The Economic Troika Seems Confused
Posted: November 28, 2010 Filed under: U.S. Economy | Tags: joseph stiglitz, Mark Thoma, Obama and Unemployment, Paul Krugman 42 Comments
There are three economists that I read almost every day because I share a lot in common with their value system and their approach to the subject area. That would be Brad DeLong, Paul Krugman, and Mark Thoma. The three are probably the most visible group of liberal economists on the web with the exception of Joseph Stiglitz. All three of them just don’t seem to get why President Obama does what he does given that he said what he said during the election.
Now I admit to being a relative newcomer to academia compared to these three. I’m old and will never garner the prestige they’ve achieved. I spent most of my career in financial institutions and the FED so maybe that’s where the difference comes. I don’t know. But all three of them were on the same track today and the centralized blog theme began on Thoma’s Economist’s View where the topic germinated.
Is giving some one an overly generous portion of the benefit of the doubt something that liberals academics do? I’m beginning to wonder. All this year, the troika appeared to be baffled by the continuing not democratic, not progressive/liberal, and not wise economic policy coming out of the District. Did they listen to the same presidential primary debates that I listened to? Did they watch the appointments of folks like Austin Goolsbee and just miss something? Is it just me?
From the keyboard and fingers of Mark Thoma comes a series of not so rhetorical questions and a thought. The title of the thread is The Administration’s “Communication Problem”.
I find it incredible and disturbing that on the eve of the recent election in which Democrats got trounced, the administration was still trying to figure out if the unemployment problem is structural or cyclical.
Chiming in with a reply–even quoted by Thoma–is Delong. (They all obviously read each other too.) He titled his thread ‘Mark Thoma Watches Barack Obama and His Political Advisors Go Off Message Yet Again…Can we please get the White House back on message?’
Okay, so now we come full circle as Paul Krugman also responds to Thoma with his NYT blog and this title: Lacking All Conviction.
“Now”, I thought as I braced for the read, “we might be getting a little closer to the true source of this ‘communication’ or ‘message’ problem.” But, Krugman’s take on the meeting was concern that POTUS is just getting bad advice. I’m going to bold Krugman’s relevant assertion.
What I want to know is, who was arguing for structural? I find it hard to think of anyone I know in the administration’s economic team who would make that case, who would deny that the bulk of the rise in unemployment since 2007 is cyclical. And as I and others have been trying to point out, none of the signatures of structural unemployment are visible: there are no large groups of workers with rising wages, there are no large parts of the labor force at full employment, there are no full-employment states aside from Nebraska and the Dakotas, inflation is falling, not rising.
More generally, I can’t think of any Democratic-leaning economists who think the problem is largely structural.
Yet someone who has Obama’s ear must think otherwise.
No wonder we’re in such trouble. Obama must gravitate instinctively to people who give him bad economic advice, and who almost surely don’t share the values he was elected to promote. That’s what I’d call a structural problem.
Okay, there are two prominent Noble Prize winners that I’ve mentioned in this thread. Krugman is one and Stiglitz the
other. Any truly Democratic President seeking a Roosevelt/Kennedy Style economic program would call on Stiglitz in a minute’s notice. Krugman’s the obvious choice for trade and international economics under similar policy goals. There is a rich legacy of Paul Samuelson acolytes out there. Heck, Samuelson only died a year ago, so he was even available for some time; especially during the historic ‘transition’ presidency when we even got that new fangled seal. Samuelson even went to the University of Chicago and Harvard. Samuelson was the consummate neoKeynesian. He was the yang to the Milton Friedman yin. He was friggin’ brilliant.
Now, I’m feeling a bit like Inigo Montoya here except that it’s not the word inconceivable that’s confusing me. What’s confusing me is that I keep reading these guys. These guys work with models and data. They also–of course–make assumptions. I think the models are okay, but they keep using the wrong assumptions. After two years, you have to question the assumptions when the data results keep confusing you, guys!!
Let’s start with some fresh assumptions that don’t start with he said this, yet he’s doing this, it must be the message, the adviser, or the communication style. Let’s try, he said what it took to get elected. Now, he’s doing what he believes in. If he was all that interested in being the next FDR, at least one of you and Joseph Stiglitz would be on the CEA right now. He’s just not that into you, Keynes, or unemployment unless he thinks it’s going to help in 2012.
M’kay?
Susie at Suburban Guerilla had a slightly different take but with a somewhat similar line of thought.
Obama would rather preside over a graduate seminar than make hardnosed political decisions, and that continues to be a major flaw.
I think it runs even deeper than that. I think the ‘graduate seminar’ was a public relations exercise.
