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I would describe this as "fact-based" economics. Paul Krugman had a good column yesterday[1] pertaining to the other kind of economics, which tends to exacerbat

I would describe this as "fact-based" economics. Paul Krugman had a good column yesterday[1] pertaining to the other kind of economics, which tends to exacerbate the problems. [1] https://www.nytimes.com/2017/04/24/opinion/zombies-of-voodoo-economics.html https://www.nytimes.com/2017/04/24/opinion/zombies-of-voodoo...

icelancer 9y ago
"Yes, the U.S. economy rebounded quickly from the slump of 1979-82. But was that the result of the Reagan tax cuts, or was it, as most economists think, the result of interest rate cuts by the Federal Reserve? Bill Clinton provided a clear test, by raising taxes on the rich. Republicans predicted disaster, but instead the economy boomed, creating more jobs than under Reagan." I don't know why I read Krugman columns. Yeah, Clinton raising taxes caused the boom. Not the proliferation of the Internet, drawdowns of the military, and relative global peace (as far as the US is concerned). Solid single-input machines. Krugman's columns are nothing more than political hackery, with all due respect to his very good work otherwise.
- mtdewcmu 9y ago
  You seem to be missing the nuance. Krugman's over-arching point was that cutting taxes on the rich doesn't boost the economy. His point about Clinton wasn't to say that raising taxes boosted the economy. All else being equal, it makes no sense to assert that raising taxes would provide an economic boost. Raising taxes removes money from the economy; the expectation would be that that would slow the economy. Krugman's point was that if supply-side economics were true, only cutting taxes should boost the economy and raising taxes should cause a disaster. Clinton raised taxes and what actually happened was that the economy did great. Therefore, the prediction of disaster was clearly, indisputably wrong.
  - icelancer 9y ago
    The problem is that I agree largely with Krugman, not disagree. I think taxes should go up. I think rhetoric that is found in his columns does it very little justice, however.
    - mtdewcmu 9y ago
      I think Krugman undercuts his credibility somewhat by being explicitly partisan. It makes it easier to dismiss his point of view, if you don't read his arguments carefully. Besides the fact that he writes lucidly about economics, what really impresses me is that, having followed his column for 15+ years, his assessments are consistently proved right by history. Most recently, he argued forcefully against austerity, when austerity was in vogue and people were making dire predictions of coming inflation. Bernanke was relatively in agreement with Krugman and favored cheap money (too timidly, Krugman thought). Krugman's predictions of long-term low inflation were borne out, of course. When Krugman strays from the topic of economics, I don't take him seriously. His opinions about politics are fairly worthless. You have to consider what his expertise is in.
      - icelancer 9y ago
        >his assessments are consistently proved right by history Wouldn't say that. His predictions about the Internet, specifically, are laughably incorrect. He's since tried to play it off like he was intentionally trying to be provocative, or was supposed to say something silly... which is a coward's way out. EDIT: His theories on Bitcoin are pretty devoid of intelligence, regardless of whether or not he ends up being correct. >His opinions about politics are fairly worthless. Yes, I agree. He should largely be banned from writing about them considering how much it undermines his areas of expertise.
        mtdewcmu 9y ago
        The examples of bad predictions that you mentioned are outside his area of expertise. I usually skip those columns. He has to write two columns a week and I think he runs out of topics. His on-topic columns can be repetitive, too. The solution is not to force yourself to read the column if you know it's going to be bad. If it's not about pure economics, don't read it.
- mcguire 9y ago
  Ah, the point of that paragraph is that raising taxes didn't prevent economic growth.
  - icelancer 9y ago
    But they might have. With the power of the Internet fueling the economy at the time, pretty much any fiscal or economic policy would have been overpowered by the boom. Something Krugman doesn't quite illustrate.
  - mtdewcmu 9y ago
    Do you find that his writing is very hard to follow? He makes sense to me, but I've been reading his writing for about 15 years now. He has always seemed to me to be significantly underappreciated. Maybe it's because people can't understand him. The OP column was about how supply-side economics (tax cuts for the rich -> so much growth that the tax cuts pay for themselves) has been tried many times and in no case has there ever been convincing evidence that it worked. Furthermore, when the exact opposite has been implemented (tax increases for the rich), nothing bad has ever happened. So a rational conclusion would be that supply-side economics doesn't work and the idea ought to die once and for all. But in reality, politicians keep bringing it back from the dead.

