know about the SEC. There is certainly no ideological objection to stopping fraud, indeed I imagine that many Republicans feel that is all they should do. And many of the Enron-type scandals were actually occurring under Clinton (although the story broke in 2001 I believe.) But there may be some truth to what you say.
I think that very smart people tend to be a bit arrogant and snarky, Chicago school included. I do believe the liberal bloggers I read (Thoma excepted) are a bit snarkier than the libertarians I read. But it’s a small sample, and I suppose one always sees more flaws in those one disagrees with.
Thanks Canada Guy, I agree. Of the items they mentioned, overfishing is probably the worst problem. That’s where more property rights could help.
Unfortunately, the carbon problem isn’t going away soon.
25. October 2009 at 12:48
Here, go look at some pictures: http://www.chrisjordan.com/
Start at midway and make sure you don’t miss:
Running the Numbers
An American Self-Portrait
26. October 2009 at 04:51
lxm, Yup, that’s a lot of stuff.