Bad faith and economics
As 2018 draws to an end, we’re seeing many articles about the state of the economy. What I’d like to do, however, is talk about the state of economics, at least as it relates to the political situation.
That state is not good. The bad faith that dominates conservative politics at every level is infecting right-leaning economists, too.
This is sad, but it’s also pathetic. For even as once-respected economists abase themselves in the face of Trumpism, the GOP is making it ever clearer that their services aren’t wanted, that only hacks need apply.
What you need to know when talking about economics and politics is that there are three kinds of economists in modern America: liberal professional economists, conservative professional economists, and professional conservative economists.
By “liberal professional economists” I mean researchers who try to understand the economy as best they can but who, being human, also have political preferences, which in their case puts them on the left side of the U.S. political spectrum, although usually only modestly left of center. “Conservative professional economists” are their counterparts on the center right.
“Professional conservative economists” are quite different. They’re people who even center-right professionals consider charlatans and cranks; they make a living by pretending to do actual economics—often incompetently—but are actually just propagandists. And no, there isn’t really a corresponding category on the other side, in part because the billionaires who finance such propaganda are much more likely to be on the right than on the left.
But let me leave the pure hacks on one side for a moment, and talk about the people who at least used to seem to be trying to do real economics.
Do economists’ political preferences shape their research? They surely affect the choice of subject: Liberals are more likely to be interested in rising inequality or the economics of climate change than conservatives. And human nature being what it is, some of them—OK, of us— occasionally engage in motivated reasoning, reaching conclusions that cater to their politics.
I used to believe, however, that such lapses were the exception, not the rule, and the liberal economists I know try hard to avoid falling into that trap and apologize when they do.
But do conservative economists do the same? Increasingly, the answer seems to be no, at least for those who play a prominent role in public discourse.
Even during the Obama years, it was striking how many well-known Republican-leaning economists followed the party line on economic policy, even when that party line was in conflict with the nonpolitical professional consensus.
Thus, when a Democrat was in the White House, GOP politicians opposed anything that might mitigate the costs of the 2008 financial crisis and its aftermath; so did many economists. Most famously, in 2010 a who’s who of Republican economists denounced the efforts of the Federal Reserve to fight unemployment, warning that they risked “currency debasement and inflation.”
Were these economists arguing in good faith? Even at the time, there were good reasons to suspect otherwise. For one thing, those terrible, irresponsible Fed actions were pretty much what Milton Friedman prescribed for depressed economies. For another, some of those Fed critics engaged in Donald Trump-like conspiracy theorizing, accusing the Fed of printing money, not to help the economy, but to “bail out fiscal policy,” i.e., to help Barack Obama.
It was also telling that none of the economists who warned, wrongly, about looming inflation were willing to admit their error after the fact.
But the real test came after 2016. A complete cynic might have expected economists who denounced budget deficits and easy money under a Democrat to suddenly reverse position under a Republican president.
And that total cynic would have been exactly right. After years of hysteria about the evils of debt, establishment Republican economists enthusiastically endorsed a budget-busting tax cut. After denouncing easy-money policies when unemployment was sky-high, some echoed Trump’s demands for low interest rates with unemployment under 4 percent—and the rest remained conspicuously silent. Paul Krugman, who won the 2008 Nobel Prize in economics, writes for the New York Times.