icelancer 9y ago

"Yes, the U.S. economy rebounded quickly from the slump of 1979-82. But was that the result of the Reagan tax cuts, or was it, as most economists think, the result of interest rate cuts by the Federal Reserve? Bill Clinton provided a clear test, by raising taxes on the rich. Republicans predicted disaster, but instead the economy boomed, creating more jobs than under Reagan." I don't know why I read Krugman columns. Yeah, Clinton raising taxes caused the boom. Not the proliferation of the Internet, drawdowns of the military, and relative global peace (as far as the US is concerned). Solid single-input machines. Krugman's columns are nothing more than political hackery, with all due respect to his very good work otherwise.

mtdewcmu 9y ago
You seem to be missing the nuance. Krugman's over-arching point was that cutting taxes on the rich doesn't boost the economy. His point about Clinton wasn't to say that raising taxes boosted the economy. All else being equal, it makes no sense to assert that raising taxes would provide an economic boost. Raising taxes removes money from the economy; the expectation would be that that would slow the economy. Krugman's point was that if supply-side economics were true, only cutting taxes should boost the economy and raising taxes should cause a disaster. Clinton raised taxes and what actually happened was that the economy did great. Therefore, the prediction of disaster was clearly, indisputably wrong.
- icelancer 9y ago
  The problem is that I agree largely with Krugman, not disagree. I think taxes should go up. I think rhetoric that is found in his columns does it very little justice, however.
  - mtdewcmu 9y ago
    I think Krugman undercuts his credibility somewhat by being explicitly partisan. It makes it easier to dismiss his point of view, if you don't read his arguments carefully. Besides the fact that he writes lucidly about economics, what really impresses me is that, having followed his column for 15+ years, his assessments are consistently proved right by history. Most recently, he argued forcefully against austerity, when austerity was in vogue and people were making dire predictions of coming inflation. Bernanke was relatively in agreement with Krugman and favored cheap money (too timidly, Krugman thought). Krugman's predictions of long-term low inflation were borne out, of course. When Krugman strays from the topic of economics, I don't take him seriously. His opinions about politics are fairly worthless. You have to consider what his expertise is in.
    - icelancer 9y ago
      >his assessments are consistently proved right by history Wouldn't say that. His predictions about the Internet, specifically, are laughably incorrect. He's since tried to play it off like he was intentionally trying to be provocative, or was supposed to say something silly... which is a coward's way out. EDIT: His theories on Bitcoin are pretty devoid of intelligence, regardless of whether or not he ends up being correct. >His opinions about politics are fairly worthless. Yes, I agree. He should largely be banned from writing about them considering how much it undermines his areas of expertise.
      - mtdewcmu 9y ago
        The examples of bad predictions that you mentioned are outside his area of expertise. I usually skip those columns. He has to write two columns a week and I think he runs out of topics. His on-topic columns can be repetitive, too. The solution is not to force yourself to read the column if you know it's going to be bad. If it's not about pure economics, don't read it.
mcguire 9y ago
Ah, the point of that paragraph is that raising taxes didn't prevent economic growth.
- icelancer 9y ago
  But they might have. With the power of the Internet fueling the economy at the time, pretty much any fiscal or economic policy would have been overpowered by the boom. Something Krugman doesn't quite illustrate.
- mtdewcmu 9y ago
  Do you find that his writing is very hard to follow? He makes sense to me, but I've been reading his writing for about 15 years now. He has always seemed to me to be significantly underappreciated. Maybe it's because people can't understand him. The OP column was about how supply-side economics (tax cuts for the rich -> so much growth that the tax cuts pay for themselves) has been tried many times and in no case has there ever been convincing evidence that it worked. Furthermore, when the exact opposite has been implemented (tax increases for the rich), nothing bad has ever happened. So a rational conclusion would be that supply-side economics doesn't work and the idea ought to die once and for all. But in reality, politicians keep bringing it back from the dead.