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Deception as the dominant form of neoliberal propaganda bulletin, 2015

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[Dec 21, 2015] Journalists are really mouthpieces for political factions within their own government power structure but the best journalists choose faction that actually embraces reality

"... Regarding Patrick Lang, I noticed that he posted a quite vehement attack against conspiracy theorists postings on his blog who were – if I recall correctly – claiming that the military were involved in the subterfuge to arm extremists in Syria. (Probably cocked up the details but too tired to check.) It struck me as noteworthy as it suggested an internecine intra-Washington struggle between Military / CIA who was going to "own" the debacle in Syria at the very least. It is utterly reminiscent of the struggle between Dulles / CIA power structure (think: institutional group think) and the incoming JFK administration / New Frontiersman during and after the Cuban Missile Crisis. ..."
"... Of course it's worth noting that Hersh had to revert to publishing this "intimate" conversation between American power structures in a foreign publication. What does that tell you about the "freedom index"? Samizdat here we come! ..."
marknesop.wordpress.com

Tim Owen, December 20, 2015 at 1:53 pm

Sy Hersh's latest via M of A:

http://www.lrb.co.uk/v38/n01/seymour-m-hersh/military-to-military

marknesop, December 20, 2015 at 7:58 pm
Washington does not care who assumes power in Syria – whether it be feuding warlords or an Islamic mullah or Assad's cat. Washington knows that Islamic State needs money to survive and keep power, as does any individual or group who will rule, and that to remain in power, it will sell oil. Good enough, as far as Washington is concerned. If the place remains a seething cauldron of destabilizing hatreds, so much the better.
Tim Owen, December 20, 2015 at 8:50 pm
I read this carefully earlier today and wish I had made some notes.

It's an interesting article just in what it says about the politics of American journalism at this point in time almost regardless of the subject matter in a kind of Kremlinology vein. It almost reads like a ransom note. My impression is that Hersh is pulling punches at some key points in order not to overplay his hand.

My suggestion: don't get bogged down in the details. From my recollection of the piece from earlier today Hersh is basically championing a few figures and – most importantly – their perspectives here:

It's worth remembering that Hersh's articles on the Ghoutta attack immediately predated the great stand-down by Obama from all out air-war to destroy Syria.

Given that it's axiomatic that journalists are really mouthpieces for political factions within their own government power structure and that the BEST journalists – like Hersh – actually embrace this reality, what does the appearance of this article augur?

I especially like the sign off:

"The Joint Chiefs and the DIA were constantly telling Washington's leadership of the jihadist threat in Syria, and of Turkey's support for it. The message was never listened to. Why not?"

That sounds kind of threatening. In a good way.

* Regarding Patrick Lang, I noticed that he posted a quite vehement attack against conspiracy theorists postings on his blog who were – if I recall correctly – claiming that the military were involved in the subterfuge to arm extremists in Syria. (Probably cocked up the details but too tired to check.) It struck me as noteworthy as it suggested an internecine intra-Washington struggle between Military / CIA who was going to "own" the debacle in Syria at the very least. It is utterly reminiscent of the struggle between Dulles / CIA power structure (think: institutional group think) and the incoming JFK administration / New Frontiersman during and after the Cuban Missile Crisis.

In other words: we, the west, have basically made no progress fighting for reform of our leadership and political structures. Meanwhile the Russians seem to have gone "right round the horn" – as the dinosaur in Toy Story might put it.

Tim Owen, December 20, 2015 at 9:08 pm
Of course it's worth noting that Hersh had to revert to publishing this "intimate" conversation between American power structures in a foreign publication. What does that tell you about the "freedom index"? Samizdat here we come!

[Dec 16, 2015] Study: Elite scientists can hold back science

Notable quotes:
"... "A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it." ..."
"... Unlike the collaborators, presumably, these newcomers are less beholden to the dead luminaries. They were "less likely to cite the deceased star's work at all," the report states. And they seemed to be making novel advances in science: ..."
"... All this suggest there's a "goliath's shadow" effect. People are either prevented from or afraid of challenging a leading thinker in a field. That or scientific subfields are like grown-up versions of high school cafeteria tables. New people just can't sit there until the queen bee dies. ..."
"... (The authors caution that gatekeeping by elite researchers isn't always a bad thing. "Gatekeeping activities could have beneficial properties when [a] field is in its inception," granting scientists more room to take risks.) ..."
Dec 15, 2015 | www.vox.com

Max Planck - the Nobel Prize–winning physicist who pioneered quantum theory - once said the following about scientific progress:

"A new scientific truth does not triumph by convincing its opponents and making them see the light, but rather because its opponents eventually die, and a new generation grows up that is familiar with it."

Shorter: Science is not immune to interpersonal bullshit. Scientists can be stubborn. They can use their gravitas to steamroll new ideas. Which means those new ideas often only prevail when older scientists die.

Recently, researchers at the National Bureau of Economic Research (NBER) released a working paper - titled, "Does Science Advance One Funeral at a Time?" - that puts Planck's principle to the test.

Sifting through citations in the PubMed database, they found evidence that when a prominent researcher suddenly dies in an academic subfield, a period of new ideas and innovation follow.

