A simple theory of recent American intellectual history

by on September 16, 2013 at 7:18 am in Economics, History | Permalink

Throughout the 1970s and most of the 1980s, the so-called “right wing” was right about virtually everything on the economic front.  Most of all communism, but also inflation, taxes, (most of) deregulation, labor unions, and much more, noting that a big chunk of the right wing blew it on race and some other social issues.  The Friedmanite wing of the right nailed it on floating exchange rates.

Arguably the “rightness of the right” peaks around 1989, with the collapse of communism.  After that, the right wing starts to lose its way.

Up through that time, market-oriented economists have more interesting research, more innovative journals, and much else to their credit, culminating in the persona and career of Milton Friedman.

I’ve never heard tales of Paul Samuelson’s MIT colleagues mocking him for his pronouncements on Soviet economic growth.  I suspect they didn’t.

Starting in the early 1990s, the left wing is better equipped, more scholarly, and also more fun to read.  (What exactly turned them around?)  In the 1990s, the Quarterly Journal of Economics is suddenly more interesting and ultimately more influential than the Journal of Political Economy, even though the latter retained a higher academic ranking.  The right loses track of what its issues ought to be.  There is no real heir to the legacy of Milton Friedman.

The relative rise of the Left peaks in 2009, with the passage of Obamacare and the stimulus.  From that point on, the left wing, for better or worse, is a fundamentally conservative force in the intellectual arena.  It becomes reactive and loses some of its previous creativity.

Over those years, right wing thought, on the whole, became worse and more predictable and also less interesting.  But excess predictability now has infected the left wing also.  Attacking stupid ideas put forward by Republicans, whether or not you think that is desirable or necessary, has become their lazy man’s way forward and it is sapping their faculties.

Yet I am not pessimistic about discourse.  Our time is a wonderful era for independent thinkers, and many of them are bloggers, too.  It’s as if we have created a new political spectrum in a very small sliver of the world, a perhaps inconsequential eddy in a much larger and often unpleasant vortex.

dearieme September 16, 2013 at 7:36 am

The Rev Tyler Cowen has pronounced. A fine sermon, that.

William Sjostrom September 16, 2013 at 7:59 am

If you say so, but I note that although you mention a whole bunch of stuff the right was correct about, you don’t give any examples of what the left was correct about through the twenty years or so you claim the left was intellectually dominant.

Rahul September 16, 2013 at 8:47 am

I think whatever viewpoint challenges the dominant policy viewpoint or status quo of an era tends to be the more interesting one.

david September 16, 2013 at 9:23 am

In macro: the right had triumphed through using Friedman’s consumption function and the formalization of rational expectations to build up real business cycle theory. Against the simple models of the old left, where all the interesting dynamics were suppressed into stylized facts, this was devastatingly effective. The 1990s marked a period where the left were busy constructing elaborate models of their older intuitions. You get maturity in, e.g., labour market matching models (Mortensen&Pissarides dates to 1994), state financial crisis models (2nd gen are late 1980s, 3rd gen are all mid-1990s), stabilization in the DSGE approach (1. construct RBC model. 2. add imperfections justified by micro 3. log-linearize around equilibrium 4. calibrate).

In short the left proved able to match the empirical standards of the 1970s right – that is, they could come up with their own complicated models that met many stylized facts at the same time. The right had said: look, individually rational behaviour is consistent with the observed cycle, no need to posit foreseeable aggregate failures that would justify intervention. So the new left said: look, our foreseeable aggregate failures are consistent with individually rational behaviour, whereas RBC has gone nowhere.

I would not date the stalling of this strategy to 2009; I would date it to the 2007 GFC. The core RBC+ approach is quite bad at handling analyses of banking crisis. It can be done but it is not tractable or persuasive. The grandiose assumptions on the roles of expectations and equilibration are stretched to breaking point.

In other areas, there’s also been an amazing amount of progress, in competition theory/IO, environmental econ, etc. These are largely applied work – new ways of detecting monopolistic behavior, or quantifying environmental gains/losses, studying the effects of interventions, etc. Implicitly these have enabled a larger role for the state. It is easier for states and other large bureaucracies to say: look, here are experts that have measured you and found that you are a monopolist/are damaging the environment to the tune of ~$largenumber or whatever. So here too the right has been steadily retreating. It won the war with the left on whether to have a market system or planned economy, then it began losing the war over how to regulate it, again because the left simply appropriated the models and began modifying them. One can only hide under Hayekian appeals-to-ignorance for so long.

