Prestige Cross-Pollination
I’ve complained a few times about the habit of distinguished economists using prestige acquired within their field to pass off sloppy work in other fields. Most recently, we saw Greg Mankiw take an interesting paper about the economics of taxing people based on height and turn it into some pretty half-assed moral philosophy. Something similar is going on with Martin Feldstein’s recent op-ed against the Waxman-Markey climate/energy bill.
As Dave Roberts explains, Feldstein’s characterization of the bill isn’t really correct and some of his economic analysis is debatable. But beyond that, the key point on which Feldstein’s argument turns actually has nothing whatsoever to do with economics. Instead, the key move is the observation that US emissions curbs will do little to save the world unless emissions are also curbed in the key developing economies.
This, however, is not a point that anyone disputes. Feldstein’s contribution is the hypothesis that it would be better to forestall any domestic US action until such time as an all-encompassing global agreement can be reached. Whether you think this is right or wrong, this is clearly a proposition about international relations and the domestic politics of China and India rather than a proposition about economic analysis of the Waxman-Markey bill. And it’s not a proposition that anyone actually working in the field of climate policy or diplomatic relations with China seems to agree with.
Obviously, as a blogger I’m not one to say that people should need to know what they’re talking about in order to speak. But real estate on the Washington Post op-ed page is a valuable commodity. Presumably the reason the Post is interested in Feldstein is his expertise in economics. So there’s no reason for them to be running an op-ed whose key contention has nothing to do with economics.
34 Responses to “Prestige Cross-Pollination”
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June 2nd, 2009 at 2:35 pm
It’s also a basic failure to understand that the purpose of a cap and trade bill is not only to reduce emissions within the United States, but to provide an appropriate degree of incentives for companies to develop low-emission alternatives to fossil fuels, along with sequestration technology, etc. Once those technologies exist, they can then be exported to the developing world – and the developing world will want those technologies, not only because most of them care about climate change as well, but also because they are likely to end up more efficient in a variety of ways that will make them more competitive in the marketplace. Not to mention the fact that as a major importer of materials from around the world, adopting more stringent standards for our market will force international producers to make products that fit our specifications – and those products can be sold in other markets as well.
There’s complexity to the issue of how a national cap and trade system will fit together with a future trade agreement. Needless to say, that article completely misunderstands the issue.
June 2nd, 2009 at 2:35 pm
Hell, it would be significant progress for distinguished economists to refrain from sloppy, pseudo-empirical, assertions when engaging in popular punditry that concerns economics!
That you would mention Mankiw and Feldstein for this sort of stuff, without mentioning a certain Nobel Laureate who occupies real estate owned by the Sulzberger family is telling.
June 2nd, 2009 at 2:39 pm
“So there’s no reason for them to be running an op-ed whose key contention has nothing to do with economics.”
YES. THANK YOU!
June 2nd, 2009 at 2:42 pm
Hmmmmm, no greater a sin than Krauthammer getting inches to comment on…..well….anything I guess.
June 2nd, 2009 at 2:44 pm
oh, you mean like Paul Krugman.
June 2nd, 2009 at 2:49 pm
Mankiw’s argument was a straight economic argument that had, from your perspective, some unfortunate conclusions. But that wasn’t a problem with the argument, and didn’t turn the argument into an argument about moral philosophy.
The idea that economics doesn’t have anything to add to understanding coordination problems is a new one to me. Can we say that domestic policy questions are legal questions, and so economists shouldn’t offer arguments there?
June 2nd, 2009 at 2:49 pm
This is a general thing with economists. They think of their background and skill set as being “ability to think rationally about problems”, not “mastery of understanding flow of money”. Thus, they feel empowered to weigh in on any topic, apply a few numbers, and declare victory. The entire Freakonomics blog at the NYtimes works this way. A small cadre of economists and economists-in-training randomly decide they have an insight into something interesting and feel they’ve made a contribution to the understanding of that thing even if they have no understanding of the thing itself or any of its background.
June 2nd, 2009 at 2:52 pm
And you’re wrong on your main point too btw.
Feldstein is right on the international relations proposition about the “domestic politics of China and India.” Given that fact, he’s saying that the cost-benefit analysis of the Waxman-Markey bill doesn’t pan out. So unless you’d like to argue that cost-benefit analysis doesn’t reside within the sphere of economics, your point makes no sense.
June 2nd, 2009 at 2:56 pm
Johnson, the existence of a cost-benefit analysis in something doesn’t make it economics. To properly analyze the costs and benefits of various strategies requires deep understanding of the processes involved, not just experience setting up equations.
June 2nd, 2009 at 3:01 pm
You could say the same thing about Paul Krugman. And conservatives used to do that all the time.
June 2nd, 2009 at 3:11 pm
Actually, although I’m a fan of Krugman, I do think the same criticism could apply to him in some instances. Specifically, he sometimes seems to lack insight into how politics actually works, or simply chooses to neglect the subject.
