What prompted this question was seeing this release from Senator Portman (as well as this tweet) extolling the Tax Cuts and Jobs Act, appealing to the opinion of “137 economist”. Here’s the list:
James C. Miller III, Former OMB Director, 1985-88
Douglas Holtz-Eakin, American Action Forum
Alexander Katkov, Johnson & Wales University
Ali M. Reza, San Jose State U (Emeritus)
Ann E. Sherman, DePaul University
Anthony B. Sanders, George Mason University
Anthony Negbenebor, Gardner-Webb University
Arthur Havenner, University of California, Davis
Austin J. Jaffe, Penn State University
Barry W. Poulson, University of Colorado
Boyd D, Collier, Tarleton State University, Texas A&M University System (Emeritus)
Brian Stuart Wesbury, Joint Economic Committee
Carlisle E. Moody, College of William and Mary
Charles W. Calomiris, Columbia University
Christine P. Ries, Georgia Institute of Technology
Christopher C. Barnekov, FCC (Retired)
Christopher Lingle Universidad Francisco Marroquin
Clifford F. Thies, Shenandoah University
Daniel Fernandez Universidad Francisco Marroquin
Daniel Houser, George Mason University
David H. Resler, Chief US Economist, Nomura (Retired)
David Ranson, HCWE & Co.
Dennis E. Logue Steven Roth Professor, (Emeritus) Tuck School, Dartmouth Colleges
Derek Tittle, Georgia Institute of Technology
DeVon L. Yoho, Economist Ball State University (Retired)
Donald J. Oswald California State University, Bakersfield (Retired)
Donald Koch, Koch Investments
Donald L. Alexander, Western Michigan University
Donald Luskin, TrendMacro
Douglas C Frechtling, George Washington University
Douglas Kahl, The University of Akron
Douglas O. Cook, The University of Alabama
Kingdon Hurlock Jr., Calvert Investment Counsel
Edward M. Scahill, University of Scranton
Eleanor Craig, University of Delaware
Owen Irvine Michigan State University (Emeritus)
Farhad Rassekh, University of Hartford
Francis Ahking, University of Connecticut
Frank Falero, California State University (Emeritus)
Gary R. Skoog, Legal Econometrics, Inc.
Gary Wolfram, Hillsdale College
Gene Simpson, NPTC, Auburn University
George Langelett, South Dakota State University
Gerald P. Dwyer, Clemson University
Gil Sylvia, University of Georgia
H Daniel Foster, HDFCO
Hugo J. Faria, University of Miami
Inayat Mangla, Western Michigan University
Edward Graham, UNC Wilmington
Jagdish Bhagwati, Columbia University
James B Kau, University of Georgia
James C.W. Ahiakpor California State University, East Bay
James D. Adams, Rensselaer Polytechnic Institute
James D. Miller, Smith College
James F. Smith, EconForecaster, LLC
James Keeler, Kenyon College
James M. Mulcahy SUNY – Buffalo economics department
James Moncur, University of Hawaii at Manoa
Jeffrey Dorfman, University of Georgia
Jerold Zimmerman, University of Rochester
Jody Lipford, Presbyterian College
John A. Baden, Chm., Foundation for Research on Economics and the Environment (FREE)
John C. Moorhouse Wake Forest University (Emeritus)
John D. Johnson, Utah State University
John H McDermott, University of South Carolina
John McArthur, Wofford College
John P. Eleazarian, American Economic Association
John Ruggiero, University of Dayton
John Semmens, Laissez Faire Institute
Joseph A. Giacalone, St. John’s University, NY
Joseph Haslag University of Missouri- Columbia
Joseph S. DeSalvo University of South Florida – Tampa
Joseph Zoric Franciscan University of Steubenville
Kathleen B. Cooper, SMU’s John Tower Center for Politico Science
Kenneth V. Greene Binghamton University (Emeritus)
Lawrence Benveniste Goizueta Business School, Emory University
Lawrence R. Cima, John Carroll University
Leon Wegge, University of California, Davis
Lloyd Cohen, Scalia Law School
Lucjan Orlowski, Sacred Heart University
Lydia Ortega, San Jose State University
Northrup Buechner, St. John’s University, New York
Maurice MacDonald, Kansas State University
Michael A. Morrisey, Texas A&M University
Michael Connolly, University of Miami
Michael D Brendler Louisiana State University Shreveport.
