Follow up: "When consequences are bad"

Chapter 2

The Reinhart-Rogoff analysis has set off a firestorm, at least among “insiders,” and that's a problem in and of itself. The real question for most of us who are not economists, statisticians or think tank specialists is will there be some positive outcome as a result of this uproar?

The only truthful response is that it's hard to say at this point in time. In America at least, most of us, rich and poor, have been uncomfortable talking about “class war.” It has however been the monster in the closet or the crazy aunt in the attic for most of our history, especially after the Civil War ended in 1865.

Paul Krugman in a recent NYT article (The 1 Percent's Solution) said that, “What, after all, do people want from economic policy? The answer, it turns out, is that it depends on which people you ask.”

There have been a flurry of articles about Reinhart-Rogoff. Jared Bernstein, a well known economist currently at the Center on Budget and Policy Priorities, in a recent article in Salon (How to prevent future Reinhart-Rogoff melt downs) said—without actually saying it—that economics is not real science. No it's not and never has been. For those interested in learning more about the Reinhart-Rogoff analysis and what it means from the arcane to the general see 'Additional Reading.'

What have we learned

This story, like so many others, is really about that we all have some responsibility for what happened. Of course we ought to develop a keener skepticism about what “experts” claim (far different from cynicism), demand better informed journalists and commentators, demand a more rigorous intellectual process in the field of economics, demand that public officials have a degree of integrity and knowledge and ultimately demand a citizenry (at least a significant portion) that is not so uninformed and disinterested as to be mere impediments to change. This story will continue (globally) for some time to come.

Additional Reading:

the numbers

Reinhart and Rogoff:Responding to Our Critics

Reinhart/Rogoff and Growthin a Time Before Debt

Comparing the Two Analyses

in general

There's no need for all thiseconomic sadomasochism

How much unemployment didReinhart and Rogoff's arithmetic mistake cause?

Rogoff and Reinhart should show some remorse and reconsider austerity