Krugman is an excellent pundit on economic policy issues. He also has been an eloquent and incisive critic of the incompetence and dishonesty of Bush-era Republicans (which generally didn’t require much expertise – just some basic knowledge, common sense, and forthrightness). I definitely wouldn’t defer to his opinions on politics in general, however.
June 2nd, 2009 at 3:19 pm
AP, by your rationale, no one is qualified to perform cost benefit analysis. The scientists don’t know anything about economics (the costs). So who does that leave?
June 2nd, 2009 at 3:25 pm
It doesn’t take an economics background to understand that there are trade-offs in a system. What’s hard is understanding the system and knowing what the trade-offs are. B-C=U. There. Economist done. Go figure out what B and C are. Don’t expect the economist to have further useful insight.
June 2nd, 2009 at 3:27 pm
I think the real problem is that nobody really has the expertise required to give the correct answer to whether a piece of cap and trade legislation should pass. There is a deep tendency for people to try to remove uncertainty by handing the problem to economists or financial engineers. It would be better if people would just admit uncertainty and stop trying pass the buck onto economists.
June 2nd, 2009 at 3:32 pm
No one’s passing the buck to economists.
Economists are looking over the shoulder of politicians trying to solve the climate problem, interjecting “I’m a genius, you’re all morons. Let me fix it!”, grabbing the buck, and breaking it.
June 2nd, 2009 at 3:42 pm
So since scientists may only remark on science, foreign policy gurus only on foreign policy and economists . . . I guess nothing (because according to you, setting up a sophisticated auction market to price negative externalities has anything to do with economics), I guess the only one who can have any sort of opinion on the big picture is the decider, Barack Obama. Maybe you would have preferred an op-ed by an oil executive to lay out the costs, since they understand “the system.”
At the very least, this issue has an economic component. I trust you’ll protest vehemently the next time Krugman writes about torture, racism or the Supreme Court. Probably not though, since the type of scorn found in this post is only reserved for columnists who write things liberals disagree with.
June 2nd, 2009 at 4:03 pm
I don’t know why Matt keeps returning to this topic since, as he says himself,
Obviously, as a blogger I’m not one to say that people should need to know what they’re talking about in order to speak.
And he proved it in his first post on this theme, talking about an imaginary Eco101:
Obviously economics has not adopted such a philosophy, and social welfare functions can be chosen to predict almost anything; furthermore; the most common one predicts the opposite of what Matt claims.
All bloggers are not equal and young, inexperienced ones like Matt shouldn’t try to sound authoritative on subjects they know nothing about.
June 2nd, 2009 at 4:11 pm
johnson:
The difference between Krugman, Feldstein and Mankiw is that when Krugman isn’t talking economics, he isn’t pretending to speak ex cathedra. He’s usually just giving his informed opinion, which is certainly no worse than say Thomas Friedman’s.
Feldstein gets highhanded even on issues which he is not qualified to comment on. “In my judgment, the proposed cap-and-trade system would be a costly policy that would penalize Americans with little effect on global warming.”
His argument it will “little effect on global warming” is predicated on the lack of foreign agreement. Like Matt, I’m not clear how 30 years of teaching Ec 10 at Harvard to future MBAs has given him this tremendous insight into international politics.
June 2nd, 2009 at 4:14 pm
Economist done. Go figure out what B and C are. Don’t expect the economist to have further useful insight.
Economics has nothing to say about what the costs or benefits of policy X are? I find that doubtful.
June 2nd, 2009 at 4:25 pm
Why oh why:
The most common social welfare function used by economists when speaking on public issues is obviously none at all. i.e. concern solely for growth of the overall economy and not at all for individuals.
I have never seen an economist (other than a few very liberal ones) discuss social welfare in a public setting or opinion piece. It’s always growth, as DeLong points out.
It doesn’t matter what is in the textbooks or what’s used in models. It’s sophistry. It has zero influence on their public pronouncements.
June 2nd, 2009 at 4:31 pm
Economics has nothing to say about what the costs or benefits of policy X are? I find that doubtful.
How much they have to say kind of depends on what “policy X” actually is.
For example, if we want to know the potential costs vs. benefits of spending hundreds of billions of dollars on a system to protect the planet from giant asteroids, it would help to know the likelihood of a giant asteroid strike in the absence of such a system. I imagine that an astronomer might have more insight into that question than an economist would.
June 2nd, 2009 at 4:38 pm
hahaha, so “in my judgement” doesn’t constitute offering what you call “his informed opinion”? Did I miss the sentence in his article where he invoked the doctrine of papal infallibility? For your point to hold, the Waxman-Markey bill would need to have nothing to do with economics. But last I checked, the ECONOMISTS at the CBO will be giving this bill a score, something Klein and Yglesias will no doubt blog about and take seriously, suggesting that even they themselves agree that the opinion of economists has at least some bearing on the matter.
You cheapen Feldstein by saying his experience consists of “30 years of teaching Ec 10″, when you no doubt know, he has had a long and distinguished career, both inside and outside of government. And as Matt himself admits, by his own standard, I’m not sure why he’s qualified to remark on anything at all. He has no particular expertise in anything.
