Noticing splinters in the eyes of others

On June 8th Larry Kotlikoff did a bloggingheads discussion of Thomas Piketty with Glenn Loury. Kotlikoff pointed out many important flaws with both the theory and data in Piketty’s new book. Unfortunately, the discussion was somewhat marred by Kotlikoff’s personal attacks on Piketty:

This guy is a fraud. 

Kotlikoff suggested that Piketty knew that his model was wrong, and was intentionally misleading in order to create a sensation.  But again, I agree with most of the substantive economic points made by Kotlikoff.

Now Kotlikoff has a new column at Forbes criticizing Krugman:

I think public intellectuals, like Paul Krugman, have a responsibility to act like grownups in speaking with the public. If they start calling people with different views “stupid,” they demean themselves and convey the message that name calling rather than respectful debate is appropriate conduct. It certainly is not.

Economists who are engaging with the public have a special responsibility in this regard. First, none of we economists know anything for dead sure. Second, understanding the economy and our various theories of the economy is really difficult for people who haven’t spent years seeped in the subject. So a key job economists have is to explain the different views we have about how the economy works before explaining why we prefer our view. .

Simply saying “You’re wrong, I’m right, and, furthermore, you’re stupid for not agreeing with me.” is something you’d expect from a child, not a grown up and certainly not from a columnist for the New York Times who sports a Nobel Prize.

PS.  Fortunately I never overlook my own faults when criticizing others.  The Pied Piper remark? That was meant as a compliment.  🙂

HT:  Marcus Nunes


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41 Responses to “Noticing splinters in the eyes of others”

  1. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    3. August 2014 at 09:17

    I don’t see any hypocrisy on Kotlikoff’s part here. He didn’t call Piketty ‘stupid’. In fact, he called him smart. His problem with the book is that Piketty should know what failings the arguments in it have. Which he did a good job ticking off.

    If anyone looks a little…er, lacking in knowledge in the bloggingheads exchange it’s Loury. Since Krugman’s name came up, and Loury defended him, I’ll remind everyone (don’t stop me if you’ve heard this before) that Krugman is still peddling a theory of market failure, ‘path dependence’, in Krugman and Wells (hence to impressionable undergrads) that he has admitted elsewhere is false.

    About that theory Deirdre McCloskey said, ‘As near as I can tell, people like the theory…because they like the theory.’

    Which I believe explains the positive reviews from certain quarters, of Piketty’s book. They like his theory…because they like his theory. I don’t think that saying that out loud is harming honest debate.

  2. Gravatar of Major.Freedom Major.Freedom
    3. August 2014 at 10:10

    Patrick Sullivan:

    Just so I understand, you aren’t suggesting that all “path dependency” theory is false, are you? Or just Krugman’s version?

  3. Gravatar of bill bill
    3. August 2014 at 10:11

    Scott. You are a class act for pointing this out. Krugman is often over the top with his personal attacks.

  4. Gravatar of Anand Anand
    3. August 2014 at 10:27

    Kotlikoff calling Piketty a fraud is hardly different from Krugman calling Paul Ryan a con-man. In both cases they give their reasons, which may be right or wrong.

    People in public life develop a thick skin. I am sure Paul Ryan has one.

  5. Gravatar of Jason Smith Jason Smith
    3. August 2014 at 10:36

    I always like to think of the Aumann agreement theorem in cases like this:

    http://en.wikipedia.org/wiki/Aumann%27s_agreement_theorem

    Two Bayesians with common priors cannot agree to disagree. That leaves only three solutions for people who disagree: you don’t have common priors, one (or both) of you aren’t Bayesian, or one (or both) of you is “stupid” 🙂

  6. Gravatar of Major.Freedom Major.Freedom
    3. August 2014 at 11:03

    Kotlikoff wrote:

    “First, none of we economists know anything for dead sure.”

    These kinds of comments always make me chuckle. The person who says them intends to come across as humble and restrained, in order to present the people they want to disparage as the opposite. I can appreciate the motivation, but it just makes a mess of it. For these statements themselves are presented as absolutely true, and thus the presenter can only be logically understood as someone who does indeed know an absolute truth, namely, that the human mind is so constituted so as to prevent people from ever knowing an absolute truth!

    It is a statement that humans both can know and cannot know absolute truths. It is a self-contradictory statement. What does that mean? It means the person saying it is contradicting their own selves when they present that argument. They are making a universal claim of the world that cannot possibly be true if the content of the statement is true. In other words, if the content of the statement is true, then the statement must be false. If nobody can know any absolute truths, then nobody can know the statement “nobody can know any absolute truths” is a truth, and that of course includes the person making that claim!

