As we move to headlines beyond Boston and Texas, the past week will also be remembered in political and economic circles for the spreadsheet snafu heard ‘round the world, the debunking of a sacred formula advanced by Paul Ryan and all the other austerity hawks who have been trying for years to sell the nonsensical notion that we can cut our way to prosperity.
It will be a week when the nerds fought back and won a round or two. More below the fold.
Two respected economists, Carmen Reinhart and Ken Rogoff (already famous for their precise analysis of the 2008 crash), overreached in a 2010 paper that claimed there was a proven numerical link between high government debt and slow economic growth. Critics scoffed at the notion of such an exact global threshold. After all, they reminded us, recessions, like countries, are not created equal. But that criticism was no match for a message that was tailor made for Fox News, AM radio and politicians eager to do the lazy work of slashing budgets rather than fighting deficits with a balanced mix of cuts and investments.
This week, a new paper, using the original Reinhart-Rogoff data, showed how the 2010 study contained flawed data and questionable assumptions. National debt at 90 percent of GDP did not actually lead to economic shrinkage. It may have been a convenient benchmark for conservatives, but it was not a valid one.
The political horses have unfortunately already been out of the barn for over two years on this point, and Tea Partiers rode those ponies far and wide, never pausing to double check their work and question whether it might be the other way around, that our debt cannot be contained so long as austerity is starving our economic horsepower. It’s fair to say the Tea Party is now flogging a dead horse: austerity measures have hurt Europe’s recovery more than they’ve helped, and austerity’s American cousin, the sequester, continues to bleed jobs even as conservatives want to apply more leaches.
It’s going to take years to un-do the damage, but at least we have a more honest view of the budgetary landscape. We’re trying to keep the numbers honest closer to home, as well.
Wisconsin’s wrecking crew, however, got caught in another example of trumpeting numbers that aren’t really there. The right wing MacIver Institute in Madison was called out this week by fact checkers for falsely claiming Governor Walker had created 137,372 jobs. The scientifically accurate total of new private sector job growth is closer to half that amount and still woefully short of his campaign promise as Wisconsin lags behind nearly every other state.
Saying the world is flat, no matter how loudly it’s said in so many well-produced political ads, does not make it so. Whether touting rigged employment numbers or doctoring a spreadsheet to justify a failing ideology, those stubborn facts will eventually find a way to expose the rigging, the doctoring and the slick salesmanship. It’s only a question of whether the right numbers reach the surface in time to say, “here, try this,” or “see, we told you so.”
Honest numbers are genuine tools best trusted to the real craftsmen of political policy. The right balance of public debt versus public investments creates jobs and improves our schools. The right size of government provides valuable services without bloat from being too big or neglect from being too small. But we cannot find the right numbers if some politicians and hucksters are willing to play fast and loose with them to force a preordained result.
Those, frankly, are the kinds of tools we can do without.