The NBER team identified 12,935 "elite" scientists - based on the amount of funding they receive, how many times they've published, how many patents they invented, or whether they were members of the National Academies of Sciences or the Institute of Medicine. Searching through obituaries, they found 452 of these elite researchers died before retirement. Because science leaves a dense paper trail of citations, publish dates, and author bylines, it's (relatively) easy to track changes in publishing patterns after a prominent death.

Here's the pattern: After the unexpected death of a rock-star scientist, their frequent collaborators - the junior researchers who authored papers with them - suddenly see a drop in publication. At the same time, there is a marked increase in published work by other newcomers to the field:

Unlike the collaborators, presumably, these newcomers are less beholden to the dead luminaries. They were "less likely to cite the deceased star's work at all," the report states. And they seemed to be making novel advances in science:

The new articles represent substantial contributions, at least as measured by long-run citation impact. Together, these results paint a picture of scientific fields as scholarly guilds to which elite scientists can regulate access, providing them with outsized opportunities to shape the direction of scientific advance in that space.

All this suggest there's a "goliath's shadow" effect. People are either prevented from or afraid of challenging a leading thinker in a field. That or scientific subfields are like grown-up versions of high school cafeteria tables. New people just can't sit there until the queen bee dies.

What's interesting is that the deaths seemed to hurt the careers of the luminaries' junior collaborators, the ones who frequently co-authored papers with them but not in a senior role. "The death of an elite scientist has a negative and seemingly permanent impact on the productivity of their coauthors," the study reports. They published less, while outsiders flooded the void.

(The authors caution that gatekeeping by elite researchers isn't always a bad thing. "Gatekeeping activities could have beneficial properties when [a] field is in its inception," granting scientists more room to take risks.)

All of this is another example of how progress in science is confounded by human behavior. We see this in so many ways. Scientists lie about results. Or they discount insights derived from failures. Science is so obsessed with the rewards of solving complicated problems that it forgets about the simple ones. The field overwhelmingly is biased toward males (experiments have shown "John" gets more accolades than "Jennifer" with the identical résumé).

It's worth remembering: Science may be a noble discipline based on cold logic and rational observation; but humans are animals fueled by emotion and bias. As the NBER researchers conclude: "[T]he idiosyncratic stances of individual scientists can do much to alter, or at least delay, the course of scientific advance."

[Dec 15, 2015] Noahpinion Academic B.S. as artificial barriers to entry

Notable quotes:
"... And of course, some folks accuse the economics profession of being a front for laissez-faire ideology. ..."
"... Or an entire field, which labored mightily to understand why they missed the second worse crisis in 80 years, only to discover it was for the same reason they missed the worst crisis 80 years ago. ..."
"... It is that economics matter and the nonsense that dominates the discourse, and therefore policy, affects everyone's life. ..."
"... So console yourself that as bad of writers most economist are, their obscurantism is couched in equations so it's harder for the unschooled to ridicule heir papers. ..."
"... A cynical advantage to the increased use or mathematics and mathiness is that the economics field gets to use university math departments to thin the herd just like the engineering field does. Better still, the filter imposed by requiring calculus, statistics and differential equations is not always anticipated: while prospective engineers take AP Calculus and end up in a class where they already know half the material, prospective economists enter Calculus I and flunk out. ..."
"... General Equilibrium, Rational Expectations, Microfoundations, The parculiar definitions of "Rationality" and "Efficiency", Utility Optimization, etc. are all very ideologically driven, and if you do not conform to these standards, you are not accepted within the discipline. I've been told just how completely unreadable Econ papers are, not even talking about the math component, thanks to all of the Jargon. ..."
noahpinionblog.blogspot.com

Paul Romer complains of "mathiness" in macroeconomics. Paul Pfleiderer talks about "chameleon" models. Ricardo Caballero says macroeconomists encourage the "pretense of knowledge". Everywhere, people complain about economists' fetish for pointless model-making.

And of course, some folks accuse the economics profession of being a front for laissez-faire ideology.

...A commenter points out that, as usual, Feynman did this snark way before I did.

Jammer812 10:00 PM

Does it really matter if its obscurantism or tendentious cant that a certain type of of economist engages in (cough, neo Fisherism, cough), and then declare victory, when another prominent economist spend 70 pages to find out that if everyone can do algebra in their heads, it might, just might possibly be true. So lets assume a can opener.. sorry I mean that people can, when experience teaches us that most people can't calculate a 20% tip.

Or on the other side, we have the economist who knows that because they are now accounting for the financial sector their DSGE model is just going to nail it.

Or how about a Noble committee that gives a prize to one economist, whose work is disproved by another economist who shared the prize.

Or an entire field, which labored mightily to understand why they missed the second worse crisis in 80 years, only to discover it was for the same reason they missed the worst crisis 80 years ago.

The difference between critical urban theory, or litcrit, or pomo philosophy or popomo art theory and economics isn't that it is easier for people to make fun . It is that economics matter and the nonsense that dominates the discourse, and therefore policy, affects everyone's life.

So console yourself that as bad of writers most economist are, their obscurantism is couched in equations so it's harder for the unschooled to ridicule heir papers.