Michael L. Marlow, Cal Poly, San Luis Obispo
Moheb A. Ghali, Western Washington University
Nancy Roberts, Arizona State University
Nasser Duella, California State University, Fullerton
Nicolas Sanchez, College of the Holy Cross, Worcester, MA (Emeritus,)
Norman Lefton, Southern Illinois University, Edwardsville
Paul H Rubin, Emory University
Pavel Yakovlev, Duquesne University
Pedro Piffaut, Columbia University
Peter E. Kretzmer, Bank of America
Peter S. Yun, UVAWISE (Emeritus)
Phillip J. Bryson Brigham Young University (Emeritus)
Ashley Lyman, University of Idaho
L. Promboin, University of Maryland University College (former)
Richard J. Cebula, Jacksonville University
Richard Kilmer, University of Florida
Richard Timberlake, Prof. of Econ., Univ. of Ga. (Retired)
Richard Vedder, Ohio University
Robert B Helms, American Enterprise Institute (Retired)
Robert F Stauffer, Roanoke College , (Emeritus)
Robert H. Topel, University of Chicago Booth School of Business
Robert Heller, Former Governor, Federal Reserve Board
Robert Sauer, Royal Holloway University
Robert Tamura, Clemson University
Roger Meiners, University of Texas-Arlington
Sanjai Bhagat, University of Colorado Boulder
Scott Hein, Texas Tech University
Seth Bied, New York State Tax Department
Stan Liebowitz, University of Texas
Stephen Happel, Arizona State University
Craig Tapley, University of Florida
Thomas H. Mayor, University of Houston
Thomas J Kniesner, Claremont Graduate University
Thomas M. Stoker, MIT (retired)
Thomas Saving, Texas A&M University
Timothy Mathews, Kennesaw State University
Tomi Ovaska, Youngstown State University
Tony Lima, California State University, East Bay
Victor a Canto, La Jolla economics
Vijay Singal, Navrang Inc
Wallace Hendricks, University of Illinois
Ward S. Curran Trinity College Hartford Connecticut (Emeritus)
Wayne T. Brough, FreedomWorks Foundation
William B. Fairley, Analysis & Inference, Inc.
William Buchanan, Valdosta State University
William McKillop, Resource Economics (Emeritus)
William R. Allen UCLA Department of Economics
William S. Peirce Case Western Reserve University
Wim Vijverberg, CUNY Graduate Center
Xuepeng Liu, Kennesaw State University
Yuri N. Maltsev, A.W. Clausen Center for World Business, Carthage College
As pointed out in this article some of the individuals are either retired, do not work as economists, or do not remember signing (Seth Bied).
A bit of googling reveals that some of the folks don’t have an advanced degree in economics (CFAs or the like), or have an undergraduate degree in economics (true of Donald Koch, as well as Mr. Bied). [addendum: “policy analysis” also counts, since most curricula these days is centered on economics] So do these individuals count as economists? I’d say yes (kinda), while maybe not always “practicing economists” (Mr. Bied’s title is office assistant). And while John P. Eleazarian has been disbarred for forging a judicial signature and seal, he does have a MA in Economics, so he too I’d count as an economist.
On the other hand, Don Luskin, who does not apparently have an undergraduate degree (in anything), I would not count him as an economist despite being CIO of a purported macroeconomics consulting firm (being an investor is not the same as being an economist). I’d also say that stating on September 15, 2008, just before the deepest downturn since the Great Depression:
“Things today just aren’t that bad. Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about Wall Street firm Lehman Brothers, amply demonstrate. And unemployment figures are up a bit, too. None of this, however, is cause for depression — or exaggerated Depression comparisons.”
This is the same guy who’s now saying, yeah, bring on that highly regressive (and becoming ever more so) tax cut. So, for me, make that “136 economists” and one disbarred lawyer for the tax package.
Menzie, what was your point? After singling out one signer whose opinion you disagree, and complaining about the progressiveness/repressiveness of the current versions of the tax reform bill, are you volunteering to give back any decrease in your taxes?
After Democrats serially misrepresenting (that’s lying in deplorable-land) and repeating the “tried and tested” Tax cuts for the rich, the Bill passed will be Republican (only or primarily). That also means any economic impacts will be solely Republican. Just like the obvious different economic results between the Obama and the Trump administrations, deplorable-land dwellers will know and feel the results. As they did in the Obama administration.
One major difference in this Bill is the attention shown to the rich urban-centric, liberal-land dwellers. Is that the repressiveness to which you refer?
The vast majority are economists or in academic finance. Many are in applied fields, eg, agriculture or natural resources. I think the characterization as ‘economists’ is materially correct.
Not that I am a fan of the legislation. I would be, if they put this in:
http://thehill.com/opinion/white-house/363820-trump-can-win-on-deficits-solve-the-debt-ceiling-and-own-congress-forever
OK – most of the 137 were economists. But what they signed was devoid of any economic logic. I guess some economists will sign anything no matter how nonsensical it is.
The federal debt is now 900 times bigger than in 1933 at the nadir of the Great Depression and the dollar is the reserve currency of the world’s economy. Inflation and interest rates are at historic lows and we are at full employment. Were we better off in 1933 when the debt was only $22 billion?
When did our federal debt ever hurt us? Name the time or admit you are wrong.
“The federal debt is now 900 times bigger than in 1933”.
Now that is a dramatic statement. Of course nominal GDP is now 327 times what it was in 1933, Some of this nominal increase is from high real GDP granted but a lot is from a higher price level. Try doing this in real terms if not relative terms.
PGL, answer Paul’s question instead of deflecting.
In 1929, the debt-to-GDP ratio was 16%. Were we better off then?
We have seen an increase in the debt/GDP ratio but not by a factor of 900. Of course the ratio of debt/GDP is not exactly a predictor of the state of the economy. Sure fiscal austerity during a period of weak aggregate demand is dumb fiscal policy. Last I checked we have come close to getting back to full employment. So the logic of massive tax cuts for the rich night now is ????
I think it’s relatively clear that debt has, in fact, hurt us enormously–but not due to its level.
As I have argued on several occasions, we have a non-market failure with respect to national debt. The Republicans are for lower taxes, and the Democrats are for higher spending. But neither cares about debt, for the reason that voters cannot directly assess the impact of debt. Do you know your pro rata share of the national debt? I don’t. Thus, the US and other democracies have a debt bias. Note that Obama ran up the debt and left us a structural deficit. The Republicans are looking to add to this.
