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I wish this book were required reading for politicians: This Time is Different: Eight Centuries of Financial Folly by Carmen Reinhart and Kenneth Rogoff http:

I wish this book were required reading for politicians: This Time is Different: Eight Centuries of Financial Folly by Carmen Reinhart and Kenneth Rogoff http://www.reinhartandrogoff.com/ http://www.reinhartandrogoff.com/ They take a MASSIVE dataset - 8 centuries of data across hundreds of governments - and find the same patterns repeating. Policy makers of different stripes make the same mistakes leading to the same crises, and - when the emergency comes - they try the same failed solutions their forebears tried, often with the indignant claim that "this time it's different!" Often, the solutions the policy makers are so apt to try just happen to be short-term band-aids, or kick-the-can-down-the-road ways to postpone the hard stuff, or ways to save face and let the next guy be caught holding the bag.

potatosareok 12y ago
So I was thinking of picking up this book on your recommendation. However, the names seemed vaguely familiar to me already, which reminded me of the scandal where some grad student reran numbers from one of their papers, and found that Reinhart and Rogoff had made basic coding errors in Excel (I think Excel?) running the data (as well as cherrypicking data to some extent). When the data was processed correctly, it actually showed the opposite of what Reinhart and Rogoff had argued for. Since I obviously don't have time to fact check all the numbers in their book, and they have a demonstrated history of biased results, I think in the end I'll pass on the book. Just my 2 cents.
- NoPiece 12y ago
  It is not true that the revised data showed the opposite of what Reinhard and Rogoff argues for. It just showed it to a much lesser degree. The New Yorker wrote a fair but critical analysis: http://www.newyorker.com/online/blogs/johncassidy/2013/04/the-rogoff-and-reinhart-controversy-a-summing-up.html http://www.newyorker.com/online/blogs/johncassidy/2013/04/th...
- BSousa 12y ago
  Was this the same data that was used by IMF and the rest to justify the push the austerity measures on the troubled economies in Europe? I remember there was a big backlash at the time when the numbers came to light but nothing changed anyway (maybe the save face issue above)
  - eli_gottlieb 12y ago
    >Was this the same data that was used by IMF and the rest to justify the push the austerity measures on the troubled economies in Europe? Yes.
- rquantz 12y ago
  My understanding of it is that Rogoff is a great economic historian, but not a great economist. Or something like that. Paul Krugman, for instance, often points out that it's sad R&R are so consistently wrong about how to handle the current crises, because this book was so good. So the book may be worth reading in spite of the bad research they've been attached to since.
danieltillett 12y ago
>Often, the solutions the policy makers are so apt to try just happen to be short-term band-aids, or kick-the-can-down-the-road ways to postpone the hard stuff, or ways to save face and let the next guy be caught holding the bag. Actually it is worse than this. The policy makers all know what needs to be done, but it is against the interests of the powerful. So instead of doing what is right for the bottom 99.9% they do what is right for the top 0.1%. The policy makers have actually learned a great deal on how to siphon off the proceeds of improved production towards the top 0.1% and have now got it down to an art form. They have even managed to convince us that they don't know what they are doing - rather than listening to what they say, follow the money.
- Djehngo 12y ago
  Is this part of the premise of the book or personal opinion?
  - danieltillett 12y ago
    Neither - it is an empirical observation. Have a look at this graph. http://en.wikipedia.org/wiki/File:Productivity_and_Real_Median_Family_Income_Growth_1947-2009.png http://en.wikipedia.org/wiki/File:Productivity_and_Real_Medi...
  - vdaniuk 12y ago
    Come on, personal opinion? Can one really doubt that governments are not working for the benefit of 99%? I don't think so.
    - BrandonMarc 12y ago
      It's worth noting that almost every single person with influence (president, cabinet, congress, scotus, the heads of all the federal departments of ___) is IN the top 1% (usually the 0.1%). Very few government officials (with serious influence) want to help the masses as much as they want to help themselves / their peers. So any congresscritter who claims they are working for the benefit of the masses has my immediate suspicion. If their track record shows they're telling the truth, that's a different story, and frankly that's what matters anyway, rather than their election-year talking points.

potatosareok 12y ago

So I was thinking of picking up this book on your recommendation. However, the names seemed vaguely familiar to me already, which reminded me of the scandal where some grad student reran numbers from one of their papers, and found that Reinhart and Rogoff had made basic coding errors in Excel (I think Excel?) running the data (as well as cherrypicking data to some extent). When the data was processed correctly, it actually showed the opposite of what Reinhart and Rogoff had argued for. Since I obviously don't have time to fact check all the numbers in their book, and they have a demonstrated history of biased results, I think in the end I'll pass on the book. Just my 2 cents.

NoPiece 12y ago
It is not true that the revised data showed the opposite of what Reinhard and Rogoff argues for. It just showed it to a much lesser degree. The New Yorker wrote a fair but critical analysis: http://www.newyorker.com/online/blogs/johncassidy/2013/04/the-rogoff-and-reinhart-controversy-a-summing-up.html http://www.newyorker.com/online/blogs/johncassidy/2013/04/th...
BSousa 12y ago
Was this the same data that was used by IMF and the rest to justify the push the austerity measures on the troubled economies in Europe? I remember there was a big backlash at the time when the numbers came to light but nothing changed anyway (maybe the save face issue above)
- eli_gottlieb 12y ago
  >Was this the same data that was used by IMF and the rest to justify the push the austerity measures on the troubled economies in Europe? Yes.
rquantz 12y ago
My understanding of it is that Rogoff is a great economic historian, but not a great economist. Or something like that. Paul Krugman, for instance, often points out that it's sad R&R are so consistently wrong about how to handle the current crises, because this book was so good. So the book may be worth reading in spite of the bad research they've been attached to since.

danieltillett 12y ago

>Often, the solutions the policy makers are so apt to try just happen to be short-term band-aids, or kick-the-can-down-the-road ways to postpone the hard stuff, or ways to save face and let the next guy be caught holding the bag. Actually it is worse than this. The policy makers all know what needs to be done, but it is against the interests of the powerful. So instead of doing what is right for the bottom 99.9% they do what is right for the top 0.1%. The policy makers have actually learned a great deal on how to siphon off the proceeds of improved production towards the top 0.1% and have now got it down to an art form. They have even managed to convince us that they don't know what they are doing - rather than listening to what they say, follow the money.

Djehngo 12y ago
Is this part of the premise of the book or personal opinion?
- danieltillett 12y ago
  Neither - it is an empirical observation. Have a look at this graph. http://en.wikipedia.org/wiki/File:Productivity_and_Real_Median_Family_Income_Growth_1947-2009.png http://en.wikipedia.org/wiki/File:Productivity_and_Real_Medi...
- vdaniuk 12y ago
  Come on, personal opinion? Can one really doubt that governments are not working for the benefit of 99%? I don't think so.
  - BrandonMarc 12y ago
    It's worth noting that almost every single person with influence (president, cabinet, congress, scotus, the heads of all the federal departments of ___) is IN the top 1% (usually the 0.1%). Very few government officials (with serious influence) want to help the masses as much as they want to help themselves / their peers. So any congresscritter who claims they are working for the benefit of the masses has my immediate suspicion. If their track record shows they're telling the truth, that's a different story, and frankly that's what matters anyway, rather than their election-year talking points.