Anonymous 1:56 PM

Presumably, no one here would expect a humanities PhD to determine whether an economic theory paper is accurate or useful. Why should the reverse be true?

There may well be advantages to this "obscure" language, in the same way that Bourbaki-esque notation and abstraction is useful in economics. This is communication between experts; the notion that you should be able to understand it most likely reflects a disrespect for the given field itself.

I don't envy any theorist whose primary tool of communication is verbal, but if I were put in that position, you may well expect a complex vocabulary to accompany complex ideas (or even simple ideas, rigorously stated). There may well be problems in the humanities, but we're not qualified to recognize them.

Graham Peterson 4:52 PM

Agree about cartels, but I don't think they're that schematic or conspiratorial. Professors across disciplines really do believe they are contributing to something beyond themselves, to knowledge or truth, and grabbing territory and raising salaries is just a means toward those altruistic ends.

Raising (or guaranteeing) salaries looks to me like an unintended consequence of what is proudly and loudly intended by economists and professors of humanities -- increasing the rigor of analysis. There is just about nobody who disagrees that increasing the rigor of analysis is a bad thing. But how do we do that? By opening up intellectual competition among disciplines, political ideologies, etc., or by constructing evermore elaborate apprentice programs designed to hone already-existing intellectual traditions *within* disciplines, ideologies, etc.?

I can't really see any qualitative difference between increasing the complexity of grammar using any symbolic system, bourbakian notation in mathematics or latinate phrases in English. What's most dangerous for economics is its disregard for empirical observation outside of econometrics. Econometrics, just like theory itself, becomes a theoretical exercise and is subject to all of the same self referential signaling games as high theory is.

Admiring each other's screw drivers isn't any more empirical than admiring each other's theories of how screws secure materials. The point is to turn some screws.

Yamaneko 11:37 PM

A cynical advantage to the increased use or mathematics and mathiness is that the economics field gets to use university math departments to thin the herd just like the engineering field does. Better still, the filter imposed by requiring calculus, statistics and differential equations is not always anticipated: while prospective engineers take AP Calculus and end up in a class where they already know half the material, prospective economists enter Calculus I and flunk out.

... ... ...

Øystein 6:07 PM

You might be interested to learn that the philosopher Jon Elster has drawn an analogy between "hard and soft obscurantism" (econ and critical theory).

Anonymous 9:38 AM

He devotes the last chapter of his book Explaining Social Behavior to this distinction. The whole book is very much worth a read: http://www.amazon.com/Explaining-Social-Behavior-Bolts-Sciences/dp/0521777445

Kain 7:12 PM

I generally agree with your point, except the part where you don't think of Economics as ideologically driven.

http://blog.supplysideliberal.com/post/128894764282/what-is-indoctrination-and-how-is-it-different

"What is indoctrination and how is it different from regular instruction? Indoctrination, suggests Christina Hoff Summers, is characterized by three features, the major conclusions are assumed beforehand, rather than being open to question in the classroom; the conclusions are presented as part of a "unified set of beliefs" that form a comprehensive worldview; and the system is "closed," committed to interpreting all new data in the light of the theory being affirmed.
Whether this account gives us sufficient conditions for indoctrination, and whether, so defined, all indoctrination is bad college pedagogy, may certainly be debated. According to these criteria, for example, all but the most philosophical and adventurous courses in neoclassical economics will count as indoctrination, since undergraduate students certainly are taught the major conclusions of that field as established truths which they are not to criticize from the perspective of any other theory or worldview; they are taught that these truths form a unitary way of seeing the world; and, especially where microeconomics is concerned, the data of human behavior are presented as seen through the lens of that theory. It is probably good that these conditions obtain at the undergraduate level, where one cannot simultaneously learn the ropes and criticize them–although one might hope that the undergraduate will pick up in other courses, for example courses in moral philosophy, the theoretical apparatus needed to raise critical questions about these foundations."

General Equilibrium, Rational Expectations, Microfoundations, The parculiar definitions of "Rationality" and "Efficiency", Utility Optimization, etc. are all very ideologically driven, and if you do not conform to these standards, you are not accepted within the discipline. I've been told just how completely unreadable Econ papers are, not even talking about the math component, thanks to all of the Jargon.

Might be less politically-motivated, but it doesn't necessarily require a particular political viewpoint to be ideologically-motivated.

Dulimbai 7:48 PM

Yo do understand that this is exactly the point? Thomas Kuhn, which knew something about science, basically said that science requires barriers to entry to get amateurs out.

A good explanation can be found here http://lesswrong.com/lw/lr/evaporative_cooling_of_group_beliefs/

Ghyl Tarvoke 8:29 PM

I think here you are giving too much importance to the gatekeeping/economic aspect of the most vacuous outpourings of Critical Theory. My experience as a history MA is that such academics give so little thought to economics and their economic situation that such thoughts rarely enter their minds. However, it probably has had the effect of reducing the intellectual diversity of many subjects, which in the humanities at least is a major shame and a problem.