Unaccountable debt allows governments to undertake spending programs without having to raise taxes. As such, debt becomes ‘free money’, with no ROI requirements. We are funding social programs — current spending, not investment — with debt.
As I point out in my article in The Hill, permitting politicians to spend the taxpayers’ money without a personal incentive to use it wisely will ultimately lead to bloated spending and low GDP growth — exactly as we see in Europe, and more recently, the US. This in turn means that GDP is far lower over time than it should have been. That is the lesson of Singapore.
So, yes, debt has made GDP perhaps 1/3 lower than it should have been. However, the debt is really more than symptom than the cause of weak governance.
http://thehill.com/opinion/white-house/363820-trump-can-win-on-deficits-solve-the-debt-ceiling-and-own-congress-forever
“bloated spending and low GDP growth — exactly as we see in Europe, and more recently, the US.”
Germany is doing just fine last time I checked. Japan, with a 230% debt to GDP ratio, has 1% inflation and unemployment under 3%. China has god-only-knows how much debt, but its Real GDP growth over the past 2 decades has averaged 8% which is more than triple the U.S. rate for the past 20 years. https://fred.stlouisfed.org/series/CHNGDPRAPSMEI
During the 1920s, there was a budget surplus every year and 4 separate recessions during that decade with the last one resulting in the Great Depression. In 1929 the debt-to-GDP ratio was 16% due to those budget surpluses. Everyone understood at the time that those surpluses were a major cause of the Great Depression, but we have forgotten their wisdom.
For the past 5 years, our debt-to-GDP ratio has been over 100% with no recessions, but with steadily rising employment, falling unemployment, rising wages and the lowest inflation of the past 50 years. We should have learned the lessons Keynes taught us 80 years ago, but we are not willing to learn and so budget deficits have become a political obsession.
Paul –
I couldn’t disagree with you more.
Let’s start with Germany. In 1985, Germany’s per capita GDP (2011, PPP basis) was 112% of Singapore’s. Now it’s 55%. To my mind, that is total, abject failure of macro policy over a very long period.
Japan. I have written about Japan, for example, at the National Interest. We have discussed this topic here at length. But here’s the deal. Japan’s workforce is shrinking every year, and with it, interest rates are falling towards zero. Now, you are arguing that interest expense should no longer be the bound on borrowing; rather it should be the total balance of the debt; that is, a state should borrow until markets are simply unwilling to lend it more. Now, this is fine if interest rates stay at zero forever and there is no refinancing risk. An interest rate rise of 1% of 230% debt to GDP is 2.3% of GDP as the interest rate works its way through the system. In terms of fiscal policy, that’s a whopping big number. Now, keep in mind that the Japanese are already heavily taxed and their workforce is shrinking. So it’s not like you can raise tax rates by that 10-15% or so to pay cover a rise in interest rates. So you either have to cut spending pari passu, or pay back debt with unsterilized yen. In other words, you’ve created a banana republic.
On the other hand, East Asia may experience a financial crisis like in did in 1998, in which case, lenders may be simply unwilling to refinance Japan full stop. In this case, again, Japan has to either cut spending pari passu or print its way out of the hole. Again, banana republic.
You may think the Latin American-style fiscal and monetary policy is a good template to use. I don’t. I was born in Latin America and we left it for a very specific reason (read the previous two paragraphs).
As for Keynes. Keynesians generally hold that the budget should be balanced over the cycle. We borrowed 35% of GDP, and we’re still running a 3% deficit–at fully employment! And it gets worse, with the deficit on track to reach 6% of GDP by 2030. Again, you want to live in a banana republic. I have lived in one. Not interested in doing it again.
Steven Kopits Note that Obama ran up the debt and left us a structural deficit.
Actually, this is not true. The cyclical deficit increased in the first couple years of the Obama Administration, as it should have during a deep recession. But the structural deficit was actually declining. The structural deficit represents the deficit at full employment; i.e., it’s the long run steady state deficit. That was declining during the Obama years….and declining too fast in my opinion.
Pres. Obama and Congress reduced the federal budget deficit by 75% (as a percent of GDP) from FY 2009 through FY 2015 during a recovery from the worst recession since WW II—something that was never done during any previous recovery—and that is the cause for our slowest economic growth in the post-WW II era.
Even Pres. Hoover increased the deficit during the Great Depression from FY 1931 through FY 1933 and Pres. Reagan tripled the federal debt and ran record budget deficits for years to end the recession of the early 1980s that was the then worst since WWII.
3% deficit at the top of the cycle. We should have a surplus of at least 2%, given how much we borrowed during the Obama years. And it gets worse. The Democrats left a big hole in the budget. And the Republicans are now trying to make it bigger.
The underlying fiscal situation of the US is abysmal. If it weren’t, I’d be more accommodating of tax cuts.
@Steven Kopits
I enjoyed your article particularly this sentence: “Rather than railing against venality, we need to use it as a tool to create faster growth and a more balanced budget.”
I like the idea in principle, but how long do you think it would take for the goal posts to be moved?
Using venality. Well, that, of course, is pure Adam Smith. I have long argued that there is no carve-out for politicians. I expect politicians, like everyone else, to work in their own self interest. If I haven’t aligned my interest with theirs, I have only myself to blame if they fail to act as I would like them to.
It could take forever to move the goal posts. I have gotten beaten up for two of the perhaps 70 articles I’ve written over the last decade. This was one of them. On the other hand, if Corker and Flake made it a condition of tax reform, you could have it next week. (Not likely, though.)