    The only way out of that contradiction is to understand that our minds MUST be capable of knowing truth. The claims that other people make that we suspect are false don’t have to be understood as false because the person is presupposing knowledge of truth with a capital T is possible. We don’t have to go down the route of outright denial of anyone knowing any truth if we want yet still other people to not blindingly believe the people we suspect are wrong. That is a contradictory approach that would even deny the validity of the denial.

    We can use ratiocination of what we can and do know for certain. There are some things economists can know for certain. Economists can know for certain what is present or presupposed in both claims AND their opposites. Absolute truth is truth that is within ALL thought, ALL claims, ALL actions. It is for example the truth in making both the claim that MM is true, and the claim that MM is false. This is truth that cannot be denied, because it is universal truth. It is the truth that we necessarily know when we are making denials as such. We might not be fully aware of this truth at any given time, but we are not fully responsible for our mental abilities. The way our minds are structured, is a given to us that only self-reflection can understand. Not everyone self-reflects to equal degrees. Many do not subject their own statements to self-reflective analysis.

    Why does all this matter? What does this have to do with economics? I wish I could show just how important it is, but it can’t be shown. It can only be self-motivated. This is what has unfortunately been termed as knowledge of “spontaneous” activity.

    For this blogpost, it can help with refraining from attacking the human mind as a means to proving someone else wrong. It can help with encouraging rational debate as opposed to the Sumnerian and Kotlikoffian “You’re wrong and I will manifest my disagreement with you by denying your own reason, that is, I will support and call for you to be physically coerced into obeying my rules for your own body and property.”

    While I disagree with Sumner when it comes to money, my disagreement does not manifest in his person or property being subjected to initiations of force. Why? Because I do not self-contradict by denying individual reason. I respect my own reason, and that enables me to respect the reason of others. The only time I disagree with others is when my person and property are under threat of violence. I do not disagree with you if you want toilet paper as an MOE/MOA. I just disagree with you seeking to impose it on me through coercion, and I welcome others in fighting for their own persons and property as well in this manner.

    The kind of “debate” that pervades the macroeconomics field is who can have the most intellectual influence in getting their own version of government coercion imposed on the other macroeconomists. I am not surprised that this often encourages name calling and insults. They are not engaging in rational debate that presupposes mutual respect for the other’s economic freedom. I appreciate the searching for mutual respect and so on, but don’t kid yourselves. You’re not true intellectuals, yet. You’re selfish violence advocating socialists who a priori reject non-aggression and peace. You’re talking about optimal ways guns should be pointed at innocent people, and your concern is whether there is name calling?!

  7. Gravatar of Philippe Philippe
    3. August 2014 at 11:31

    You really are a profoundly delusional individual, mf.

    Everything you write is pompous, juvenile crap.

  8. Gravatar of Jim Glass Jim Glass
    3. August 2014 at 11:54

    Being in the mood for some gratuitous splinter-noticing…

    Barney Frank, not your typical right-winger, on Obamacare:

    “The rollout was so bad, and I was appalled “” I don’t understand how the president could have sat there and not been checking on that on a weekly basis…

    “But frankly, he should never have said as much as he did, that if you like your current health care plan, you can keep it. That wasn’t true. And you shouldn’t lie to people. And they just lied to people.”

    It makes one wonder, might they have told any other lies for the same purpose? Such as, insuring millions more people would reduce health care spending and future deficits, etc?

    To be a little extra gratuitous, as Krugman is a topic of the original exchange, PK has explained that he was politically “radicalized” by his discovery in 2000 of how many lying liars there were in Washington (he’d never suspected!) pushing through their (Republican) political agenda with lies, and that has ever since considered it his duty call them out on it. To the point where even his editors at the Times told him to stop using the words “lie, liar” so much.

    But this little agenda-pushing lie he somehow missed entirely, never saying a word about it. Go figure.

    And, somehow, even with so much high-powered dissembling supporting it, Obamacare is now down to 16 points underwater with the voters with election nearing. Go figure that too.

    /gratuitous Sunday splinter-noticing.

  9. Gravatar of Major.Freedom Major.Freedom
    3. August 2014 at 16:34

    Philippe:

    Coming from you that tells me I’m on the right track. I guess thank you for the validation then?!

