The real problem with Nate Silver's attack on Paul Krugman
By DYLAN BYERS, Politico
3/27/14 11:48 AM EDT
Nate Silver took a not-so-veiled shot at his former New York Times colleague Paul Krugman on Wednesday, suggesting — through some tongue-in-cheek empirical analysis — that the columnist had taken a more critical attitude to Silver following his move to ESPN.Now the truth is I haven't been to FiveThirtyEight so I have no idea whether any of this is true or not. I remember poblano as a pretty mild and even-tempered guy unless you started messing with his data.
"Mr. Krugman’s views of FiveThirtyEight have changed since it re-launched March 17 under the auspices of ESPN," Silver wrote. "To be sure, the difference in Mr. Krugman’s views could reflect a decline in quality for FiveThirtyEight. The web site has brought on almost two dozen new employees and contributors. And it has expanded its coverage beyond politics into sports, economics and other areas."
The problems with Silver's attack are manifold: One, it's petty. Two, it's snarky. Three, it's self-centered. Four, it eschews objectivity in favor of personal gripes. Five, it uses data to infer, rather than deduce: Silver suggests Krugman has become a critic because Silver is no longer at the Times. He might pause to wonder if the shift in tone is due, at least in part, to the fact that Silver spent a year hyping up a site that has yet to live up to expectations, and that, in the meantime, he badmouthed columnists like Krugman as "worthless."
Silver doesn't care about being first or breaking news — fine, he doesn't need to. But he needs to at least be relevant. So far, Silver's site has achieved relevancy just twice — once with his March Madness picks, which were largely useless, the second time with his Senate predictions, which reportedly scared the bejeezus out of Democrats. But aside from these "events," there is little reason to check in with FiveThirtyEight on a daily basis, unless you're an adoring fan.
As nearly as I can figure Herr Doktor Professor's (who I do read every day) main criticism is that the Fox/Hedgehog analogy is inapt because poblano's entire history and fame rests on the fact he's a Hedgehog who endlessly repeats his one big truth which is that the data is what it is, something that's completely in line with my interactions with him here (not that there were many).
To disclose my personal bias, I recently wrote this-
I have my disagreements with...Now I strongly suspect Herr Doktor Professor and I have very serious disagreements "about modern banking and the money supply", but he was quite polite to me when he signed my copy of his book and I told him I had studied Samuelson. I leave it for you to decide if his attitude toward poblano has changed.
Herr Doktor Professor and normally when I do I focus on other economists who understand the problem more clearly or are mor forceful in their expression. In today's piece I don't disagree with this-The case for stimulus was that we were suffering from a huge shortfall in overall spending, and that the hit to the economy from the financial crisis and the bursting of the housing bubble was so severe that the Federal Reserve, which normally fights recessions by cutting short-term interest rates, couldn’t overcome this slump on its own. The idea, then, was to provide a temporary boost both by having the government directly spend more and by using tax cuts and public aid to boost family incomes, inducing more private spending.Indeed D.C. is still in the thrall of freshwater monitarists who have been constantly and consistently wrong for 40 years to the exclusion of all competing points of view and the only solutions considered by either party have such low multiples as to be almost entirely ineffective.
Opponents of stimulus argued vociferously that deficit spending would send interest rates skyrocketing, “crowding out” private spending. Proponents responded, however, that crowding out — a real issue when the economy is near full employment — wouldn’t happen in a deeply depressed economy, awash in excess capacity and excess savings. And stimulus supporters were right: far from soaring, interest rates fell to historic lows.
So why does everyone — or, to be more accurate, everyone except those who have seriously studied the issue — believe that the stimulus was a failure? Because the U.S. economy continued to perform poorly — not disastrously, but poorly — after the stimulus went into effect.
But that’s all water under the bridge. The important point is that U.S. fiscal policy went completely in the wrong direction after 2010. With the stimulus perceived as a failure, job creation almost disappeared from inside-the-Beltway discourse, replaced with obsessive concern over budget deficits. Government spending, which had been temporarily boosted both by the Recovery Act and by safety-net programs like food stamps and unemployment benefits, began falling, with public investment hit worst. And this anti-stimulus has destroyed millions of jobs.
In other words, the overall narrative of the stimulus is tragic. A policy initiative that was good but not good enough ended up being seen as a failure, and set the stage for an immensely destructive wrong turn.
Fiscal policies work to increase demand and economic activity. Monetary policies don't work except to contain inflation. Period.
Moreover Herr Doktor Professor argues that these conditions apply only at low interest rates (zero lower bound) and that money can be created only through the Federal Reserve action (demonstrably false, a Department store can create money), but this is not a discussion of MMT.
The Shrill One has consistently argued, against steadfast and vociferous criticism, for fiscal not monitary policy action and for actions with higher economic multipliers. I don't have his back, but I think he deserves a little credit for that.
We can educate him about modern banking and the money supply later.
In the mean time we could do (and have done) worse with our policy decisions than to bury Mason Jars of currency in abandoned coal mines and let companies bid for the rights to do that and pay people to do that and other companies bid for the rights to dig them up and pay people to do that too.
Or as Atrios suggests we could just give everyone some free money which has less impact on the environment.
The point is that "stimulative" action should be stimulative and not just encourage the coupon cutting class to sit on their stash and persue asset bubble after asset bubble.
The problem is inequality.
* Math Is Hard November 4, 2012, 3:08 pm
* Trivial Stakes November 6, 2012, 5:29 pm
* The Real Real America November 7, 2012, 2:08 am
* Power-Mad Conservatives November 7, 2012, 7:08 pm
* Deficit Hawks Down — Please November 8, 2012, 9:00 pm
* Unqualified November 10, 2012, 4:19 pm
* The 2012 Election, Reenacted November 21, 2012, 5:28 pm
* The Stiffs and the Players November 27, 2012, 7:23 am
* Notes on Epistemic Closure November 30, 2012, 7:30 pm
* The Non-Surge in Government Spending January 22, 2013, 5:00 pm
* Nate Silver, Superstar August 5, 2013, 6:40 am
* Sergeant Friday Was Not A Fox March 18, 2014, 7:55 am
* Further Thoughts on Hedgehogs and Foxes March 18, 2014, 4:15 pm
* Tarnished Silver March 23, 2014, 10:48 am
* Data as Slogan, Data as Substance March 26, 2014, 1:00 pm
I'm actually far more concerned that poblano's science guy is a climate change denialist.
Not that Jon will talk about any of that.
Anyway, next week (when I'll be if anything even more distracted and sleep deprived) we have-
The Daily Show
The Colbert Report
To me the prime opportunities are Tuesday (if you like being someone weird) and Wednesday (if you like saying "Motherfucker" a lot), but as always any day is open for your contribution.