My theory is more straightforward and it's simple. Don't underestimate people's, even academics (perhaps especially academics), intellectual laziness and the desire to dress up their priors in language that looks 'intellectual' thus making your priors look smart and those who don't share your priors not so smart. In short the popularity of most of Critical Theory is due to the lazy man's guide to enlightenment, making something look intellectually difficult while not really challenging people at all. After all, it is not as if many of the core beliefs of large parts of critical theory once you remove the verbiage are not widespread among certain elements of society. And those elements are massively over represented among people liking to do a BA in literature or anthropology. Why are such beliefs so popular? Well, that's a different and difficult question.

However, I do feel liking pointing out, as others have already alluded to, critical theory and postmodernism have had their day. It peaked in the 90s and belongs to the era of Seinfeld, Grunge, and Triangulation. Now there is a trend towards another ideology, bland progressivism and the fear of giving anything that looks like a controversial opinion. This, at least, is notable in History (I can't speak for literature, in Anthropology pomo is more prevalent but is certainly declining). Some have justified this as 'empiricism', and perhaps it is a needed reaction to what went before, but it is frequently driven by the same intellectual forces I've described above. The difference between Generation Y and the Boomers perhaps. Either way, the gatekeeping aspect is barely part of it.

Tom Warner 2:00 PM

Seems to me anon you are agreeing with the complaint about academic obscurantism: it's the use of an artificial dialect, which only practitioners would invest in learning how to read, to create a false impression of sophistication. The only oddity is you seem inexplicably proud of your fluency in said dialect.

Anonymous 7:55 PM

"Mathematical theory, of the type economists do, is hard to do..."

Such barriers to entry should be erected so as to keep out the math and physics nerds that have destroyed economics.

[Nov 28, 2015] Most of What You Learned in Econ 101 Is Wrong

Greg Mankiw is not a scientist in any meaningful sense. As a member of "Harvard mafia" he is hired propagandist that camouflages as an economist and works for financial oligarchy which promotes neoliberalism. And under neoliberalism like in Marxism the economics serves as a tool to justify social theory.
Notable quotes:
"... Mankiw's book, like every introductory econ textbook I know of, has a big problem. Most of what's in it is probably wrong. ..."
"... But for Econ 101 classes, explaining only a small slice of reality isn't good enough. If economics majors leave their classes thinking that the theories they learned are mostly correct, they will make bad decisions in both business and politics. We shouldn't train tomorrow's business elite to have faith in theories that have only a small amount of empirical success. ..."
"... Current textbooks, including Mankiw's, almost all play down the role of data and evidence. ..."
"... so basically all the supply siders and libertarians and the like are preaching the same sort of economics theories that were taught prior to Keynes ..."
"... yea maybe we should call the supply siders the flat earthers ..."
"... Not every economic class is taught using Mankiw. Thankfully. ..."
"... but there is also the issue of whether in reality the employee could survive on the given wage if the pay does not allow the worker to survive, then him/her agreeing to work for the less than living wage doesn't help ..."
"... It is not a viable situation. The workers will not be able to perform their duties. It will not work anyway. We didn't treat horses this way, as if their cost could approach zero without consequences, why do we treat people as if they could survive on less and less resources with no limit. ..."
"... Then if they don't accept that impossible situation and ask for help from the government or form unions, then they are the ones "causing all the problems" ..."
"... How about this? A $15 minimum raise hike is more likely to close down jobs in the mid wage category than in the low wage. A hike probably means income will come from the mid overall to the low overall because low wage produced goods were relatively under priced (not marked to market because of prior monopsony). ..."
Bloomberg View

Harvard's Greg Mankiw, author of the most popular college introductory economics textbook, is often regarded as America's econ teacher. He famously refers to his "Principles of Economics" as "my favorite textbook," and I must admit that it's also my favorite. It's written in a clear, explanatory style and covers the basics of most important theories in modern economics.

But Mankiw's book, like every introductory econ textbook I know of, has a big problem. Most of what's in it is probably wrong.

In the last three decades, the economics profession has undergone a profound shift. The rise of information technology and new statistical methods has dramatically increased the importance of data and empirics. This means that many professional economists are no longer, as empirical pioneer David Card put it, "mathematical philosophers." Instead, they are more like scientists, digging through mountains of evidence to find precious grains of truth.

And what they have found has often been revolutionary. The simple theories we teach in Econ 101 classes work once in a while, but in many important cases they fail.

For example, Econ 101 theory tells us that minimum wage policies should have a harmful impact on employment. Basic supply and demand analysis says that in a free market, wages adjust so that everyone who wants a job has a job -- supply matches demand. Less productive workers earn less, but they are still employed. If you set a price floor -- a lower limit on what employers are allowed to pay -- then it will suddenly become un-economical for companies to retain all the workers whose productivity is lower than that price floor. In other words, minimum wage hikes should quickly put a bunch of low-wage workers out of a job.

That's theory. Reality, it turns out, is very different. In the last two decades, empirical economists have looked at a large number of minimum wage hikes, and concluded that in most cases, the immediate effect on employment is very small. It's only in the long run that minimum wages might start to make a big difference.

That doesn't mean the theory is wrong, of course. It probably only describes a small piece of what is really going on in the labor market. In reality, employment probably depends on a lot more than just today's wage level -- it depends on predictions of future wages, on long-standing employment relationships and on a host of other things too complicated to fit into the tidy little world of Econ 101.