Frederic Mari September 18, 2013 at 6:36 am

My own personal take: http://theredbanker.blogspot.com/2013/09/recent-history-of-economic-thought.html

But I do have a more general query in reply to your last paragraph. So we’re doing a lot of interesting applied work. Great! But, in Macro, apart from Market Monetarism, I don’t see very much either new ideas or even true challenges.

Basically, beating back bad ideas might seem to dominate because a lot of the stuff (left-leaning) Macro recommends might be economically sound but politically difficult…

Rich Berger September 16, 2013 at 12:21 pm

I’m still not seeing any specific examples of what the left supposedly got right.

TMC September 16, 2013 at 12:47 pm

Big difference between correct and dominant.

David September 16, 2013 at 12:30 pm

+1

Andrew' September 16, 2013 at 8:15 am

One way to counter tenure would be to figure out how to allow open entry to publication as much as possible. Perhaps a journal of far-fetched ideas. As Louis CK said, of course not…but maybe…

Mark Thorson September 16, 2013 at 9:16 am

There is a journal like that in medicine. It’s called Medical Hypotheses, and despite it’s prestigious publisher it’s widely considered to be a junk journal. For good reason.

mofo. September 16, 2013 at 10:02 am

My understanding of Medical Hypotheses, and i am not a medical professional, was that it was a place specifically for non-peer reviewed work and was treated as such.

In so far as its considered a ‘junk journal’ i think that came from a hullabaloo about an article on aids/HIV that tried to deny the connection between HIV and aids. Not to get into too much detail, but i dont think that episode was a high point for science, to say the least.

As i understand it now, Medical Hypotheses is now a typical peer reviewed journal.

Andrew' September 16, 2013 at 10:20 am

Yeah, that’s exactly what I’m NOT talking about.

wrparks September 17, 2013 at 7:54 am

A graduate student in our lab once jokingly discussed creating a “journal of Nature rejects”. All you had to do was fail the Nature peer review process and you are guaranteed a spot in our online only journal. Plus all applicable publication fees of course!

Rahul September 16, 2013 at 10:24 am

“a journal of far-fetched ideas”

Isn’t that called arxiv?

(Not all of it but parts. I’ve seen really wacky / crackpotish theories posted on arxiv. Especially in Physics)

Dan September 16, 2013 at 8:50 am

I worry that the elevation of classical liberal economics in the 1970s and 80s was a fluke. The Republican party needed a theory to push back against the Democratic party’s “Great Society” socialism and they found it in Milton Friedman as the message and Ronald Reagan as the messenger. But the Republican party only believed in free markets inasmuch as the program earned them political power. When it became politically expedient to embrace cronyism they did so without skipping a beat.

Of course the Republicans could not admit this so they have spent the last dozen years promoting markets in a cargo-cult science sort of way. Thus we had the GOP promoting the individual mandate for health insurance. As if coercing activity in a market was an equal substitute to actual free markets!

The sad reality is that promoting individual liberty is not a priority for either major party. Both want loyal constituents and you can’t have that if people are left free to choose for themselves.

Z September 16, 2013 at 9:34 am

Political parties are just the faces of the ruling consensus. It is why allegedly polar opposites like the Liberals and Tories can form a coalition government. A great example is Greece where the two main parties have essentially merged, despite claiming to be polar opposites ideologically. In America, the Democrats are the Liberal Party and the Republicans are the everyone else plus a bunch of liberals from non-liberal states. About a third of the GOP representatives would prefer to be in the other party, but practical politics prevents it.

Ad Nauseum September 16, 2013 at 11:48 am

They promoted a form of an individual mandate for healthcare as an alternative to Hillarycare. In the end, neither policy was pursued (till the rise of the left), which signals that the consensus at that time, was more for free markets, but the republican’s had an alternative just in case (even if they didn’t like it).

The mistakes they’ve made recently are 1.) allowing the democrats to control the conversation and bring up their previous support for mandates. Although it was meant as an alternative rather than a goal. They have successfully made the republicans look bad. 2.) The republican’s have failed to introduce an alternative to Obamacare that was as ambitious as their alternative to Hillarycare.

PseudoRegister September 17, 2013 at 10:06 am

Except in Massachusetts.

