The Cossacks, well, they work for the Czar

5: it’s a DeLong-ism… based on the cliche of a Russian Jewish peasant looking at his burning shtetl after the pogrom had been through and wailing “If only the Little Father knew about this, surely he would stop it!”

Indeed. On which note, I note that Philip Mirowski has a new book out this year on what appears to be this very issue, which I am presuming will be an extended version of this, which itself is pretty much an extended version of this very post.

Anyway, given his tireless shilling for the Republicans, I think it’s pretty fucking obvious what ol’ uncle Miltie’s views on the stimulus package would be. Pretty much every single thing for which BdL et al have criticised the current day Chicagoans and their like was also put forward by Friedman. FDR prolonged the New Deal? Check (well, depending on who he was talking to). Willingness to (publicly) go along with any Republican economic policy? Check. Everything. I like BdL and Krugman a lot – they both seem like fundamentally decent people – but the willingness (particularly on Brad’s part) to constantly genuflect at the altar of the golden age of Chicago under Stigler and Friedman is slightly irritating.

Who else are we supposed to work for, Stalin?

When I see the word “Cossacks”in conjunction with “Chicago”, I immediately think of the cops. I can’t remember where I got it from though – probably either Harlan Ellison or Abbie Hoffman. Or both.

Taking my cue from Jehovah in the Old Testament, I would be prepared to spare the Chicago School if one innocent man could be found there.

Can we at least collect a hundred of their foreskins?

Like Rea, I think your comparison of the Cossacks with Chicago’s economics faculty is pretty unfair on the Cossacks.

Continuous demonstrations on the Nevsky – first compact masses of workmen singing revolutionary songs, later a motley crowd of city folk interspersed with the blue caps of students. “The promenading crowd was sympathetically disposed toward us, and soldiers in some of the war-hospitals greeted us by waving whatever was at hand.” How many clearly realised what was being ushered in by this sympathetic waving from sick soldiers to demonstrating workers? But the Cossacks constantly, though without ferocity, kept charging the crowd. Their horses were covered with foam. The mass of demonstrators would part to let them through, and close up again. There was no fear in the crowd. “The Cossacks promise not to shoot,” passed from mouth to mouth. Apparently some of the workers had talks with individual Cossacks. Later, however, cursing. half-drunken dragoons appeared on the scene. They plunged into the crowd, began to strike at heads with their lances. The demonstrators summoned all their strength and stood fast. They won’t shoot.” And in fact they didn’t.

Leon Trotksy, History of the Russian Revolution

Just a little more: if you look at Krugman’s model, and if I understand it, you could (assuming fixed interest rates), all in equal amounts, increase taxes/decrease savings, and/or increase G while decreasing private investment…and have no change or a net gain in GDP. Of course the Chicagoans won’t accept that.

Also, put me in with those who question this Cossacks/Tsar analogy. Most of the time the Cossacks worked for themselves. They got cowed a bit through a combination of a brutal smackdown (putting down of the Razin and Pugachev revolts, the elimination of the Zaporozhian Sich) and a limited autonomy to run their own affairs. To the extent they worked for the Tsar, it was mostly against the Turks and some of the ethnic minorities of the Russian empire. All that oppressing the peasants and carrying out pogroms stuff was not part of the official job description. Rather it was just that the Tsar didn’t really care about it. At the time of the Revolution most of the Cossacks initially supported first Kerensky and then even the Bolsheviks (as Engels’ Trotsky quote shows) and opposed the Tsar. They changed their minds once the Bolsheviks moved to limit their autonomy, and even then it wasn’t all of them (like Budenny).

…it’s another to insist that [fiscal policy] always works better or even most of the time.

I knew there are lots of smart people who disapproved of stuff like food stamps, uemployment insurance, social security, and the graduated income tax. I just believe they dont belong in the Democratic Party.

I guess the question is whether these programs are viewed as a “safety net” or as “automatic stabilizers.” “Safety net” is pre-Keynes, and y’all might be very comfortable at Chicago. If monetary policy is always so inadequate that some automatic stabilizers are necessary to sustain adequate effective demand (again, you may disagree, and believe a Fed Fund rate cut will feed the hungry children thru the magic of the market), then the question becomes why is monetary Keynesianism always and inevitably a frakking tragic fail.

“I knew there are lots of smart people who disapproved of stuff like food stamps, uemployment insurance, social security, and the graduated income tax. I just believe they dont belong in the Democratic Party.”

What the hey does that have to do with the relative effectiveness of monetary vs. fiscal policy in stimulating aggregate demand?

And we’re not comparing the effectiveness of monetary policy to that of automatic stabilizers here. Very clearly we (and so were Tobin and Friedman) talking about discretionary monetary policy vs. discretionary fiscal policy (quickly skipping over the fact that automatic stabilizers that have to be purposefully adjusted aren’t all that automatic, are they?)