For academic economists, that's no problem. If existing theories explain only a sliver of reality, they simply roll up their sleeves and get to work. Many labor economists are now working on complex theories that model the process of employees looking for work and employers looking for people to hire. For professional theorists, empirical failures simply mean more work to do.

But for Econ 101 classes, explaining only a small slice of reality isn't good enough. If economics majors leave their classes thinking that the theories they learned are mostly correct, they will make bad decisions in both business and politics. We shouldn't train tomorrow's business elite to have faith in theories that have only a small amount of empirical success.

Another example is welfare. Econ 101 theory tells us that welfare gives people an incentive not to work. If you subsidize leisure, simple theory says you will get more of it.

But recent empirical studies have shown that such effects are usually very small. Occasionally, welfare programs even make people work more. For example, a study in Uganda found that grants for poor people looking to improve their skills resulted in people working much more than before.

This has big political implications. If we train tomorrow's business elites to think that welfare encourages laziness, they may block support for policies that really improve the lives of the poor -- and the economic productivity of the whole nation. But this is precisely what Econ 101 is now doing.

So what's the solution? Complex theories sometimes do a better job of explaining reality than simple ones, but these theories are way beyond the mathematical skill of most undergrad econ majors. A better alternative is to start teaching empirics in 101.

Current textbooks, including Mankiw's, almost all play down the role of data and evidence. They sometimes refer to the results of empirical studies, but they don't give students an in-depth understanding of how those studies worked. Yet this wouldn't be very hard to do. The kind of empirical analysis now taking over the econ profession -- often called the "quasi-experimental" approach -- isn't that hard to understand. Simple examples could even be done in the classroom, or as homework assignments.

In other words, the economics profession has gotten real, and it's time for Econ 101 to do the same. We now have an academic economics profession focused on examining evidence and an Econ 101 curriculum that focuses on telling pleasant but often useless fables. Econ education needs to get with the times.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:

Noah Smith at [email protected]

Selected Skeptical Comments (Economist View, November 25, 2015)

Anonymous said... Wednesday, November 25, 2015 at 05:34 AM

"Most of What You Learned in Econ 101 Is Wrong"

To this crowd, it should be - Most of what we taught you in Econ 101 is Wrong.

djb -> Peter K....

from the smith article

"For example, Econ 101 theory tells us that minimum wage policies should have a harmful impact on employment. Basic supply and demand analysis says that in a free market, wages adjust so that everyone who wants a job has a job -- supply matches demand."

if this is what they are teaching in econ 101 then of course it is wrong and I would not be surprised if mankiws book is teaching this

as Keynes showed 80 years ago

so basically all the supply siders and libertarians and the like are preaching the same sort of economics theories that were taught prior to Keynes

Say's law, invisible hand, always at full employment, no such thing as involuntary unemployment, no possibility of inadequate aggregate demand

amazing

Peter K. -> djb...

Agreed. I would divide the world into the Keynesians and supply siders. Mankiw is a strange hack in that he gets the "new Keynesian" view but often puts out propaganda on behalf of the supply siders.

Anonymous, Kervick and their ilk argue that some Keynesians are just as bad as the supply siders.

But they have no grounds.

pgl -> Peter K....

It is more than the macroeconomic debates. The minimum wage debate comes down to whether all markets are perfectly competitive. Any economist worth his salt realizes that they are not.

Dan Kervick -> Peter K:

Not sure what that means exactly - since I don't know what kinds of supply siders you are talking about. But since Mankiw is one of the leading figures of New Keynesianism, and is pretty bad, then yeah .. I guess it follows that some Keynesians are as bad as supply siders.

Keynes suggested a social philosophy that followed from his economic analysis. The social philosophy was based on the idea that the lack of full employment and arbitrary and inequitable distributions of income were "faults" of our economic society - bad things. But if someone doesn't think those are bad things, then I suppose they could completely accept Keynes's analysis of how the economy works, but not go in for the Keynesian social philosophy and the policy choices it leads to.

anne said in reply to Dan Kervick...

Keynes suggested a social philosophy that followed from his economic analysis. The social philosophy was based on the idea that the lack of full employment and arbitrary and inequitable distributions of income were "faults" of our economic society...

[ Nice passage. ]

William said in reply to djb...

Imagine if other courses were taught like econ.

History would start with reading Herodotus as fact, flat earth, giant ants and all.

Psychology 101 would teach you only the ideas of Freud. Sure none of his ideas are taken seriously anymore, but he is easy to understand and the foundation of modern, complex theories, so it's all good right?

djb said in reply to William...

yea maybe we should call the supply siders the flat earthers

pgl said in reply to William...


Not every economic class is taught using Mankiw. Thankfully.

pgl said in reply to djb...

Noah really wrote this? "That doesn't mean the theory is wrong, of course. It probably only describes a small piece of what is really going on in the labor market. "

Noah needs to take a time out from blogging until he reads Dani Rodrik's Economist Rules. Dani notes we have lots of theories but the real trick is to figure out which one to use for a particular situation.