No one really likes the idea, because everyone wants something for nothing and to think of political leaders as parental figures, not as well paid employees.
Put another way, people want politicians to ‘serve the people’, but they have really no idea what this means. With a three ideology model, it really means three different objective functions, of which I have elevated the second–fiscal conservatism– as the one I think most important right now.
The most cogent contra argument could come from an egalitarian like Menzie, who could argue that it would lead to too little egalitarian spending. (As you’ll recall, egalitarians only know how to do ‘benefit analysis’ (free healthcare, free education, etc.) not ‘cost/benefit analysis’. This system enshrines cost/benefit analysis as the guiding principle in the remuneration of politicians.
My counter to the egalitarian line of reasoning is four fold:
1. If voters think politicians spend too little on egalitarian programs, the voters can vote them out.
2. The failure to apply real cost/benefit analysis over decades will make you poor–as it has the Germans, the US (to a lesser extent) and the Italians (to a very great extent).
3. No one is starving in Singapore. Curiously, a fiscally conservative regime may also prove to be socially conservative or egalitarian. Put another way, a bonus plan would professionalize politics (and economics, by the way). Professionals may view it as their job to manage society, rather than talking about managing society.
4. The viability of democracy depends upon the voters belief in its ability to deliver. Voters certainly didn’t believe that in 2016, hence Trump, Macron and Brexit. Paul up above is hell bent to turn the US into a banana republic. I am hell bent to try to prevent that and to sustain confidence in competence of the political system. No better means to do that than with performance-based bonuses. Bonuses will destroy extremism left and right, and do so immediately. Can you imagine if Menzie and I each had a $500k bonus hinging on our ability to work together to achieve mutually acceptable policy? You think we might be able to come to some sort of mutually acceptable view? I am guessing that we would.
Judging by CNN coverage, Stephen goddamn Moore is the highest authority in all of economics.
Unless you have read The General Theory of Employment, Interest, and Money at least once, you are not an economist. I think there are actually very few economists by this standard.
MMMMM???? I guess I could be an economist. I have been reading economics blogs since 2000.
I have a feeling many were asked to sign cause it would piss off liberals.
Remember this back in early 2003?
ttps://www.treasury.gov/press-center/press-releases/Pages/js28.aspx
“250 Economists Endorse President Bush’s Jobs and Growth Plan”
Luskin signed this nonsense too. He added that his 250 “economists” could beat up the 450 economists who disagreed.
“Krugman’s characterization of Luskin as a stalker was repeated by blogger Atrios (Duncan Black) prompting a threat of legal action from lawyers representing Luskin.” (Wikipedia). Unbelievable!
Because I haven’t commented (even read) on any of your posts in a long time, I was persuaded to read this post give its attention grabbing title. After reading I’m still not clear of the Menzie Chinn litmus test in determining this specific designation. Are you saying not having a degree is what constitutes someone from being an economist? Would you consider Luskin an economist if he had an undergraduate degree in business admin? What if he had an MBA? Does someone have to have a degree in econ to be an economist? And why?
rtd: Welcome back. No I’m not saying: “Are you saying not having a degree is what constitutes someone from being an economist?” as this sentence makes no sense.
My criterion is that someone has to have at least majored in economics, or received a post-graduate degree in economics, finance, political economy, to be an economist. I’ve taught intro econ., intermediate econ, master’s level econ and Ph.D. level econ, and I have a feeling for what at least a student is exposed to in these courses (I suspect this is more experience than you have in this regard — just like I don’t pretend to know what constitutes being a geologist).
I’m not saying that there is a monotonic relationship between training and being a *good* economist — there are no doubt some individuals who’ve received a Ph.D. in economics that have less understanding of the economics literature and economy than someone with a B.A. in economics. However, if you’ve never had exposure to a wide set of economics classes, I don’t see how you can be a student and expert in economics. (If one had an MBA, I’d say that wouldn’t necessarily make one an economist — one could get by with a intro micro course, and have the rest in marketing, etc.)
“My criterion is that someone has to have at least majored in economics, or received a post-graduate degree in economics, finance, political economy, to be an economist.”
Do you not consider Jerome Powell to be an economist? Also, I’m fairly certain there are other FOMC members who do not meet your standards (political science majors, MBAs, etc). As someone who has an undergraduate degree and master’s in econ in addition to working as an economist and doing adjunct work for principles- level courses, I certainly know of people who are more of an “economist” who don’t meet your criteria than some who do. The following is a bit shocking and rather disappointing coming from an educator who is living in the 2010’s: “if you’ve never had exposure to a wide set of economics classes, I don’t see how you can be a student and expert in economics” (I suspect I have more experience interacting with people who have real-world exposure than you do). I suspect your view is generally correct while simultaneously extremely short-sighted and ignorant.
rtd: No, I don’t consider Mr. Powell an economist; and I suspect he wouldn’t self-identify as one, from what I’ve heard. I think you believe FOMC members have typically self-identified as economists. Those who have knowledge of the institution realize that only recently have Fed governors and Fed bank presidents been likely to be economists.
You can suspect that you have more experience interacting with people who have real-world exposures than I do all you want. I was born in rural eastern Washington, grew up in Seattle suburbs, my parents were immigrants, my father worked as a cook and bartender, my mother a seamstress in a garment factory. My first job after a short stint in a call center was swing shift in an aluminum anodizing factory (so I wore a hardhat!). I took a semester off of undergraduate to work because *I didn’t have enough money to pay for tuition/room and board*. So do you want to compete on “real world exposure”? I look forward to hearing your “real world experiences” that better qualify you for understanding real world concerns and interactions.