Ad Nauseum September 16, 2013 at 11:59 am

“Thus we had the GOP promoting the individual mandate for health insurance. As if coercing activity in a market was an equal substitute to actual free markets!”

The GOP promoted a form of individual mandate as an alternative to Hillarycare. They did not continue to pursue the policy after Hillarycare was stonewalled. It’s possible that they did not like the mandate themselves, but saw it as “better than the alternative”.

Their opposition to a mandate in the recent era has turned against them because 1.) they let the democrats control the narrative, and 2.) they failed to provide an alternative as ambitious as the one they had for Hillarycare.

Max September 16, 2013 at 8:50 am

“Don’t argue with an idiot. They will drag you down to their level and beat you with experience.”

Still, a tough temptation to avoid, worse if said idiots are in a position to do real damage.

John Thacker September 16, 2013 at 9:09 am

This would be the common theory that movements (political and otherwise) become exhausted immediately after achieving some large portion of their goals. The problem is that political movements are coalitions that disagree about many things internally but can agree on some goals. When the goals on which they agree are accomplished, the coalition has difficulty agreeing on their next goal, resulting in perhaps intellectual arguments in some areas but little substantive political achievements or motivation. In some cases, a shift in coalition makeup is necessary for politics to restart.

Andrew' September 16, 2013 at 9:22 am

Hopefully a black president making an ass of himself over a mis-characterized black crime drama means we’ve finally jumped the shark on race status games. We probably have a ways to go on gays since all we can muster is to give them the marriage penalty good and hard.

charlie September 16, 2013 at 9:16 am

How exactly is passing a bill that Heritage came up with — mandated medical insurance — exactly the triumph of the “left wing”?

Z September 16, 2013 at 9:25 am

This is a classic example of the hive mind at work. Heritage is one of the liberal cults chief bogeymen. Therefore anything they dream up must be “right wing.” They could come out in favor of communism and suddenly communism would be a “extreme right wing” philosophy. In reality, Heritage was searching for alternatives to state run health care and stumbled down the same blind alley of social engineering they commonly ridicule. The hive mind, however, cannot grasp that. Everything is either inside the walls or outside the walls.

Andrew' September 16, 2013 at 10:29 am

http://www.youtube.com/watch?v=L9VMY8X9rU8

It’s not actually that hard. The state mandates free care. Who should eat the cost? Well, maybe you can either not mandate free care, or you could somehow make the people who use the care pay for it. Preferably, you do it in ways that do not distort the market. That’s not however statists’ strong suit, so Heritage just took the mandate for care as a given since the statists would never budge on that and the people next in line are the people actually using the care. That doesn’t have anything to do with that being a great idea.

Z September 16, 2013 at 11:44 am

Post-reality societies endeavor to push away the tough decisions that the human condition has always required. There’s a belief that the inequities of life can be suspended if we arrange things in just the right way. When it cannot be done, we find way to pretend. Telling grandma you cannot or will not afford her treatments is tough and unpleasant. Having a faceless bureaucracy do it allows the family to pretend they wanted to do it, but were prevented from it by forces beyond their control. Similarly, telling poor people they cannot get the same level of care as the rich is mean so we make them stand in long lines instead.

All goods and services are rationed. The question is who does the rationing.

Andrew' September 16, 2013 at 3:50 pm

Nope.

Baltimore Dan September 17, 2013 at 1:46 pm

It is an oxymoron to have the state mandate suppliers provide free health care and then turn around and mandate individuals must pay for health insurance to pay for the free care they might receive. If an individual cannot afford X why does the state assume they can afford Y? Once the state begins subsidizing insurance what is the point of insurance? Why not simply directly subsidize medical care?

I understand why politicians and lobbyists use the misdirection of “insurance” but I do not understand why it is so hard for otherwise intelligent people to perceive the lie.

Andrew' September 16, 2013 at 10:24 am

Or you could use your brain and realize they are different motivations. Or you could take the word of the guy who did it who says they are different motivations as well as results and also disavows it to the extent they are the same.

Or you could just say “Nahhhhh, you’re Indians!”

CD September 16, 2013 at 8:45 pm

What’s weird today is that obvious technocratic stuff — basic macroeconomics, some kind of national health insurance (which almost all wealthy nations have), teaching biology in the schools — are now apparently “left.” Obviously these terms are slippery in the extreme, but you can argue that the U.S. right, and certainly the Republican Party, has simply abandoned the sensible center.