I have not looked at a Mankiw text for a long time (overpriced from an arrogant Harvard Republican homeboy) so I don't know if he only presents the perfectly competitive model of employment. If he does - no wonder his book is so clueless on the minimum wage debate.

When I took undergraduate principles, I read Paul Samuelson's excellent book and it did talk about things like monopsony power. Put a wage floor on a monopsonist and employment rises.

So the real issue is are we presenting students with the full array of models and then having them read Dani's excellent book.

djb said in reply to pgl...

one issue regarding minimum wages issues. The classical school says if only the person would work for less we would have full employment

(Keynes proved this false)

but there is also the issue of whether in reality the employee could survive on the given wage if the pay does not allow the worker to survive, then him/her agreeing to work for the less than living wage doesn't help

It is not a viable situation. The workers will not be able to perform their duties. It will not work anyway. We didn't treat horses this way, as if their cost could approach zero without consequences, why do we treat people as if they could survive on less and less resources with no limit.

Then if they don't accept that impossible situation and ask for help from the government or form unions, then they are the ones "causing all the problems"

but seriously, that is what the theoretical idea that workers should take less and less and less with no limit gives us in reality

Denis Drew, November 25, 2015 at 07:14 AM

Re: Most of What You Learned in Econ 101 Is Wrong - Noah Smith

How about this? A $15 minimum raise hike is more likely to close down jobs in the mid wage category than in the low wage. A hike probably means income will come from the mid overall to the low overall because low wage produced goods were relatively under priced (not marked to market because of prior monopsony).

Consumers tend to purchase more of goods produced by employees at their own wage level. Ergo, when income flows overall from the mid to the low -- the low may spend that new money disproportionately among themselves. While some mid wage producers will lose out on business gone south and be forced to lay off workers.

Easy way to make this loss from mid to low painless as possible: hybrid redistribution via tax hikes for the (really) top with matching tax cuts for the mids.

I am thinking (just to throw something out) 90% taxes on all income over $2 million dollars. Maybe 50% over $650,000 (the entry to the top 1%?).

Under the theory that people will enthusiastically work for $200 a week if that is the best their economic place and time can do -- but the same people will not work for $400 a week if their era could and should be paying $800.

I'm thinking grossly underpaid Chicago retail clerk ($800 a week by collective bargaining marked to market) and Chicago gangs which now have 100,000 out of my guesstimate 200,000 gang-age, minority males. I'm also thinking old American born taxi drivers like myself who wont work 60 grueling hours for $500 a week (I did for $750). I'm thinking family raising adults who no longer show up for two-tier (thanks to Walmart) contract supermarket work.

Today's time and US place CEOs, professional athletes (who basically just retain feral animal skills), TV news anchors and movie stars earn 20 times what their 50s and 60s predecessors did -- they can certainly pay similarly high tax rates (though not from as low a starting point -- double per capita income in this era). They will work just as hard once they get used to the new (hybrid) redistribution regime representing the most anybody can squeeze out of their era.

PPaine said in reply to PPaine ...

Brad Delong is the iconic merit elite culprit. Why? Larry S and Stan fish cake are handsomely rewarded. Plutonian über hacks . Brad is flying solely on merit fumes

Peter K. said in reply to PPaine ...

If DeLong has been listened to the recovery would have been much better.

Both he and Summers argue policymakers have squandered one year's worth of GDP. That's a damning statement. They're on the job class side more than not. Same with Krugman and Thoma.

"As well they should. U.S. output is now about 10 percent below a trend estimated through 2007. If one attributes even half of this figure to the effects of recession and assumes no catch up on this component until 2030, the cost of the financial crisis in the U.S. is about one year's gross domestic product. And matters are worse in the rest of the industrial world.

As macroeconomics was transformed in response to the Depression of the 1930s and the inflation of the 1970s, another 40 years later it should again be transformed in response to stagnation in the industrial world.

Maybe we can call it the Keynesian New Economics."

https://www.washingtonpost.com/news/wonk/wp/2015/11/03/larry-summers-advanced-economies-are-so-sick-we-need-a-new-way-to-think-about-them/

They're not like Varoufakis and Zizek but so what there will be a broad coalition.

http://yanisvaroufakis.eu/2015/11/24/europe-is-kaputt-long-live-europe-royal-festival-hall-woth-slavoj-zizek-julian-assange/

[Nov 15, 2015] Machiavelli claim that in politics no one knows who you are but how you appear

Notable quotes:
"... More obviously, it's about "the discerning few" (as the editors of one edition of The Prince say in a footnote) versus the gullible many. ..."
crookedtimber.org
from the OP:

This shift from the visually immediate to the distant and the abstract-one can see it in Machiavelli's claim that in politics, no one knows who you are but how you appear; in Hobbes's notion of the Leviathan-would be a recurring theme in Wolin's analysis

Interesting. That Machiavelli line ("everyone sees how you appear, few touch what you are") could be read that way. More obviously, it's about "the discerning few" (as the editors of one edition of The Prince say in a footnote) versus the gullible many.

Anyway, v. nice post.