June 2nd, 2009 at 4:40 pm
Yes theo, but if economists actually followed religiously an utilitarian philosophy (as Matt claimed), under fairly common assumptions they would advocate the opposite of what Matt says.
Anyway my point was more: trying to prove how dangerous it is to let economists talk about social or scientific issues, Matt mostly proves how dangerous it is to let Philosophy majors talk about economics.
June 2nd, 2009 at 4:41 pm
The “prestige cross-pollination” theory is a good way to hide your actual theory – that when economists say things you don’t agree with, they are wrong and should stop saying them.
Unsurprisingly, you don’t abide by this theory while praising Paul Krugman’s misguided forays into public policy and politics. For him, we are instead supposed to believe that his Nobel Prize for his research in international trade makes him a leading expert on health care, global warming, and the Middle East.
June 2nd, 2009 at 4:57 pm
Paul Krugman’s misguided forays into public policy and politics
Such as: opposing the Iraq War, Bush tax cuts, warning us about that housing bubble in 2005…
Obviously this has nothing to do with his achievements in economics, but very few pundits and politicians made the right call so often. So no, there is no equivalency between Krugman and people like Mankiw and Feldstein.
On the other hand, if you call opposing the Iraq War being “misguided”…
June 2nd, 2009 at 5:00 pm
Johnson,
You cheapen Feldstein by saying his experience consists of “30 years of teaching Ec 10″, when you no doubt know, he has had a long and distinguished career
You’re right. I should certainly have mentioned his lengthy service on the AIG Board of Directors. And as Reagan’s economic advisor, he really kept the deficit under control.
Feldstein has a record of failure, but he’s a Very Serious Person and it would be impolite to mention it.
The best thing that can be said for him is that he’s successfully indoctrinated Harvard students for 30 years. Go Crimson!
p.s. as for “in my judgment” — yes, he’s speaking with authority when he has no credentials or knowledge about international relations. If he wants to raise questions, fine, but he shouldn’t be judging anything.
June 2nd, 2009 at 5:02 pm
For example, if we want to know the potential costs vs. benefits of spending hundreds of billions of dollars on a system to protect the planet from giant asteroids, it would help to know the likelihood of a giant asteroid strike in the absence of such a system. I imagine that an astronomer might have more insight into that question than an economist would.
True, but we would also need to know the costs that would occur if the asteroid stuck. And an economist would probably be more useful than an astronomer at that job.
June 2nd, 2009 at 5:06 pm
Mankiw, on the other hand, has nailed the first half of Feldstein’s career trajectory, i.e. major economic advisor to an economically failed administration. I expect the second half, oversight over a corporate financial catastrophe, will come within the next 30 years or so.
June 2nd, 2009 at 5:44 pm
[...] 2, 2009 by smallin Matthew Yglesias doesn’t appreciate the “habit of distinguished economists using prestige acquired [...]
June 2nd, 2009 at 6:21 pm
Lawyers are the worst for thinking that, just because they went to law school, they are qualified for any job under the sun. Generalist journalists are also guilty of this problem.
June 2nd, 2009 at 8:33 pm
“And it’s not a proposition that anyone actually working in the field of climate policy or diplomatic relations with China seems to agree with.”
What exactly are you claiming here, Matt? Regardless of the Feldstein issue, it seems like you are saying that plenty of experts in the field of climate policy or international relations or suchlike believe an agreement can be reached between nations (specifically between the US, India and China) that will actually have worthwhile effects on limiting the rate of increase of CO2.
I see no evidence to justify this claim. Sure, there are plenty of people HOPING it will happen, there are plenty of people telling you the bad things that will happen if it doesn’t take place; but I see NO-ONE willing to stand up and say such an agreement has much chance of occurring. Instead what I hear about from experts is all the many reasons why China and India will keep burning coal for the intermediate future.
The US may or may not reduce emissions, who knows. But ultimately it doesn’t matter. There are too many people on earth; those people all want to improve their lives; and for most of them the route to improving their lives involves burning coal.
June 3rd, 2009 at 8:57 am
Yglesias criticizing others that they are commenting on things they know nothing about….the mind reels at the levels of self-deception.
June 3rd, 2009 at 11:46 am
I am sorry, but the first thought that popped in my mind after reading the first sentence is Paul Krugman. Come on. Feldstein isn’t a whackjob.
I also read a similar item by Chait on TNR; I cannot judge the substance, but on first read what Feldstein says seems arguable.
June 4th, 2009 at 12:27 pm
[...] Matthew Yglesias: Feldstein’s contribution is the hypothesis that it would be better to forestall any domestic US action until such time as an all-encompassing global agreement can be reached. Whether you think this is right or wrong, this is clearly a proposition about international relations and the domestic politics of China and India rather than a proposition about economic analysis of the Waxman-Markey bill. And it’s not a proposition that anyone actually working in the field of climate policy or diplomatic relations with China seems to agree with. [...]