Digby at Hullabaloo has a little stronger sentiment than that.
If anyone’s wondering why the administration hasn’t been able to get on message about jobs and unemployment, it might be because they just don’t know what the hell they are doing.
Well, that too.
peej
Carissa
ecocatwoman
mablue2
Mama Lopez
peggysue22
quixote
skydancingguestblogger
Mona (aka Wonk the Vote)
Sky Dancing 
These economists may be more “prestigious” than you, but you are still smarter than them.
Well, thanks for the vote of confidence but I really think they’re way beyond me in the brains department. I am somewhat cursed with common sense, however.
Common sense is a form of intelligence.
I’m not familiar with these economists specifically to judge their intelligence, but the truth is men are often more “prestigious” than women who run intellectual circles around them.
They’ve got Ivy league degrees and publications out the back side. I’m the product of public universities and work. I’ll never catch up, but I’m trying to go there now. Plus, even in academia, I’m considered a master teacher which is less valuable than a research and phd trainer. I’m trying to make the leap to the second kind’ve late in the game. But then, I thought I’d stay a practitioner and I’ve not done that for the last few years.
Degrees and publications are not synonymous with intelligence. Someone who graduates from Podunk State U can be smarter than someone who graduates from Harvard. It has a lot to do with opportunities, connections, who gets mentored, sex discrimination that you don’t even know that’s happening, even luck, and also coming late to the game as you are. After all, George W. Bush graduated from Yale, Obama from Columbia and Harvard.
Good luck in your strivings to go up the academic ladder.
Dak, my mentor, the guy who taught me academia and shepherded me through my long long career to get my PhD, never got beyond assistant professor. He retired at that rank.
He didn’t publish much, but he ushered student after student onto greatness and glory, some of his students are masters in their respective fields now (not so much me, though :)). After he retired he began to publish; huge spates of books and articles, all bottled up while he did what he thought was more important: teach his students.
I guess what I’m saying is that I really, really respect those who can teach. I think publications and such are good, and I’m going that route myself, but I’m so desperate to pass on knowledge that I’m coming up with a lecture series which I’m going to offer to anyone, for free. Simply so I can try to join the ranks of those that teach.
I think there are people in academia still, huge gobs of them, who haven’t come to terms with being bamboozled by Obama. Some of these people are big time economists. The Ivory Tower has kept them too shielded from low down scum and politicians or something (which is ironic considering the rat race academic life can be).
And Bobby Jindal was a Rhodes Scholar…
Suddha Shenoy once said that something like 95% of economics articles are never cited after publication. It’s not what you write, but how interesting it is.
Bach died in obscurity. So did Nietzsche. Now the major, fashionable figures of their day are just footnotes in their biographies.
Dak, Well all I know is I am able to understand your way of explaining all this to someone who has a mental block and phobia of sorts about economics and finances.
Well, thank you! I teach undergraduates so it comes with the job! 😉
Don’t be so self-deprecatory about that! Not everyone who teaches undergrads … or even grad students … has that talent, as I recall all too well.
“Let’s start with some fresh assumptions that don’t start with he said this, yet he’s doing this, it must be the message, the adviser, or the communication style. Let’s try, he said what it took to get elected. Now, he’s doing what he believes in.”
I love this bit!
You’d think that after all the hand wringing they’ve done this year, they’d start getting the idea that Obama’s doing what’s compatible with his ideals.
Joseph Cannon has a good post up about how liberals used to attack Dem presidents, but today everyone is supposed to toe the party line. It seems relevant to this discussion too.
http://cannonfire.blogspot.com/2010/11/strange-case-of-anti-obama-liberal.html
I read that. I thought he had a good point with it. Every one criticized Carter and LBJ all the time from within the party. It was constant.
“A man who knows how little he knows is well. A man who knows how much he knows is sick.” — Lao Tzu
Digby is right. The other problem is that Obama believes he knows, hence he doesn’t need to ask.
A lot of times I don’t even think he particularly thinks about some of this stuff. I think he just figured his first stimulus was and probably is going to take care of it so he doesn’t think he needs to bother with it any more. If that makes sense at all.
Obama is running for president. That’s what he does. Being president is not his thing.
I don’t get why they’re confused. I, like you watched the primaries, and the impression I got from Barack Obama’s team was they were folks that believed in a free market and private enterprise self regulation. They were the opposite of what we need. The problem we have, despite what the tea partiers believe, is a lack of regulatory control. When companies are trusted to do the right thing you end up with disasters like BP or the MERS debacle. The government needs to intercede on the behalf of the citizenry. This thinking is the opposite of someone who believes in a free and open market that is largely self regulating.