I agree re “a fundamentally conservative force in the intellectual arena. It becomes reactive and loses some of its previous creativity.” but it’s hard to be creative when you’re reduced to arguing *for* arithmetic.

Art Deco September 16, 2013 at 10:35 pm

You need to get out more.

mike September 17, 2013 at 12:12 am

lol @ “teaching biology in the schools” – sure sign of someone whose info about Republicans comes from MSNBC

Extinct Species September 17, 2013 at 3:46 am

. . . or Fox News.

freethinker September 16, 2013 at 9:18 am

William Sjostrom, I don’t think Tyler says the left was “right” about anything. He says the left-leaning economists are now better-equipped , more scholarly, more influential, and more fun to read. It does not mean they are right: one can be scholarly but mistaken. For example, Schumpeter’s History of Economic Analysis is hard to beat on scholarship but it is not a reliable guide to the history of economic thought. And one can be well-equipped and influential but mistaken, like the Marxist economists in my country, India : impeccably educated, several of them in in world-class universities, they are thorough with abstract theory and data analysis techniques, and they were very influential … and dead wrong.

Andrew' September 16, 2013 at 11:38 am

The question is why people think percolating to the top of the academic filter means anything other than you percolated to the top of the academic filter.

I’ve so never thought anything other than that that I’m always surprised by people think it is everything but that.

ChrisA September 16, 2013 at 9:26 am

Was Milton Friedman a conservative? Seems more a liberatian.

Rahul September 16, 2013 at 10:33 am

Who’s a true conservative economist? Borjas?

tt September 16, 2013 at 12:08 pm

librarian?

Turkey Vulture September 16, 2013 at 2:03 pm

Liberacean?

Andrew' September 16, 2013 at 3:52 pm

Loob yer terrier in?

Urstoff September 16, 2013 at 9:39 am

“Attacking stupid ideas put forward by Republicans, whether or not you think that is desirable or necessary, has become their lazy man’s way forward and it is sapping their faculties.”

So incredibly true.

john personna September 16, 2013 at 8:21 pm

I’m sure the man cleaning the stables could find better work, but then the stables would fill with …

Jardinero1 September 16, 2013 at 9:44 am

The re-birth of Austrian economics starting about 1989 – is omitted by Professor Cowen.

Todd September 16, 2013 at 9:45 am

Is this what intellectual history looks like? Compare this to some late evening FoxNews or MSNBC segment.

mofo. September 16, 2013 at 10:06 am

^this^ Hammering ideas into ‘right wing’ ‘left wing’ is a fools game.

Andrew' September 16, 2013 at 3:55 pm

“Compare this to some late evening FoxNews or MSNBC segment”

Fewer hot blondes.

Careless September 17, 2013 at 10:19 am

That’s how you know it’s a good blog

zbicyclist September 16, 2013 at 9:54 am

The various issues around the Middle East act as a distraction and sap our strength (financial and intellectual). Consider all the events since the founding of OPEC: oil prices, many failed initiatives to achieve “energy independence”, Israel, Palestine, Libya, two wars in Iraq, war in Afghanistan, muddle in Syria, our “ally” Pakistan, terrorist groups, the muddle in Egypt, (etc.)

A set of seemingly insoluble problems like these saps the national strength, perhaps in the same way that problems with a wayward teenager saps the strength of a household.

Not saying this is the whole story.

Noah Smith September 16, 2013 at 10:13 am

I think the broad narrative here is right, but I’d differ on a couple points:

1. The right in the 80s learned to embrace, or at least tolerate, structural budget deficits. That was a mistake, in my view. Given that spending was very hard to cut politically, the right faced the choice between shelving tax cuts and embracing structural deficits. They chose the latter. I think it was the wrong choice. Structural deficits are future taxes, so the right basically just pushed taxes into the future, they didn’t really cut them.

2. Related to point #1, the notion that cutting taxes would reduce deficits outright never panned out. Laffer was wrong about where we were on the Laffer Curve, with respect to personal (though not corporate) income taxes.

3. Concerning finance, the “left” (if you want to call it that) is still on the rise, in a relative sense, it seems to me, whereas in other areas I agree that there don’t seem to be a lot of new policy ideas.