Interesting. No, I make no assumption as to how FOMC participants self-identify. Just that central banking is… economics. I would consider Powell and others to be economists despite their (unfortunate lack of) formal training.
I should have been more clear but given the topic at hand I was expecting/hoping you would’ve read in context. My comment was about real-world exposure of economics and training outside the classroom (hence, the “I certainly know of people who are more of an “economist” who don’t meet your criteria than some who do” comment). In my professional experience I know of many individuals without formal training in economics who have a better understanding of the field than those with formal training. Again, “I suspect your view is generally correct while simultaneously extremely short-sighted and ignorant”.
In any case, if you desire to “compete on “real world exposure”” (whatever the hell that means), I’d be happy to but that wasn’t my interest. A war of words with you is always so entertaining as you’re easily excited and confused. How shall we “compete”?
rtd: Ah, real world experience, as in a financier. Well, let me just refer to this obscure quote:
“However, if you’ve never had exposure to a wide set of economics classes, I don’t see how you can be a student and expert in economics. ”
So John Maynard Keynes was not an economist! Wow.
Paul Mathis: Good point, although I was referring to current times (I should have been more explicit; obviously when Adam Smith was around, he’d had no “economics” classes per se), and it is kind of an exceptional case, as his father was an economist.
Al Roth must not be an economist.
rtd: I’ll allow operations research, pretty close to old-style (pre-google Varian) micro.
“Ah, real world experience, as in a financier.” are you saying monetary policy is not economics?
Also, I think you’re misapplying the quote.
rtd: If I deploy funds in a way that makes excess returns, that’s what I call being a financier. One might or might not understand the forces that result in that outcome. Trying to understand those forces using models that incorporate prices, quantities, information sets, etc., would make one an economist, and typically (although there are always exceptions) one needs some formal training these days to do so. Having the formal training is no guarantee that one can do it well, and not having it doesn’t mean it’s impossible to pick it up on your own. But I think there are few that could wade their way through the Obstfeld-Rogoff textbook without background.
By the way, if I make money by stiffing my contractors out of their payments, and threaten to sue them if they keep on trying to get paid for services rendered, I might make money (especially if I inherit a bunch to work with), but that doesn’t make me an economist.
I wouldn’t think many people (myself included) would consider someone who deploys funds in a way that makes excess returns to be enough to be an economist. But I am surprised to hear that you don’t consider central bankers to be economists. I would consider someone who sets and implements the goals of monetary policy as well as oversee various regulations both of which to guide the macroeconomy is an economist – not necessarily a good one, but an economist nonetheless.
“By the way, if I make money by stiffing my contractors out of their payments, and threaten to sue them if they keep on trying to get paid for services rendered, I might make money (especially if I inherit a bunch to work with), but that doesn’t make me an economist.” I’m certainly not claiming anyone like that to be an economist because of “making money” & I’m confused as to your point.
I wonder if you consider Elinor Ostrom as an economist. Or Gordon Tullock. Should I include game theorists Nash, Aumann, and Shapley as non-economists? What about Kahneman? Just curious…
rtd: Gary Cohn heads NEC in the White House. So he has practical experience managing the economy; made money at Goldman Sachs (wasn’t he head?). But has no degrees in econ. So I wouldn’t count him as an economist. And still wouldn’t have, even if he’d been tapped to be Fed chair.
Point I was trying to make was being a financier (the practical aspect or real world aspect of economics) doesn’t make one somebody who tries to understand the forces that drive the economy.
I do consider the folks you mention as economists to the extent they fulfill the latter objective. But they are rare birds. And note that the earlier in time we go, the less applicable my rule — there were a lot more autodidacts in the 17th century than now. So remarkable people can break the rules. I don’t think Mr. Luskin fits into that category.
“Point I was trying to make was being a financier (the practical aspect or real world aspect of economics) doesn’t make one somebody who tries to understand the forces that drive the economy.” Agreed but I don’t know why you are brining this up b/c I don’t recall making this assertion.
“I don’t think Mr. Luskin fits into that category.” I don’t recall saying Luskin is an economist.
You claim that “somebody who tries to understand the forces that drive the economy” is an economist (i think this is your claim – please correct me if I’m misunderstanding). And then you claim “I do consider the folks you mention as economists to the extent they fulfill the latter objective” with the latter objective being the preceding sentence (i think this is your claim – please correct me if I’m misunderstanding). As such (if I’m understanding your claims), I’m baffled that you don’t consider a central banker without formal economics training to be an economist. I have no reason to think that Mr Powell isn’t “somebody who tries to understand the forces that drive the economy” but I could very well be mistaken.
rtd: I didn’t say you indicated he *was* an economist. My point is that he’s the one person who didn’t fit my criteria. My point is — given the current conditions and the nature of economics in the 21st century — it’s reasonable that anybody who claims to be an economist needs to have some training in the field, which is approximated by having at least an undergraduate degree (minor if you want) in economics or related field (op research counts, as does political economy). If behavior economics as a field had existed in the 1970s, then Kahneman would’ve fit my criteria…
I don’t think this too crazy a way to define things in the post-WWII era.