    Also, that isn’t a substantive rebuttal. It is actually the words you chose to describe my comment. Hypocriception. Bwaaam. Dig deeper into your psyche Philippe, and eventually you’ll confront your demon. Be careful though…

  10. Gravatar of benjamin cole benjamin cole
    3. August 2014 at 16:40

    Like Kotlikoff, I have spent many years “seeped in the subject.” I am leaking. I also seep my tea.
    Sadly, macroeconomics has become politics in drag, although monetary policy has the strange dogmatic infusion of the monomanical inflation-phobiacs.

    BTW, Richard Fisher was captured by aliens, taken to their home planet. There he saw towering skyscrapers miles high, incredibly productive farms and vehicles which levitated as they traveled city streets lined with gold. He was transported back to earth and he reported that the alien culture was a failure. Why the inflation rate was 1.9 percent.

  11. Gravatar of Mike Sax Mike Sax
    3. August 2014 at 16:53

    Thanks for clarifying your estimation of the phrase ‘pied piper.’ However, in reading your Econlog piece you have a different definition of ‘major success story’ than I do or Krugman or any of these other allegedly benighted progressives you scoff about has either.

    I mean I certainly don’t describe this as a success story. As a result, today Germany has lots more very low wage jobs of the type that would be illegal in France or California. (Germany has no minimum wage. ”

    Lots of low wage jobs-that’s a success story only a conservative would love. As the Guardian points out most of the people who were knocked off the welfare roles are worse off now than then-you of course gloss over that as like a true conservative they don’t even figure into your calculus.

    Also your mention of Germany having no minimum wage is sort of a red herring anyway. You accuse Yglesias of crediting old liberal programs for recent low youth unemployment and yet you seem to think that no MW in Germany deserves some of the credit for the recent alleged success story though having no MW is not a new phenomenon in Germany either-they never had one.

    One could just as soon in explaining the alleged jobs miracle you always site in Britain site that the British have a MW, in fact have implemented one fairly recently-in that case you would scoff at the irrelevance.

    Yet Britain’s MW is very new and yet it had none of the untoward effects that you and your Right wing friends claim it does.

    At best it’s a wash on the MW. It’s true that you can point out that a number of countries that liberals admire have no MW or not till recently-how many realize Sweden has no MW?

    Of course, the other side is that countries like Sweden and Germany have much stronger unions-and in the case of Sweden at least much higher taxes and a much bigger welfare state.

    It’s easy to cherry-pick and you always cherry-pick in favor of conservatives.

  12. Gravatar of Mike Sax Mike Sax
    3. August 2014 at 17:05

    On Krugman though I agree 100 percent-I’ve never known you to call anyone stupid ever.

    As irony usually goes totally over your head-yes I’m joking here.

  13. Gravatar of Joel Aaron Freeman Joel Aaron Freeman
    3. August 2014 at 18:46

    Mike Sax,

    For being someone who is highly critical of Sumner’s inability to detect your own usage of irony, you are not doing a particularly good job of detecting Sumner’s usage of irony.

  14. Gravatar of A A
    3. August 2014 at 19:22

    Ironically, Kotlikoff’s Forbes article features the following name-calling: “I’m sorry, but Paul Ryan is not stupid, and Paul Ryan does not deserve to be called stupid. Anyone who spent 5 minutes talking to Paul Ryan would understand that this is a man of exceptional intelligence, extensive knowledge, unquestioned integrity, and deep concern for the wellbeing of all Americans.”

    That is simply unsupported labeling from another direction. Krugman’s hyperbole, hypocrisy, and homissions weaken is effectiveness, but he still puts forward a disputable case. Kotlikoff is indulging in the purest form of name-calling.

  15. Gravatar of W. Peden W. Peden
    4. August 2014 at 00:33

    Mike Sax,

    “Yet Britain’s MW is very new and yet it had none of the untoward effects that you and your Right wing friends claim it does.”

    Maybe not, but the prima facie evidence is that it does have some of those effects. In particular, UK youth unemployment bottomed out on official statistics in late 2003, when the minimum wage was extended to 16-21 year-olds, and started an anti-cylical rise-

    http://www.economicshelp.org/wp-content/uploads/blog-uploads/2012/10/youth-unemployment-500×377.png

    We have gone from having youth unemployment figures that are significantly below the EU average to being significantly above the EU average, BEFORE the Great Recession-

    http://i.huffpost.com/gen/962090/thumbs/o-UK-YOUTH-UNEMPLOYMENT-570.jpg?7

    Also, prices in sectors affected by the introduction of the minimum wage have risen faster than in sectors not affected-

    http://www.ifs.org.uk/publications/4790

    – suggesting the possibility that the alleged negative effects of the minimum wage in the UK are real, but manifested themselves more in higher prices for consumers rather than higher unemployment for low-skilled adults.