[Sep 14, 2015] mainly macro Media myths by Simon Wren-Lewis

Sep 11, 2015 | mainlymacro.blogspot.com
At first sight the research reported here is something that only political science researchers should worry about. In trying to explain election results, it is better to use 'real time' data rather than 'revised, final or vintage' data. But as the authors point out, it has wider implications. Voters do not seem to respond to how the economy actually is (which is best measured by the final revised data), but how it is reported to be. (This does not just matter for elections: here is a discussion of some other research which suggests how the way recessions are reported can influence economic decisions.)

Just one more indication that the media really matters. I would not bother to report such things, if this point was generally accepted as an obvious truth. That it is not, in the UK at least, reflects various different tendencies. Those on the right know that the print media is heavily biased their way, and that this has a big impact on television, so they have an interest in denying that this matters (while funding think tanks whose job is in part to harass the BBC about its alleged left wing bias). Those on the centre left often react negatively to a few of those further left who discount all awkward facts by blaming the media. And the media itself is very reluctant to concede its own power.

As an example, here is Rafael Behr in the Guardian talking disapprovingly about Labour supporters:

"I heard constant complaints about failure to "challenge myths" about the economy, benefits, immigration and other areas where Labour is deemed unfit to govern by the people who choose governments. The voters are wrong, and what is required is a louder exposition of their wrongness."

What is really revealing about this paragraph is what is not there. We go straight from myths to voters, as if no one else is involved. I doubt very much that many who voice the 'constant complaints' Behr is talking about think that voters created and sustained these myths all by themselves.

The discussion of issues involving the economy, the welfare system and immigration among most of the 'political class' is often so removed from reality that it deserves the label myth. In the case of the economy, I provided chapter and verse in my 'mediamacro myth' series before the election. It was not just the myth that Labour profligacy was responsible for austerity, but also the myth about the 'strong recovery' when the recovery was the weakest for at least a century, and that this recovery had 'vindicated' austerity. Given the importance that voters attach to economic credibility, I do not believe I was exaggerating in suggesting that the mediamacro myth was in good part responsible for the Conservatives winning the election.

The media is vital in allowing myths to be sustained or dispelled. That does not mean that the media itself creates myths out of thin air. These myths on the economy were created by the Conservative party and their supporters, and sustained by the media's reliance on City economists. They get support from half truths: pre-crisis deficits were a little too large, GDP growth rates for the UK did sometimes exceed all other major economies.

Myths on welfare do come from real concerns: there is benefit fraud, and it is deeply resented by most voters. But who can deny that much of the media (including the makers of certain television programmes) have stoked that resentment? When the public think that £24 out of every £100 spent on benefits is claimed fraudulently, compared with official estimates of £0.70 per £100, that means that the public is wrong, and we have a myth. (An excellent source for an objective view of the UK's welfare system is John Hills' book, which has myth in its subtitle) As I noted in that post, when people are asked questions where they have much more direct experience, they tend to give (on average of course) much more accurate answers. Its when they source the media that things can go wrong. It is well known that fears about immigration tend to be greatest where there is least immigration.

Of course reluctance to acknowledge myths may not be denial but fatalism. Fatalism in believing that voters will always believe that migrants want to come to the UK because of our generous benefit system because it suits their prejudices. Encouraging those beliefs will be in the interests of what will always be a right wing dominated press. Some argue that myths can only be changed from a position of power. But myths are not the preserve of governments to initiate. According to this, over 60% of Trump supporters think their president is a Muslim who was born overseas. [1]

Myths need to be confronted, not tolerated. The initial UK media coverage of the European migrant crisis played to a mythical narrative that migrants were a threat to our standard of living and social infrastructure (to quote the UK's Foreign Secretary!). This reporting was not grounded in facts, as Patrick Kingsley shows. That changed when reporters saw who migrants really were and why they had made the perilous journey north. It changed when Germany started welcoming them rather than trying to build bigger fences. These facts did not fit the mythical narrative.

The UK government was clearly rattled when it realised that many people were not happy with their narrative and policies. Myths can be challenged, but it is not easy. Policy has been changed somewhat, but attempts are also being made to repair the narrative: to take some of those who have made it to the EU will only encourage more (a variant of the previous European policy of reducing the number of rescue boats), and a long term solution is to drop more bombs. Such idiotic claims need to be treated with contempt, before they become a new myth that the opposition feels it is too dangerous to challenge. Challenging these myths does not imply pretending real voter anxieties about migration do not exist, but grounding discussion and policy around the causes of those anxieties rather than the myths they have spawned.

Yes, the non-partisan media needs to recognise the responsibility they have, and use objective measures and academic analysis to judge whether they are meeting that responsibility. But more generally myths are real and have to be confronted. The biggest myth of all is that there are no myths.

[Aug 30, 2015] What Would Machiavelli Do The Big Lie Lives On by Thom Hartmann

August 26, 2004 | CommonDreams.org

There is nothing new about the Swift Boat ads.

German filmmaker Fritz Kippler, one of Goebbels' most effective propagandists, once said that two steps were necessary to promote a Big Lie so the majority of the people in a nation would believe it. The first was to reduce an issue to a simple black-and-white choice that "even the most feebleminded could understand." The second was to repeat the oversimplification over and over. If these two steps were followed, people would always come to believe the Big Lie.