Also you stated that “being a financier” is “the practical aspect or real world aspect of economics” which is extremely shocking and ignorant coming from an economist. Such a phrase sounds like something from the mouth of an individual with zero knowledge of economics. Certainly it is “a single” practical aspect or real world aspect of economics but certainly not “the”. Your liberal blue-tinted glasses seem to be making you blind(er).
You talk a/b your point but I feel your point is that you hate Trump and anything republican. Your title and the post itself seem disingenuous. And it seems that our back-and-forth has proven me correct – you don’t truly seem concerned with the question “What Constitutes “an Economist”” as your criteria has changed with our exchange. Just be honest and don’t try to hide behind your ivory tower…
IMO, this has been a great thread and illustrative discussion. To me, someone (cough cough) who can’t/doesn’t discern between normative and positive economics is missing a big piece of…. economics. Particularly someone (cough cough) who is an…. economist. The reason I have avoided commenting on your posts and in fact I hardly read your posts despite visiting this blog multiple times each day is precisely because of posts such as these. Oftentimes someone who follows a positive approach, yet isn’t a formally trained economist, trumps a formally trained economist who follows a normative approach. You fit into the latter far, far too often.
I can’t believe that I failed to mention possibly one of the best examples of someone “who tries to understand the forces that drive the economy” in today’s macroeconomy. Someone who is one of the most outspoken about the macroeconomy and monetary policy presumably after trying to “understand the forces that drive the economy”. Someone who has spoken out about the Fed continually missing its dual mandate presumably after trying to “understand the forces that drive the economy”. Someone who over saw TARP and was responsible for its design and proposed its size in an effort to help the economy presumably after trying to “understand the forces that drive the economy”. Someone who has a bachelor’s & master’s in mechanical engineering and an MBA (but I’m sure Wharton MBA has tons of courses in time-series econometrics, macro theory, monetary policy, etc… to fit in between finance courses, marketing, management, accounting, etc… amirite, Menzie??? :)) Who is this man? The non-economist Neel Kashkari.
Good job, RTD. I tried to elicit a reasonable response in my opening comment, but was ignored.
Here is a list of individuals Menzie clearly considered to be economists who blog:
https://econbrowser.com/archives/2013/09/why_do_economis
Now, let’s take a look at some of their educational backgrounds:
Jared Bernstein – BFA from the Manhattan School of Music; a Masters Degree in Social Work; Master’s in Philosophy and Ph.D. in Social Welfare.
Keith Hennessey – BAS math & polysci, MPP
Brad Setser – BA history, PhD in international relations
Stan Collender – BA Politics & Psychology and MPP Public
You just make things too easy, Menzie (other than elucidating your opinions on exactly “what constitutes an economist”). Enjoy your Sunday.
rtd: MPP has words “public policy” in it; I don’t agree with barely anything Hennessey writes, but MPP from Kennedy (where I worked at for a couple years) definitely counts as econ. Brad’s specialization (I’ll let him correct if I’m wrong, but that’s what I recall from our conversations) was IPE, short for International Political Economy. Still even without that, the advanced degree in economics at Sciences Po …in economics… should be a giveaway.
Anyway, keep on posting. You are providing plenty of material to include in my year-in-review – maybe you can be in it two years running. You certainly deserve it.
Enjoy your Sunday too!
It’s extremely tough to play tennis when your opponent is allowed to move the net after you serve but at least we have videotape of you moving the net.
To summarize:
Menzie’s “criterion is that someone has to have at least majored in economics, or received a post-graduate degree in economics, finance, political economy, to be an economist.”
then he realizes a slip-up and provides an addenda where he will now:
“allow operations research”
after an awful analogy, we have this addendum:
“Trying to understand those forces using models that incorporate prices, quantities, information sets, etc., would make one an economist”
then he really begins to realize his readers are easily nailing down his post as sloppy, short-sighted, and partisan and peddles backwards mightily:
“Point I was trying to make was being a financier (the practical aspect or real world aspect of economics) doesn’t make one somebody who tries to understand the forces that drive the economy.”
still getting called out for his b.s. additional tweaks to the criterion:
“it’s reasonable that anybody who claims to be an economist needs to have some training in the field, which is approximated by having at least an undergraduate degree (minor if you want) in economics or related field (op research counts, as does political economy)”
With his mind in swirl realizing yet another post is an absolute wreck to Dr. Hamilton’s fine contributions on this blog:
“MPP has words “public policy” in it”
(this despite only qualifying “political economy” and not “public policy”)
I seem to remember you getting your panties all bent out of shape when others try to clear up their words and yet you’re the knocking the ball out of the park backtracking with qualifiers and supplements.
So are neither Elinor Ostrom, Neel Kashkari, nor Jared Bernstein economists? I don’t know what the heck constitutes an economist in your eyes. Or is Jerome Powell now an economist as he surly tries “to understand those forces using models that incorporate prices, quantities, information sets, etc.,”
So, the post isn’t about “What Constitutes “an Economist”” it was about Menzie trying to be cute and failing while being uber-partisan… again.
“year-in-review”?!?!?! hahaha, why do you think i’ve ignored your posts for so long and only commented recently? It’s because I know recency bias is only one of the many biases you succumb to. I can only hope to be fawned-over in another year-end Menzie Chinn ego-booster. If you make it really pretty, I’ll print one and sign it for you to hang in your office. Rest assured it’ll be COD.
signed:
Your Favorite Economist (per your own criteria, or at least i think… have you changed it yet again??? Darn.),
~rtd
If you ever endured the incessant nonsense penned by Luskin – you would realize that he is not economist, Or certainly not a very good one.