    Now, that doesn’t prove that people on the right were correct that the minimum wage would cause youth unemployment in the UK or that it would push up prices. Correlation is not causation (and lack of correlation isn’t proof of non-causation either). To really work such things out, you need a rigorous model that takes account of a lot of different potentially confounding factors.

    However, if we’re being epistemically modest in reaction to the above figures, then we shouldn’t throw around confident claims like you do in the above quote.

  16. Gravatar of W. Peden W. Peden
    4. August 2014 at 00:35

    If you’re wondering, I think that the main reasons the figures in those two graphs vary is because one is for 16-25 year-olds and the other is for 15-24 year-olds.

  17. Gravatar of ssumner ssumner
    4. August 2014 at 04:22

    Mike Sax, I see you are still having trouble understanding my posts.

  18. Gravatar of TravisV TravisV
    4. August 2014 at 05:58

    Reality-based lecturing from Ezra Klein and Yglesias:

    http://www.vox.com/2014/8/1/5954701/neil-degrasse-tyson-gmos-dangerous-safe

    http://www.vox.com/2014/8/4/5964509/the-false-choice-between-equality-and-globalization

  19. Gravatar of MG MG
    4. August 2014 at 06:45

    OK so it appears that both Kotlikof and Krugman engage in ad hominen attacks.

    But Krugman goes beyond the simple ad hominen (to the man). His statements suggest that for him ALL (i.e., not the man, but all men in a group) are to be excoriated. Republicans are…Conservatives are…Libertarians are…

    Does Kotlikof engage in this form of rhetorical excess?

  20. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    4. August 2014 at 07:26

    Now we know; the minimum wage was introduced in Germany as a way to tax the poor;

    http://uk.reuters.com/article/2014/08/03/uk-germany-tax-idUKKBN0G30HW20140803?rpc=401&feedType=RSS&feedName=worldNews&rpc=401

    ———quote———-
    When asked how the government could make up for the four billion euros of lost income [if ‘bracket creep’ is ended], [Economy Minister] Gabriel said that the introduction of a minimum wage in Germany from 2015 would bring in new tax income and lower state costs for social welfare support.

    “We’ll have, for example, a giant reduction in expenditures and a giant increase in income thanks to the minimum wage,” he said, referring to the 8.50-euro pay threshold that his party insisted on introducing as their price for joining a grand coalition government with Merkel.

    “That’ll mean more people are paying into the social welfare system with the minimum wage and that’ll mean we’re paying out less in social welfare spending. I believe we should give part of that back to the middle-income wage earners.”
    ———endquote——-

    Doppelzählung!

  21. Gravatar of ThomasH ThomasH
    4. August 2014 at 08:16

    I agree that “public intellectuals, like Paul Krugman, have a responsibility to act like grownups in speaking with the public. If they start calling people with different views “stupid,” they demean themselves and convey the message that name calling rather than respectful debate is appropriate conduct. It certainly is not.”

    If Klotlikoff thinks a public intellectual, like Paul Krugman, has called someone stupid, he should name the person and quote him calling someone stupid.

  22. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    4. August 2014 at 11:40

    Well, ThomasH, if you read the piece linked to, you’ll see that that is exactly what Kotlikoff did.

  23. Gravatar of mpowell mpowell
    4. August 2014 at 11:45

    I agree with Anand here. It doesn’t make much sense to call someone stupid, but there are certainly professional liars, frauds and hacks out there. If you have an argument that someone fits this description, I’m happy to hear it. Identifying those folks and appropriately discrediting their arguments is a very important part of public discourse. The ad hominem cry is an over-rated defense of bad ideas. 99% of what you read will reference at least some external idea or data that you, as the reader, are not entirely familiar with. It’s important to know whether you should extend some credit to the writer or not. In general, it’s always a good idea to understand the biases and inclinations of a writer and these are just the extreme cases.

  24. Gravatar of Vivian Darkbloom Vivian Darkbloom
    4. August 2014 at 12:09

    The advice often given to those aspiring to write literature should be applicable here as well: “show, don’t tell”. A least for thinking persons it is much more effective and entertaining. It’s pretty easy to merely assert that another is “stupid”. *Showing* that the person is stupid requires a bit more imagination and the mustering of a few facts. When one resorts to name calling, it suggests that the name-caller doesn’t have anything further to offer, and that his or her case for the proposition is likely a weak one. If Kotlikoff, by showing the weaknesses of Piketty’s data and arguments is “suggesting” something, I would submit that is totally appropriate.