And no, monetary Keynesianism isn’t always and inevitably a frakking fail. In fact, most of the time it works just fine. This just happens not be be most of the time. And yes, the great moderation was real. At least fifteen years of low output fluctuations is pretty real, and yes, better monetary policy was part of the reason behind it. And while the phrases “worst since the Great Depression” and “Great Depression II” can be used to great rhetorical effect, they are for all practical purposes meaningless, seeing as how the gulf between the Great Depression and the previous “worst since the Great Depression” (more or less the Volcker recession) is enormous – a difference between an unemployment rate of 25% and … let’s be generous, an unemployment rate of 11% – there’s a lot of % points (representing a lot lot lot of unemployed people) in between 11% and 25%, just like there’s a lot of lost income between a 30% drop in income and a 5% drop in income.

a difference between an unemployment rate of 25% and … let’s be generous, an unemployment rate of 11%

BLS Dec 2008 shows U-6 at 13.5. Reading the headlines, it is fair to assume we are over 14 already, and with the woeful so-called stimulus package, I would be surprised if we don’t reach a U-6 of 15-17 at peak and remain over 10 for several years.

It is unforgivable, especially because it wasn’t necessary and was predictable. It is apparently hitting youngest workers worse, who will have their entire working lives impacted.

So was the “Great Moderation” worth the price we will be paying? Check Elizabeth Warren, not only are the richest the only ones to benefit, the middle-class has been increasingly damaged over the last thirty years, moving ever more of their incomes to necessities from opportunities, and security. Yes, even with the volatilty of short sharp recessions, the vast majority of people were better off in the 50s thru 70s than in this bubble plutocracy engineered by the Randite and his Berkeley buddies.

I heard that the Cossacks did indeed work for the Czar, until they realized that he and the Tsar were the same guy.

Daniel: “Taking my cue from Jehovah in the Old Testament, I would be prepared to spare the Chicago School if one innocent man could be found there. So basically, unless and until James Heckman comes out with a stinker on the stimulus package, I say let it survive.”

IMHO, the problem of allegedly honest people happily collaborating with the extremely dishonest people is at least half of the problem. This was also a habit of Brad’s of which he has not totally freed himself; his policy was very close to ‘all enemies on the left, no enemies on the right’. When it comes to the point where a single person is used as an argument that an institution is not 100% corrupt, it is indeed time to raze that institution to the ground, and sow the ruins with salt. Note that Norm Ornstein might be used in the same way at AEI.
In the case of U Chic, I’ve heard that 10% of the undergrads are econ majors, which suggests that, in a better world, U Chic itself would get a line of armored bulldozers plowing through it.

In the case of a place like U Chic or AEI, it’s not like we’re destroying a town because there might have been some terrorists in it; we’d be destroying a terrorist base camp and major training facility, and the people getting hit are either terrorists or those who figured that living there and doing business there was profitable.

Daniel :
“It does make you wonder whether economics can ever be the same again – after this experience, can the Berkeley/Princeton/Obama economists ever really go back to a state of polite terms with the people who have done this to them?”

Probably they will; for example note that Summers is technically an Obama economist, but at the core of our current ‘unleash the hounds of financial deregulation’ troubles. Also, see comment #13 – the dominance of right-wing economists can be very self-sustaining, because those who buck them will in general suffer careerwise. Krugman is more the exception which proves the rule, and he had to be a 10th level EconStud *and* have the NYT screw up and hire an honest man to do what he’s done. *And* it still took colossal dishonesty on the part of the right-wing to make him see the light.

What *might* happen is that the next generation of econmics grad students see what’s happened, and refuse to personally accept the Chicago School position. And they’ll have to spend twenty years bucking that system.

What might happen is that the next generation of econmics grad students see what’s happened, and refuse to personally accept the Chicago School position

No, I suspect that the reaction of the profession to the observable fact that it has fucked up in almighty style on the major and important questions of its subject, will be to follow Steven Levitt and withdraw into a cosy little tunnel of twatty books about teachers and dating. This is the only viable self-defence strategy for the economistic ego.

It’s not constant over time; IRRC it’s increased radically since 1980 or so.

In addition, I’d bet that a far larger proportion of the work force falls under the classification of ‘contractors’, and would not be counted as unemployed in the same way as if they were employees.

“The key will be when a newly-minted Ph.D. from Chicago is considered to be a priori a notch below a newly-minted Ph.D. from another top 10 department.”

No the key will be when Chicago is no longer considered to be a top-ten (or top 100) department, with it’s grads only suitable for teaching at odd community college or diploma mill…

Barry — yes, sorry, I meant constant over the past 24 months which is what the data bob linked to measured. It has risen dramatically since the recession in the early eighties and even, I think, since the one in the early nineties.

32: “No, I suspect that the reaction of the profession to the observable fact that it has fucked up in almighty style on the major and important questions of its subject, will be to follow Steven Levitt and withdraw into a cosy little tunnel of twatty books about teachers and dating. This is the only viable self-defence strategy for the economistic ego.”

Sort of the way that political science and international relations reacted to missing the collapse of communism by refraining from further comment about politics and international relations?

In 1709 the Cossacks under Mazeppa rebelled against the Czar and allied themselves with Karl XII of Sweden. But Peter the Great had modernized Russian fiscal policy and the Russian military, and the Russians were able to destroy most of the Cossack forces before they were able to do anything.

In any case, the Cossacks who were still with the Swedes when the Swedes surrendered were regarded as traitors and were impaled. That’s what happens to Cossacks who don’t work for the Czar. Cossacks who work for the Czar have their reasons.

Lest there be any confusion, this is not to suggest that the U of Chicago economists, U of Minnesota economists, be impaled.