In Kippler's day, the best example of his application of the principle was his 1940 movie "Campaign in Poland," which argued that the Polish people were suffering under tyranny - a tyranny that would someday threaten Germany - and that the German people could either allow this cancer to fester, or preemptively "liberate" Poland. Hitler took the "strong and decisive" path, the movie suggested, to liberate Poland, even though after the invasion little evidence was found that Poland represented any threat whatsoever to the powerful German Reich. The movie was Hitler's way of saying that invading Poland was the right thing to do, and that, in retrospect, he would have done it again.

The Big Lie is alive and well today in the United States of America, and what's most troubling about it is the basic premise that underlies its use. In order for somebody to undertake a Big Lie, they must first believe Niccolo Machiavelli's premise (in "The Prince," 1532) that the end justifies the means.

Hitler, after all, claimed to have based everything he did on the virtuous goal of uniting Europe - and then the world - in a thousand-year era of peace, foreshadowed in the Bible. If you believe that a thousand years of peace is such a noble end that any means is justified to reach it, it's a short leap to eugenics, preemptive wars, torture of dissidents and prisoners, and mass murder.

Believing that the end justifies the means is the ultimate slippery slope. It will ultimately kill any noble goal, because even if the goal is achieved, it will have been corrupted along the way by the means used to accomplish it.

In fiction, it's the story of Mary Shelley's good Doctor Frankenstein's attempt to conquer mortality, of Darth Vader's misuse of the Force, and of the tragic consequence of the inquisitive Dr. Jeckyll's attempt to understand good and evil going tragically wrong when, as Robert Louis Stevenson notes, he wrote, "I had gone to bed Henry Jekyll, I had awakened Edward Hyde."

In real life, it's the story of the many tinpot dictators around the world who quote Jefferson while enforcing a brutal rule, of power industry executives pushing for lax mercury rules to "help the American economy," of the legion of lobbyists who work daily to corrupt democracy in the good name of GMOs, pharmaceuticals, and the insurance industry (among others).

Gandhi, Jesus, and Buddha all warned us about it, as did Tolstoy, Tolkien, Hemmingway, and Kafka.

Be it "small sins" like Nader getting into bed with Republicans to get on state ballots, or "big sins" like George W. Bush repeatedly asserting that he had to invade Iraq because of WMDs and because Saddam "threw out the weapons inspectors" (something Saddam never did - inspectors were removed by Clinton in 1998 and by Bush in 2003), trying to accomplish a "good" by using the means of an "evil" like a Big Lie inherently corrupts the good.

Now the Bush campaign and its allies are encouraging a new series of Big Lie techniques to assail John Kerry's Vietnam War record. With a smug assurance of damage done to the enemy, George W. Bush refused to address specifically the misrepresentations in the ads, and called for "the end of all 527s," a goal he cynically knows unachievable in this election cycle.

Defenders of the Bush campaign are overrunning the media, trying to imply equivalence between the Swift Boat ads and the many "attack" ads run by anti-Bush 527 organizations over previous months. But the Bush campaign has never disputed the truthfulness of charges against him (loss of jobs, ruinous Iraq policy, environmental despoliation, etc.) in previous 527 ads.

Thus, there is no equivalence between the MoveOn (and other) ads and the Swift Boat ads, moral or otherwise. Truths and issues - however unpleasant - cannot be weighed on the same scale as lies and character assassination, explicit or implicit.

This is why the Kerry campaign is not complaining about attacks per se - those are to be expected in politics - but about Big Lie techniques used in these particular attacks. Techniques, interestingly enough, that have an uncanny resemblance to character smears used by the Bush family against Michael Dukakis in 1988, against Ann Richards in 1994, against John McCain in 2000, and against Max Cleland in 2002.

Lee Atwater, on his deathbed, realized that the "ends justifies the means" technique of campaigning he had unleashed on behalf of the Bush family was both immoral and harmful to American democracy.

"In 1988, fighting Dukakis, I said that I 'would strip the bark off the little bastard' and 'make Willie Horton his [Dukakis'] running mate,'" Atwater said. "I am sorry for both statements: the first for its naked cruelty, the second because it makes me sound racist, which I am not. Mostly I am sorry for the way I thought of other people. Like a good general, I had treated everyone who wasn't with me as against me."

But Atwater's spiritual and political protégé, Karl Rove, soldiers on. Big Lies are emerging from Bush allies with startling regularity, and old Big Lies are being resurrected almost daily, most on right-wing talk radio.

The most alarming contrast in the election of 2004 isn't between the conservative Bush and liberal Kerry. It's between those who will use any means to get and hold power, and those who are unwilling to engage in the Big Lie.

History tells us that, over the short term, the Big Lie usually works. Over the long term, though, the damage it does - both to those who use it, and to the society on which it is inflicted - is incalculable.

Thom Hartmann (thom at thomhartmann.com) is a Project Censored Award-winning best-selling author and host of a nationally syndicated daily progressive talk show. www.thomhartmann.com His most recent books are "The Last Hours of Ancient Sunlight," "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights," "We The People: A Call To Take Back America," and "What Would Jefferson Do?: A Return To Democracy."

Continued

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