    Kotlikoff also said that Piketty’s book was “crap”. When challenged, he quickly took that back as excessive and I think he was sincere that that was over the top and overly broad. I’ll bet if given the confronted with it, he’d take back that fraud comment, too. At least, I hope he would.

    Which leads me to another point: Which is less excusable? Making an inappropriate off-the-cuff oral comment or publishing something in writing and a bit less extemporaneous in the New York Times? It is clear that the Times has no editorial control over Krugman. If they did, I’m sure they’d block that sort of thing.

  25. Gravatar of Scott Sumner Scott Sumner
    4. August 2014 at 12:55

    Vivian, You are even more generous to Kotilkoff than you thought I was to Gruber. You said:

    “Kotlikoff also said that Piketty’s book was “crap”. When challenged, he quickly took that back as excessive and I think he was sincere that that was over the top and overly broad. I’ll bet if given the confronted with it, he’d take back that fraud comment, too. At least, I hope he would.”

    Yes, he took back the “crap” comment. But later in the same interview he repeated the “crap” comment for a second time.

    Then a third time.

    Still think he was “sincere” taking it back?

    Everyone, I have no idea where people got the crazy idea that I thought Kotlikoff’s sins were equivalent to Krugman’s sins.

  26. Gravatar of A A
    4. August 2014 at 14:14

    Patrick Sullivan,

    “Mike is an X’s idea of what a Y looks like.”

    If you remove the emotionally resonant terms, Mike is clearly not argued to be X.

  27. Gravatar of Mike Sax Mike Sax
    4. August 2014 at 18:08

    W. Peden you don’t think Scott is confident when he knocks the MW? That’s my whole point-if you look at what the mainstream Macro profession writes about the MW today it’s basically a wash.

    So why do liberals have to explain the alleged German miracle in the face of no minimum wage.

  28. Gravatar of Mike Sax Mike Sax
    4. August 2014 at 18:09

    Scott what specifically did I not understand in this post? Name me one tangible thing. I’m all ears.

  29. Gravatar of Becky Hargrove Becky Hargrove
    4. August 2014 at 18:15

    Sometimes, chips on shoulders seem to be bigger than splinters in eyes.

  30. Gravatar of Mike Sax Mike Sax
    4. August 2014 at 18:26

    Becky-I wonder who you have in mind as having a chip on their shoulder…

  31. Gravatar of ssumner ssumner
    5. August 2014 at 04:59

    Mike, For one thing the other post was not about the minimum wage, Germany’s never had one, it was about labor market reforms.

    On this post, you seem to think I was denying calling people stupid. That’s just stupid!

  32. Gravatar of Becky Hargrove Becky Hargrove
    5. August 2014 at 07:39

    Mike,
    Me. It gets hard to do anything productive at all, when all I can think about is punching the enemy

  33. Gravatar of W. Peden W. Peden
    5. August 2014 at 08:24

    Mike Sax,

    My comment was about the section of your comment that I quoted.

  34. Gravatar of Mike Sax Mike Sax
    6. August 2014 at 15:15

    Geez Becky who do you consider your enemy?

  35. Gravatar of Mike Sax Mike Sax
    6. August 2014 at 15:33

    “On this post, you seem to think I was denying calling people stupid. That’s just stupid!”

    Well what I notice is that conservatives never stop whining that Krugman calls people he disagrees with stupid.

    You disagree with Kotikoff where he complains that Krugman calls people stupid? My point is really just it’s well stupid to complain about anyone else calling people stupid. The conservatives who accuse Krugman are at least as guilty as he is.

    On the MW I didn’t bring this up out of thin air. I was responding to this comment on your Econolog post:

    “So the one major success story among developed countries has achieved its success by doing essentially the exact opposite of what progressives want. Germany has no minimum wage, reduced its incentives to live off welfare, and has a level of wage inequality that is increasing even faster than in the US. It’s no wonder that progressives prefer to focus on things like “vocational training programs,” which were just as common during the 30-year period of steadily rising German unemployment.”

    You are clearly identifying the MW as one factor that is giving us this alleged success in the German labor market.

