On economists and their records

Krugman or Mankiw?  Mankiw or Krugman?

I say Krugman.  And here’s my argument (awaiting moderation as a comment on Krugman’s NYT blog):

With all due respect, what did Greg Mankiw and Glenn Hubbard accomplish under Bush, not for them personally, but for society? What’s the economic record of the Bush administration measured in social welfare terms? Isn’t economics ultimately about optimizing the welfare of society? Shouldn’t that criterion trump citations, publications, or “academic accomplishments” as determined by fellow economists? I can list two remarkable accomplishments by Paul Krugman off the top of my head that, in welfare terms, go much longer than any increasing-returns trade or urban economics story. Krugman opposed the invasion of Iraq. And Krugman opposed the tax cuts for the rich.

UPDATED: 12/1/2008

I’m getting a few readers linked from Greg Mankiw’s blog.  For their sake, I’ll expand on my argument just a little.

Assume arguendo that the economists’ talent is a resource with a positive value.  Since their productivity is not infinite (which, in conventional economics translates as, the economists’ talent is a scarce resource), then it is incumbent upon the economists — as the public guardians of social efficiency — to see to it that their talent is allocated to its best possible use.

(This is, by the way, an idea that Robert E. Lucas made famous with his remark on why macro economists should spend more of their thinking time on growth economics and less on business cycles.)

Which was — by far — a better way to spend the scarce talent of the economists in question, say, in the last 8 years?  Was it better to spend it promoting or opposing the war, the tax cuts for the rich, the deregulation of financial markets, the dismantling of the social safety net, etc.?

According to Stiglitz and Bilmes, the war is costing us $2 trillion plus.  That’s the conservative estimate.  To the extent the deregulation of financial markets is a factor leading to the current mess, that’s to be added to a problem that is requiring an emergency public injection of $.7 trillion plus.   I don’t have handy figures for the total cost (on social welfare) of the increase in social inequality caused by the tax cuts for the rich, social insecurity, etc. but I am sure it’s not zero.

I’m not saying that Mankiw alone did all that.  He contributed to it, willingly and knowingly.

I’m not saying that Krugman alone managed to reverse all that.  But he contributed to it with his well argued opinion.

Krugman served the public interest with his critique of the way things were mismanaged by Bush.  Mankiw, on the other hand, did a big disservice to the public by throwing his academic and intellectual weight to the sad task of propping up Bush.

Conclusion: To the extent they owe anything to society (since they both for sure stand on the shoulders of giants), we got an excellent return on Krugman.  Mankiw, on the other hand, has been a toxic asset on our balance sheet.  Let’s hope that Paulson buys it — and keeps it.



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