What do you call the person with the lowest gpa graduating from medical school? Now substitute economics for medical. Menzie is correct in his observations about Ph.Ds in economics. Economics, like medicine, has the elements of both science and math, and art. Some actions tend to have certain results, but not always. That’s because the economy is not A+B=C. The billions of daily interactions and transactions can be generalized, but the complexity can also effectively hide factors that take us to the “yes, but” realm.
Will lowering taxes result in higher government debt? Probably in the short term. It’s hard to imagine an immediate economic growth so large that it generates more taxes despite lower tax rates… especially from an economy that is gathering steam. But a lot of things happen that we don’t expect from policy or leadership changes. If we focus on one specific action without being able to fully integrate that into the myriad of changes in government and business related to other actions, we will probably be surprised.
If, for example, we get three consecutive quarters of U.S. GDP growth, will we attribute that to Obama, the Fed, Trump, or just dumb luck? It hasn’t happened for awhile. https://si.wsj.net/public/resources/images/OG-AX524_GDP3QP_TAB_20171025132914.png
Bruce Hall It’s possible that we might get three consecutive quarters of GDP growth as a result of the Trump tax cuts. That could happen. But the analogy here would be with Brexit. The immediate effect of Brexit was to see a jump in GDP; however, that was because people maintained and accelerated spending out of savings. Over the longer run there’s no question that Brexit will hurt growth…and it’s already showing up in the form of lower productivity. I think something very similar is likely to happen with the Trump tax cuts. Over the short run spending could spike as households increase spending and businesses take advantage of a one time full investment tax credit. But all of this will be done by pulling forward planned spending. There’s not much in the Trump tax plan that will increase labor productivity. Trump will deserve a lot of credit and earned the right to tell us “I told you so!” if we see sustained annual hourly labor productivity growth of 2.5%. But if Trump’s tax cuts give us increased spending while leaving hourly labor productivity growth in the 1% range, then the tax cuts will leave us much worse off. A lot of Trump’s tax cuts might have made sense ten years ago when the economy was on the cusp of a recession. In the current economic climate most of his tax cuts make absolutely no sense whatsoever. And here I’m with Dani Rodrik; being a competent economist means knowing which model to use and when. By that definition very few of the 137 economists who signed the letter would make the grade.
Bruce asks: “If, for example, we get three consecutive quarters of U.S. GDP growth, will we attribute that to Obama, the Fed, Trump, or just dumb luck?” The answer depends on to which party you belong. I still have yet to see admission from the Dems that Bush was near a balanced budget, before the cycle tanked.
CoRev I still have yet to see admission from the Dems that Bush was near a balanced budget, before the cycle tanked.
Bush did come reasonably close to balancing the unified budget in 2007 when the deficit was 1.1% of GDP. But scratch a little deeper. The part of the budget that Bush controlled (i.e., the “on budget” part) was not particularly close to being balanced at 2.4% of GDP. The only reason the unified budget was close to being balanced was because of the large Social Security Trust Fund surplus of 1.3% of GDP. Bush took an on-budget surplus of 0.9% of GDP and managed to piss it away in tax cuts for the rich leaving us with a 2.4% deficit at the peak of the business cycle. That’s a 3.3 percentage point movement. Is that your idea of a job well done? When Obama took over in 2009 the on-budget deficit was 10.8% of GDP. When he left it was down to 3.4% of GDP. Which task was harder? Going from a 0.9% surplus to a 2.4% deficit or going from a 10.8% deficit to a 3.4% deficit?
Up jumps “Deep State” 2slugs to confirm my contention. He then contends: “…because of the large Social Security Trust Fund surplus of 1.3% of GDP. Bush took an on-budget surplus of 0.9% of GDP…” which is directly correlated with growth in employment and wages, as influenced with Bush policies.
The newest example is the recent economic growth due primarily in confidence in Trump economic/business policies compared with Obama’s. As this Trump growth becomes more obvious the same deniers will continue picking at straws, comparing the “unified” versus “on budget” numbers. The annual deficit is made up of both. It is the Dem’s utopian (more Govmunt) dreams that keeps the off budget portion rising.
CoRev I’m sorry if you don’t understand the basics of public finance, but the unified budget is made up of two components: the on-budget and off-budget parts. The President’s primary responsibility is with the on-budget side. The off-budget is pretty much on automatic pilot unless Congress makes changes to the FICA tax. Eventually the off-budget will be in a long run deficit as SS Trust Fund bonds are redeemed out of the general revenue side. Put another way, Bush’s on-budget deficits were largely financed through borrowing monies from the off-budget accounts. As a matter of economics there is no difference between on-budget deficits financed by borrowing from the general public and on-budget deficits financed by borrowing from the off-budget surplus. It has exactly the same effect on national saving.
It is the Dem’s utopian (more Govmunt) dreams that keeps the off budget portion rising.
Actually, it’s because Reagan argued for a FICA tax increase in the early 1980s. Obama cut the FICA tax temporarily, which sent the off-budget side into a deficit. You’ve got your facts completely reversed.
As to complaining about “more Govmunt”, weren’t you the one whining the loudest about Obama’s supposed (but not actual) $700B cut in Medicare? No one complained louder than you.