    I say alleged because more fundamentally, I think that you always gloss over the real complaint of liberals here. The creation of lots of lots low wage jobs is at best a questionable success story. Sure if we create 500.000 low wage jobs that’s going to give us ‘lower unemployment’ but these folks are still going to be too poor to have even a basic standard of living-what liberals call a living wage-for some reasons conservatives find this idea amazing.

    Assuming someone doesn’t already have significant savings how do they live off a low wage job? You seem to always assume that such workers will have adequate savings stashed away.

    So creating lots of low wage jobs doesn’t impress liberals anyway. On some level conservatives like you and Morgan acknowledge this by calling for low wage subsidies or
    ‘auctioning the unemployed.’

    What’s interesting though is that the conservatives are calling for a huge expansion of welfare, their solution is actually having the government subsidize the income of low income workers rather than compelling employers themselves to make up the difference.

    Effectively it’s like giving businesses $15 workers but only making them pay $8 and having the government pay the rest. In this sense the MW is even a more private sector solution than the conservative solution of wage subsidies.

  36. Gravatar of ssumner ssumner
    7. August 2014 at 09:36

    Mike, I think you need a course in logic. I never said the lack of a minimum wage in Germany explains the big fall in their unemployment rate.

    As far as your comment on this post, all I can think is that you completely missed the point. Try reading it again a few more times and maybe you’ll see the point I was making.

  37. Gravatar of Mike Sax Mike Sax
    7. August 2014 at 17:18

    You certainly suggested that no MW was a reason for liberals to be embarassed. Try as you might you can’t deny that you brought up the minimum wage in that piece not me.

  38. Gravatar of Nick Nick
    8. August 2014 at 03:46

    I think prof sumner was saying that no side is particularly reality based when it comes to international comparison. We feel we can import the policies we like and the empirical results will be the same, but the policies we don’t like we tend to feel will have a different effect here in America for political / cultural / social reasons.
    In Germany, young people can get a job … If they put in place a meaningful minimum wage that would likely get harder. Would employment collapse or would employers find a way to fill those job with more productive (likely older) workers at a higher wage? Well that depends on the German collective bargaining process. Probably something in between. Then they could deal with the decrease in youth employment by turning some of the vocational programs into scholarship programs…
    Anyway I think all he was trying to say is that it’s odd to scold and praise other countries on individual political choices just because of a superficial similarity to a political issue in your country. There are a lot of context differences and you are likely to be ignoring the parts that don’t fit your vision.

  39. Gravatar of ssumner ssumner
    8. August 2014 at 04:43

    Mike, Oh, so now it’s that I “brought up” the MW?

    Nick, Very good point.

  40. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    8. August 2014 at 07:18

    Somewhat related (but I don’t expect Mike Sax to understand why);

    http://www.voxeu.org/article/how-immigration-benefits-natives

    ‘… if firms cannot discriminate between natives and immigrants in the search process, but can pay immigrants lower wages (as is the case in the data), then the presence of immigrants drives up the average return from job creation. This encourages firms to create more jobs, some of which will be filled by natives.’

  41. Gravatar of Major.Freedom Major.Freedom
    8. August 2014 at 08:30

    Sumner:

    Mike is usually confused, but in this case I think he is saying you are saying it wasn’t ONLY the Hartz reforms.

    In your pied piper article, you argued that the German jobs “miracle” was the Hartz reforms. In your mind that is the cause, not the absence of minimum wage. So the criticism of Mike’s response is fair. But you did say this:

    “…the Hartz reforms of 2003 sharply reduced the incentive to not work, and sharply increased the incentive to take low wage jobs. As a result, today Germany has lots of very low wage jobs of the type that would be illegal in France or California. (Germany has no minimum wage.)”

    This passage conveys the message that an absence of a minimum wage was also a cause. For consider, if the Hartz reforms took place, but there was a minimum wage law, and it was sufficiently above market, then the German jobs “miracle” would have instead been a “so-so recovery”. The logic here is that the Hartz reforms were a cause, and because there is no minimum wage, wages were free to fall to in combination with Hartz reforms to generate a jobs “miracle.”

    On the other hand, pretty sure we can agree that if the reforms did not take place, then an absence of minimum wage would have still been a cause to reduce unemployment from what it otherwise would have been, but it would have been nowhere near the fall that the reforms made possible.

    An absence of minimum wage laws in your article is presented to the reader as a necessary factor that in combination with the reforms, explains (most of) the jobs improvement. You probably had the reforms in your mind as “the” cause, but because you “brought up” minimum wages, it looks like you are saying it was also a factor.

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