It just won’t do to criticize someone’s reasoning without actually quoting something that they wrote. If Krugman reasoning is invalid, as Crook asserts without any qualification or hint of doubt, then one would expect him to have reached an unreasonable conclusion. Crook presents no specific criticisms of Krugman and, in particular, does not address his argument about protection during a liquidity trap at all.

He also falsely claims that Krugman thinks that economics 101 is fine for analysis of the stimulus. Thus he ignores the original model developed by Paul Krugman and presented on his blog http://tinyurl.com/8wqdnq which wasn’t to be found in any introductory economics textbook, or any textbook or anywhere at all until Krugman wrote it down.

Crook seems to me to be typical of Krugman critics. He considers Krugman’s conclusions to be shrill, therefore he asserts that Krugman’s reasoning is invalid. However, he doesn’t present and defend a less shrill conclusion. I do not think it is a valid approach to reasoning to start with the conclusion or even a range of acceptable conclusions and work backwards. I doubt that Crook does either.

Finally Crook assumes that it is a bad thing to reduce public esteem for economists below its currently low level. He must know that the heated blog debate is tame compared to what these people say about each other in private (try to guess which new Keynesian referred to the Chicago Minnesota school as “the crazies” in my preseence). So he thinks that economists should hide the truth from the public. An odd view for an economist or a journalist.

We’re not in Great Depression area yet, but yes, we’re likely to be more highly aware of risk (at least in the financial sector) for quite some time. If it’s a depression-level event, then yes, a generation.

On the other hand, I don’t (yet) see a big move to allow prices to rise to allow for higher robustness in fields like agriculture, electronics, power generation, etc.

Really, the idea of there being a trade-off for that wealth doesn’t really come into it. Those who advocated for American-style policies would never admit the downside, and those who were against such policies made themselves look silly by pretending there was no economic gains to be had. Of course, we also had a continual drain of the most talented and ambitious (often the same) to the south were they could get the most return on their abilities.

Europe is far enough away that the comparisons weren’t as inevitable, but I do think that the “shrinking world” doesn’t help things. As communication becomes better, it’s much harder not to feel the effects of relative poverty compared to the Americans. And to be honest, the Europeans have adapted a lot of American style policies that have considerably increased average wealth (if by nothing else, making things much much cheaper – I remember from my youth that you added 50% to the price of anything to get the Canadian price and tripled it to get the price in Europe).

Sadly, they’re also now paying the price for it along with everyone else.

Yes, it’s an ethical or political position either way. My objection is to shading the facts in support of a political position. If experts want their renditions of reality to be accepted as the best approximation of reality available, they should not shade it. As for the facts, yes there are costs to protectionism, but if the case against it is so clear it should stand up if presented fairly.

Tom,

What I would say the masses want is as high as possible a risk-adjusted median standard of living. High growth can reflect rapid appreciation of assets whose ownership is not widespread, and I don’t think the masses care about that. I also think people care a great deal about security, as attested by all those who work jobs they don’t like but feel will continue to sustain them.

I would agree, sort of. The masses definitely do not want changes that cause higher growth, they only want the higher growth, especially as the relative wealth of the USA grows higher and higher compared to their own.

However, the elite politicians eventually do respond to the masses overall desire by imposing unpopular policies that produce that higher growth. This is also no doubt also motivated by a desire to not have one’s country slide into economic irrelevance.

I guess the free traders’ argument is an ethical position. You might also call it a political position. But I don’t think you can argue it is free from facts. You can take the opposite ethical (political) position and still recognise that protectionism has adverse economic effects, i.e. there is a real cost, both to individuals, groups and sectors, and to society as a whole. You may think it’s worth the cost, but most times the protectionists deny the cost altogether.

As for this:

it is not clear that labor can extract rent is a global market, nor that the government can redistribute wealth as effectively. I realize that these things are debated in at least some areas within the academy.

You bet they are. The big buildup of the post-WWII welfare states coincided with a huge expansion of international trade. The paragons of welfare states, the Scandinavian ones, are all small open economies with trade accounting for something like half their GDPs. At the same time their tax burdens are around 50% of GDP, their income distributions are among the most equal in the world (pre-tax as well as after-tax), and they have very strong labour movements that are thoroughly integrated in the political processes.

http://www.firelarrysummersnow.blogspot.com

On the whole, I’d say economics is somewhat similar to foreign policy. Of course, in the runup to Iraq, there were foreign policy experts with 100% different views on the issue. Economics is no different. Just like during the Iraq debate, however, any thinking liberal economist will reject as fanciful incoherent anti-stimulus arguments from the right. The only real debate is whether the stimulus is big enough. I think there’s good reason to suspect it is not.

“I must say, I was surprised by the vehemnce of Barkley Rosser’s response, both to Krugman and now to me here.”

I’ve noted what sort of person gets really p*ssed at Krugman, and it tends to be a surprisingly good indicator of honesty and reasonableness.

One can and neoclassical economists do valorize consumer choice. The ethical position that stostosto took (or claimed a free trader would take): people have no right to impose general preferences for society in such a way as to override individual choice. My own position is that individual choice is a strong value, but so is having a middle-class society. And it is not clear that labor can extract rent is a global market, nor that the government can redistribute wealth as effectively. I realize that these things are debated in at least some areas within the academy. But they are part of the public debate as well, and the experts serve us well to the extent that they make the public debate more informed and more fair. Suppressing nuance in support of agendas makes it both less informed and less fair.

“I think the free traders’ answer would be that this is of course a completely legitimate attitude, no more than the expression of a personal preference for American cars over foreign cars. But in no way does it argue for this consumer’s preference to be extended by government fiat on all other consumers who may have different preferences.”

Economics as a descriptive discipline provides no basis for ethical judgments, such as deciding whether an attitude is “legitimate” or not. Moreover, the preference was not simply for owning an American car, but for living in a world where industrial production remains more centered in America at the expense of Asia. If the argument is what government should do, take it to the ballot box. But, of course, economists seldom favor that on trade issues, as protectionism almost always wins. What seems to underlie your position is that notion that individual choice in economic transactions should not overridden by authority, at least not to ochieve objectives such as this one. Which is fine, but it is an ethical judgement reflecting a certain set of ethical values. Certainly, economists can make ethical judgments like anyone else, but ethical judgments are not facts, and presenting them as such or distorting facts to support them is intellectually dishonest. Now, there are cases where it may be OK. Polemical art, such as plays or paintings with explicitly political intentions, often presents facts selectively to support a normative position. But the artist is not assuming the position of “expert” whose interpretation of facts is to be given deference because of their knowledge. If you consider “Dr. Strangelove” to be BS, Kubrick cannot claim that his opinion is intrinsically superior to yours because he is an expert.