Same here. I guess the difference is that we paid attention to what was being said and the “progressives” paid attention to what was going on inside their addled brains.
There’s a surfeit of regulatory control, and it’s all been captured by the companies.
It’s regulation to prevent free markets and create barriers to entry for other firms. It’s basically a set up for monopolies.
Could it be that we are giving Obama to much credit for being able to multitask and independently think. His campaign had a set of well phrased bullet points which he was able t annunciate repeatidly. However once off script or cue cards, he begins to stumble. So, he is in effect a community organizer. That is ok if there is follow through on well defined correct idea’s.
However so much of his path has been greased, he never had to street fight which is what the Republicans and the lobbyists presented to him. In effect he was out of his league and got rolled by the opposition. So – in effect the resulting economic agenda is a combination of inside finance people (Bernanke, Geitner and Summers), lobbyists and the oppostion party. Poor Christy Rohmer thought she had a seat at the decision making table.
There was no independent thinking to wrench us out of the job depression (heck of a job Larry). Along with independent thinking is the need to politically frame the idea’s to sell them to a population that does not have a clue in terms of the issues and solutions. All they know is they do not have jobs and people like Sara Palin can resonate with things they know.
FDR had the capability to think independently , utilize new media (radio) and speak in plain terms to the public with this fire side chats. He did a lot by executive privelige.
Obama just does not seem to grab the ring. It is not a matter of communications and advice. It is a matter of getting beyond the talking stage with real idea’s. I think Obama has lost the ear of many people in his own party. He is there by virtue of title, but not there because of respect. People are getting tired of propping him up.
Riddle me this? Why is health insurance tax break a target and not a “gift” exemption which allows couples to transfer $26,000(or a single person $13,000) to each individual tax free and allows the recipient to not have to pay a single penny on the “gift?”
Ugh.
I am so sick of the government targeting the middle class.
Pay for the costs of our health care decisions my backside.
My poor son went to the ER in pain with a bad headache. He had the headache for 2 full days and attempted to use Motrin to control the pain. The pain was so bad that he called me and asked if there was anything else he could do from work because he was in pain. I asked about frequency, severity and what not and determined the pain was a new type of pain, not from trauma but that he should see a doctor about. Unable to make a same day appointment he headed to the ER. He saw a NP. She rather then do a full diagnostic and IGNORING the fact that somebody who had taken Motrin for 2 days had a fever of 99.6 decided to diagnose him with a migraine. She gave him fluids and a cocktail of Benadryl, Zofran, and Toradol IV. Here’s the kicker she sends him home with NOTHING other than instructions to return if the pain worsens and to take Motrin(can you say HE TOOK FREAKIN MOTRIN FOR 2 DAYS IT DIDN’T WORK). Needless to say my poor son had to return and wait in the ER the next day because the pain had returned. This time I went with him and insisted they draw a CBC and told the doctor that I had my son going to his PCP and a dentist the following week because I was concerned this might be a dental issue. They again gave him stuff for migraine and sent him on his way after making sure he was going to see PCP. On Wednesday my son saw his PCP who declared his glands were swollen and his labs indicated an infection, FINALLY my son received some antiobiotics as well as Voltaren and Tramadol(I’m betting the Tramadol was to hedge his bets in case there was a migraine). The pain improved following the antibiotics(He took 1 Tramadol on the first day and has used the Voltaren sparingly). I insisted he see the dentist anyway. On Thursday he saw the dentist. Thank God 1 out of 3 doctors had the common sense to provide an antibiotic. My son has an abcessed tooth. I want to scream. Hello? Where in this process was the consumer at fault for this? Uh nowhere. If the stupid NP had bothered to pay attention to what her patient was saying (pain along the trigeminal nerve)and looked at the vital signs she could have caught the infection from the get go. Instead my son had to go to 3 doctors(and I’m betting he didn’t get help from the second because he was covering NP’s backside) before he got the care he needed. And thank heaven I insisted that he continue with the process because he would have had a bacterial infection that could have spread to his bone, heart or any number of places(since we all know teeth don’t get viruses).
any dentist could tell you that an er is not the place to go with a tooth problem. there arent any dentists on staff. health insurance does not cover anything to do with the mouth, even the temperomandibular joint, the jaw. there is a condescending attitude among REAL medical people against the dental profession. meanwhile, they either have never been trained to understand what is in the mouth, or they just do not want to believe that a dental problem can be serious. tell that to the maryland boy who died from cavernous sinus thrombosis, the end result of an untreated dental infection.