2slugs, we’ve had this on-budget/off-budget/deficits discussion already. I noticed you again went for the on/off budget obfuscation argument by changing terms from “annual deficit” to “national savings”. Annual deficits/surpluses are simple matters, the difference between revenue received versus expenditures.
All other categories are just accounting bins for tracking purposes. It’s only those trying to obfuscate, that throw around the binning terms without the Treasury/budget functions they support.
BTW, since you apparently consider yourself a federal financial expert, what provisions are there to NOT spend those special ff-budget derived special Trust Fund bonds in times of deficits? Did Bush have an option?
Certainly FOMC members are making economic policy, but that alone does nor make them economists. Historically bankers dominated that body, with a wise range academic training. Menzie is right that it is relatively recently that academically trained economists have become important on the FOMC.
Powell is a lawyer by training. He does have banking experience, so in that regard he is a bit of a throwback to an earlier era.
meant to say “…with a wide range of academic training…”
You have to define the noun “economist”. If your definition of an economist is someone formally trained in economics, then you are leaving out people such as Al Roth, Elinor Ostrom, and Gordon Tullock among others particularly in the private sector. Menzie is a partisan hack of a blogger whose criteria of an “economist” has changed b/c he can’t backpedal fast enough. He posts hastily b/c his liberal heart gets hurt.
OK Ostrom never took trigonometry but then how often do economists use trigonometry? I never formally took a course in finance but I learned by reading some of the best texts out there. Tullock became a good economist but reading and working with other economists.
At times when I read Luskin – I have to wonder if he even passed 3rd grade arithmetic. His own writings are proof enough that Luskin is no Tullock.
If someone tells me that he or she is an economist, I would understand that person to be saying that he or she has both an academic background in econ and makes his or her living as a professional economist, either in the private sector or government or academia. There are also lesser degrees of being an economist. For example, Jared Bernstein does not have a deep academic background in economics; however, he does have academic credentials in the social sciences and he did engage in things that professional economists do. He also has the instincts of an economist. So he strikes me as a special case. He certainly follows and understands the current macro literature. In general bankers and finance types are not economists. Just because both bankers and economists study monetary phenomena does not mean that they are interchangeable. A banker can no more be an economist than an economist can be a banker. A FOREX trader is not an economist anymore than a car dealer is a mechanic. The editors of the WSJ are not economists just because they like to blather about tax cuts and have a “pro business” attitude. And business major types know a lot about making profits, but almost nothing about macroeconomics. Mitt Romney is a good example. Donald Trump is an even better example.
Some schools position the econ department in the college of liberal arts and position the finance department in the college of business administration.
2slugs,
Would you consider yourself an economist by your own definition?
Rick Stryker Would you consider yourself an economist by your own definition?
No. I’ve never claimed to be an economist.
“Jared Bernstein does not have a deep academic background in economics; however, he does have academic credentials in the social sciences and he did engage in things that professional economists do. He also has the instincts of an economist. So he strikes me as a special case. ”
Well put. Jared does have the capacity to both read and think. Luskin does not.
Reading the comments brought to mind the old story of the blind savants describing an elephant.
Step back for a minute. Why do we tolerate Congress rushing through these complex high impact bills without giving the public time to review the details and contact their supposed representatives. It’s a bit better than Putin’s Russia but not much. I don’t see many Democrats objecting to the process, only to the terrible outcome. The Estonian solution could be to require all such bills to be published in full final version 5 days before any vote can be taken. That assumes that we all agree what words mean.
Trump can say “I have no plan to pardon General Flynn, yet” like any bully but our system keeps him and his belligerent bullying tweets in power. Now his administration has forbidden CDC scientists or whatever you call them from using words like fetus, vulnerable, transgender, science and evidence based in budget documents. What kind of a political system do we have? Words fail me…
Remember when Trump sycophant Rick Stryker screamed “FAKE NEWS” when people ridiculed Trump’s claims of 4% GDP growth?
Today in a speech Trump said “I think we could go to 4, 5 or even 6 percent, ultimately,” the president said. “We are back. We are really going to start to rock.”
I only say #Fakenews when the news is fake, which it often is. If they quote Trump accurately as they did in this case, I have no problem with it. Maybe Trump has been following this report.
6 percent? Did Trump put Gerald Friedman on the CEA?
Steven Kopits
3% deficit at the top of the cycle. We should have a surplus of at least 2%, given how much we borrowed during the Obama years.
You’re confusing the cyclical deficit and the structural deficit. Your original post said that the structural deficit was getting worse under Obama. Throughout the Obama years the structural deficit was shrinking. Look at how government spending as a percent of GDP shrank throughout the Obama years. The structural deficit would have shrunk faster if the GOP had gone along with the higher income taxes that Obama wanted.
And it gets worse. The Democrats left a big hole in the budget.
The Democrats have not controlled Congress since 2010. I’m pretty sure that Democrats would have raised taxes if they had controlled Congress during the Obama years.
And the Republicans are now trying to make it bigger.
That’s what will happen, but based on what I hear coming from the mounts of Republican congress critters I suspect that they actually believe their own BS stories about supply side tax cuts paying for themselves and incredible forecasts of economic growth. We can all argue about who is and who is not an economist, but one thing we should all agree on is that no Republican politician can be called an economist. Dumb as a bag of hammers.
The underlying fiscal situation of the US is abysmal. If it weren’t, I’d be more accommodating of tax cuts.
The best measure of an economist is how well he can predict the future, not where they went to school or what they studied.