Cheers,
Noah

Pax Dickinson September 16, 2013 at 12:57 pm

Note that your mood affiliation has nothing to do with the content of this post.

cassander September 16, 2013 at 7:43 pm

Except taxes weren’t cut. The average tax level as a percent of GDP from 1960-1980 was identical that of 1980-2000.

agorabum September 16, 2013 at 11:02 pm

Taxes were rearranged. Greater payroll taxes, lesser top marginal rates and capital gains.

ac September 16, 2013 at 10:29 am

The Left peaks in 2009? That was 4 years ago, how can one even say that?

Michael September 16, 2013 at 10:31 am

I have a slightly alternate view. The conservatives were mostly right, but were not known to be so until circa 1989, at which point they were vindicated in retrospect. Something tells me that in the 60s and 70s, the left was “better equipped, more scholarly, and also more fun to read,” while the right was denounced as boring ideologues. See also Tyler’s point about Samuelson.

The question is, what will be the moment that pronounces judgement on the latest segment? I don’t think it was the financial crisis, as both the left and the right had some hard lessons out of that one. Will it be Obamacare fallout, as Tyler suggests? The prolonging of the Great Recession into Depression part deux? The fall of the EU? China bubble?

However, I do take Tyler’s point that the left is now a fundamentally “conservative” force (in terms of US policy) as vastly underrated, although I’d date it back to circa ’65-74.

Sam September 16, 2013 at 10:45 am

[the right was correct about] but also inflation, taxes, (most of) deregulation, labor unions, and much more
What are you talking about?
Inflation was largely caused by demographics and oil embargoes and the 1970’s saw higher GDP growth then the 80’s. Deregulation failed horrible, energy and water utility deregulation result din 30% higher costs (when compared to states that didn’t deregulate) and banking deregulation caused the S&L and the current financial disasters; there isn’t 1 major example of deregulation success.
Union busting and tax changes lead to stagnate incomes for the middle class while the rich soaked up more and more money; the right told us that doing those thing would benefit all when clearly it didn’t
It seems that your list of things the right was correct about is actually a bunch of things it was wrong about.

tt September 16, 2013 at 12:10 pm

this. and anyway Reagan raised taxes… by a lot.

Floccina September 16, 2013 at 9:55 pm

Airlines

boba September 16, 2013 at 10:14 pm

Couple of things…
I wish professor Cowen would inform us which Congress and President enacted the deregulation of railroads and trucking industry. Oh yeah, that arch conservative Jimmy Carter. I will agree that they were started during that ultra-liberal Nixon (along with his communist EPA Clean Water and Air acts, as well as creation of the NCI) however, JC signed those laws, and as a result Reagan was served yet another helping of luck in his presidency.

Marian Kechlibar September 17, 2013 at 4:12 am

I can’t square the favorite “stagnant middle class wages” with the fact that middle class homes are significantly larger than they used to be 30 years ago and full of absolutely unnecessary electronic stuff.

8 September 16, 2013 at 10:58 am

The people who used to think up good ideas for the right-wing are drifting in the reactionary camp. I have not read any new ideas from conservatives. Even the libertarians are stale, except for the ones talking about things like secession. Which itself is quite reactionary in 2013. So the left and right are stale and have no new ideas, and the people with new ideas are figuring out how to remove all those liberals and conservatives from power.

Bill Reeves September 16, 2013 at 11:59 am

My family can’t eat what is new and interesting. Marxism was new and interesting in 1880 and any nation that implemented it did great damage to itself and often its neighbors. Are you really arguing that Obamacare and Dodd-Frank are based upon clever leftist economic research as opposed to traditional interest group rent seeking? If so, please point out the ‘Scholarly’ articles that these multi-thousand page log rolling festivals are based upon. What are the articles written in? Gibberish? Also, please point out the states that have gone farthest in implementing these brilliant new leftist ideas. Surely not booming right wing Texas? Perhaps cratering California? Insolvent Illinois?

New and interesting may work for food but not necessarily for nations or families.

Errorr September 16, 2013 at 12:24 pm

Marxism was pretty effective for the undeveloped countries for the first decade or so of a countries development. USSR, China, India, N. Korea. However, the criticisms of the Capatalists turned out to be correct in the long term as cronyism infiltrated the power structure and the leaders became conservative as they needed to protect their power and the status quo.

AnrewL September 16, 2013 at 1:03 pm

worked for China huh? ever heard of the great Chinese famine (1958-1961) Marxism was pretty effective alright, only costs about 40 million lives.