He didn’t know it was a tooth problem. It presented as head pain along the side of his head. He wasn’t even experiencing pain when he bit down. I have had migraines though and this did not present as any migraine I’d ever experienced. So I was dubious when he told me they diagnosed migraine.
I actually started thinking tooth problem after he told me 99.6 even after 2 days worth of motrin(that’s why I had the second doctor draw blood when they were giving him an IV).
I was furious with the care he received. On day 2 my poor son had to sit in the ER for 2 hours because the NP on day one after diagnosing him with a migraine didn’t even bother to give him medication to cover another migraine episode. They just blithely informed him to come back as if someone with migraine pain is going to be comfortable sitting in a triage area for however many hours. If they were going to have the courage of their convictions they should have at least provided him with an oral alternative and instructed him to see a primary care provider. At least doctor 2 listened and drew blood while they had the IV in so he didn’t have to get poked for a third time. I was positively thrilled with the 3rd MD because he pretty much covered all the bases. It turned out well that they put him on the antibiotics because it did wind up as an infection that we’ll be taking care of tomorrow.
Won’t get any argument from me that dental care is health care. We know that tooth infections can weaken the heart and that dental health is a decent indicator for health issues and still it seems to be treated as some sort of separate entity from health care. Personally, I think an annual exam of teeth ought to be covered by health insurance as preventative care.
I had a horrible experience with an ear infection. I went to the emergency room because I was so dizzy I could barely walk. I even knew what the problem was because it had happened to me once before. I had a viral infection in my inner ear, but this time it was far worse. My balance was almost completely gone.
The doctor didn’t take it seriously, and simply told me to take motion sickness pills. The symptoms continued to worsen and horrible pain and swelling developed in one of my ears to the point that I couldn’t hear anything at all. I went back another time, and again got condescended to. Finally, on my third try, a doctor suggested I see a specialist.
I went to Mass Eye and Ear where I learned that I might lose my hearing in that ear. The motion sickness pills were making the condition worse. I had to take two courses of steroids and the pain and hearing loss persisted for months. It was awful.
I actually had Medicare at the time, but most private doctors in my area don’t accept Medicare. You have to go to a hospital to get treated.
Jerks. Why couldn’t they have called a specialist to see you in the ER?
I went to the ER with an acute back problem once. They sent me home with instructions to see my osteopath and on the way out I nearly got hit by an arriving ambulance because I could hardly walk fast enough to get out of the way.
My mother-in-law was sent home from the emergency room after she had had a stroke! They could have given her blood thinners, but instead they wouldn’t believe us when we told them she had suddenly lost the ability to walk, talk, or write, and they sent her home, causing her brain damage to be far worse than it would have been if she had gotten immediate treatment.
They didn’t have that kind of specialists, but also the first doctor didn’t even think it was necessary. I probably should have sued for malpractice, but that costs money too.
How awful. In my book, that is just plain malpractice.
Referring to your mother-in-law above.
It’s lucky you didn’t fall down and hurt yourself or get hit by some vehicle on the way out. Yeah, it takes more money to sue for malpractice than a lot of people have.
Same thing happened to my husband, they even went as far as getting him a CAT scan, turned out (after pain meds, imitrex etc.) to be a cracked tooth that was difficult to see, but caused a severe headache.
Sorry to hear about all your son went through.
ERs only treat the current episode, and don’t write Rxs for anything beyond that. They want you to go back to your PCP. Unfortunately, they do a lousy job of explaining this.
I was frankly expecting to read that he had an MRI, a CAT scan and etc. The ERs in my area will tend to over work-up patients. As an NP friend of mine who worked in an ER said, “We have to rule out death in the next minute.”
Not sure why the NP your son saw was “stupid” but the MD who made the same diagnosis later on wasn’t also? Given that your son saw 3 different clinicians before infection was suspected, it doesn’t sound straightforward. I know, that’s the clinicians’ problem and not your son’s. I’m just glad your son finally got treated appropriately.
I’ve seen too many patients with tooth abcesses (usually from no dental care due to no dental coverage); all had jaw/oral pain, swollen lymph nodes (not glands) but no headaches.
Voltaren is a prescription non-steroidal anti-inflammatory drug, like Motrin (ibuprofen). Not sure it’s any stronger than ibuprofen, but some people respond better to one NSAID than another.
Yeah well getting to see your PCP usually takes more than a day. As far as I’m concerned they SHOULD be providing interim care beyond telling someone “Hey it’s not a stroke, have an IV and come back tomorrow and wait for hours to repeat this tomorrow ad nauseum.” Seriously, you think that’s good medicine?
The second physician was smart enough to actually do a diagnostic test particularly since they were already accessing his veins for an IV for a second time. He also was pretty clear that my son needed to make sure he made the appointment that he made with the PCP.
It was as straightforward as something could be when you choose to use none of the tools that you actually have available to you and you don’t bother to pay attention to what the patient is saying to you.
I mean c’mon someone taking a NSAID that is used as an antipyretic for 2 days has ANY kind of fever (since it was under 100 it was dismissed) and you don’t think “hey maybe there might be an infection involved?” Really? I didn’t go to medical school but that raised a red flag for me.
His pain was localized. He could actually point to where the pain was located. Again if it was so darn unstraightforward then how exactly did I figure it out? I haven’t attended medical school. I attended a Hospital A school, an EMT course, and a Pharmacy specialty school. And thank heaven I did or my kid’s abcess could have caused damage to him. The whole process was a horrific joke and I didn’t appreciate my kid being utilized as a punch line…AT ALL.
Dakinkat, I have found that in the wider world, surprisingly few people care about the quality or existence of your degree. Good work, and good argument, speaks for itself. The important thing is to come up with truly NEW ideas.
My ladyfriend holds a degree in art history from a (decent) state school. She started her academic career at a community college — and she began late.
She and I have formed an unusual theory about a disputed Leonardo. If the theory is published, and if it intrigues others, then no-one will care if her degree comes from a state school or an Ivy league institution.
What matters is the idea.
My local news actually had non entertainment news and reported about the health insurance tax break being on the block. They then had the gaul to read “some say” it would be good if it was done away with since that would force people to make better health care choices!!!!!!…this is like saying a famine would be good because it would force people to make better food choices.!! ..they are such utter, total bastards who will not stop unless made to…but who will do it? Everyone running for office proves their ” worthiness” by their eagerness to slash such things away. That is the only criteria deemed ” serious “
What completely pisses me off is they keep trying to sell this idea that people are visiting doctors as a recreational activity. We only have a $20 co pay. I could still find tons of things I’d rather do with $20 then go to a doctor (Buy a pizza, pop, and some popcorn and rent 2 redbox movies, Get a coffee, pick up a paperback and a small box of chocolates and read a book in the bathtub, take the kids for a walk and treat them to Hot chocolate at Sheetz or Wendy’s frostees, etc, etc). People don’t sit in doctor’s waiting areas because they are bored, they go because they don’t feel well and they want some type of resolution.
All they are doing is making health care less affordable for those of us fortunate enough to not have to forgo paying a month’s worth of bills when we get sick before we can get seen. If I have to come up with $500 out of my pocket (almost a half of a months pay for a minimum wage worker) on top of the 100 some odd dollars a month being paid out to some insurance company then I very well might be forced to wait longer for care and end up costing the process more money for my hospitalization and treatment. What they are hoping though as that we’ll just hurry up and die so they can keep the premiums as pure profit.
Making health care less affordable is the goal. I included a link in the Mon. morning thread on this. Either the elites actually believe that Americans go to the doctor for frivolous reasons, or it is part of the program to turn us all into serfs.
“Let’s start with some fresh assumptions that don’t start with he said this, yet he’s doing this, it must be the message, the adviser, or the communication style. Let’s try, he said what it took to get elected. Now, he’s doing what he believes in.”
The thing is, if you study what Obama did as State Senator this should be the initial assumption.
He’ll say anything — he supported same-sex marriage and promised to fight any effort to restrict it; he opposed same-sex marriage and claimed to be gay right’s fierce advocate — took the staunch position that mandated coverage is unacceptable and we will have a public option —- one could compile a list of examples that would fill this page — and then do whatever he believes will benefit him and his agrandizement. And he will be genuinely befuddled about why any supporter is disappointed or displeased.
This isn’t just normal politician-stuff; it’s the behavior of a psychopath.
Along with millions of ordinary thinkers, brilliant minds like DeLong, Krugman, Thoma, et al, will continue to be confused about what Obama will do and why he does it because they cannot consider –much less accept– that Barack Obama is a psychopath. And if you can’t bear to consider that then all you can do is make up other reasons for something that doesn’t make sense.
I totally agree.
I don’t think very many people did a literature review on Obama’s past but took him at face value and for the words others wrote for him to speak. I would hope we’ve learned our lessons by now, but one never knows. History does tend to repeat itself and all that. As I wrote a few days ago, at least a few folks are looking at Bobby Jindal with a bit more jaundiced eye and less true belief about what he’s written in his book. Hopefully, the same goes for pop icon Palin. We can’t afford leaders who have pizazz but no depth of experience and knowledge any more.