Turkey Vulture September 16, 2013 at 2:04 pm

Everything ever has worked, you just need to define the Goal in the proper way/

CD September 16, 2013 at 8:24 pm

Is either you or Reeves aware that Marx wrote almost nothing about how to run an economy?

Ashok Rao September 16, 2013 at 12:20 pm

This matches pretty well with public sentiment opposite to political dominance of the day. People like Reagan so that was a good era to be conservative. People like Clinton so that was a good era to be liberal. People didn’t like Bush so that’s a good era to be liberal. People don’t like Obama so that’s a good era to question liberalism (though there’s no good second party to replace this).

Also the Democrats are very hierarchical preventing the kind of freshness the party needs.

mike September 17, 2013 at 12:17 am

“Also the Democrats are very hierarchical preventing the kind of freshness the party needs.”

This from the party that grabbed a nobody from nowhere and made him the Presidential nominee because he had good optics? This kind of stuff is why you really ought to just shut up about US politics. We have enough obnoxious arrogant fresh-off-the-boat know it all Indians who actually live here.

Marian Kechlibar September 17, 2013 at 4:09 am

“We have enough obnoxious arrogant fresh-off-the-boat know it all Indians who actually live here.”

Somehow, I can’t see anyone daring to pronounce this sentence with most other ethnicities.

I think that Rao makes a good point about the fact that charisma of a politician can overshadow a lot of details in the collective memory of the people.

mike September 17, 2013 at 8:33 am

Aside from a few Europeans, I’ve never encountered anyone from any other ethnicity who fit the description.

Careless September 17, 2013 at 2:13 pm

People don’t like Obama? His entire term+ his policies have been far less popular than the man. His favorability rating is just slightly positive. That’s pretty decent these days (Bush II was just over 40% at this point)

collin September 16, 2013 at 12:25 pm

The role of religion fifty years of right/left ideology was minimal. Both sides were religious with mostly party divisions by more religious group. (Simplification: Left/Catholics, Right/Protestants) Starting 1980 the right webt the Moral Majority while the left went “Bill Clinton” (State religous but it is only a part of life). Oddly enough it the religious Christian libertarians (Rand Paul) that might have kept the US from bombing Syria.

mike September 17, 2013 at 12:22 am

“the left went “Bill Clinton” (State religous but it is only a part of life)”

Not really. The left (thanks to their complete control of the mass media) has gotten to have it both ways. Aggressively court the young nonreligious by relentlessly attacking and mocking religious people, while maintaining the needed religious because they never heard about it. I mean, has Obama even been to church once since he was elected?

mike September 17, 2013 at 12:26 am

I mean, once again this is an example of a fundamental incapacity for objectivity rational thought. The country was strongly religious across the board 50 years ago, but then the Democrats became the party of anti-Christianity… and that somehow means the Republicans went off the deep end? Yes, I guess it could seem that way if you’ve lived your whole life in the modern areligious leftist monoculture and you don’t think too hard about it.

Greg Ransom September 16, 2013 at 12:31 pm

Tyler Cowen — king of the econoblogger trolls.

Careless September 17, 2013 at 2:16 pm

Who else is in the running, anyway?

errorr September 16, 2013 at 12:40 pm

In some ways I’m more worried about how our political system is so inherently conservative. The federalism of our system bakes in a status quo bias through the proliferation of veto points. This radicalizes those with new and interesting ideas by pushing them out of the 2 party dominated system. It has become harder and harder to achieve change because we no longer have the civil rights issues to create the necessary cleavage within the parties to create possible 3rd way solutions by playing orthogonal issues off one another.

As the parties have become more monolithic the end result has been deadlock. In every other system of government with our numerous veto points it has required a third party to step in and break the deadlock. Of course that has always been the military stepping in to seize power.

I deem that unlikely in the US. The question is what will break the deadlock. Demographic change is forcing Conservatives to try and recalibrate but at the expense of the more radical conservative base which is why you see reactionary movements like the Tea Party.

I like to think of myself like Hayek and fully reject the dangers of conservatism with the inherent fear of change.

What will break the deadlock?

lxm September 16, 2013 at 12:46 pm

How can economics call itself an academic discipline if it routinely and repeatedly divides itself into ‘left’ and ‘right’ camps? This is not a sign of an academic discipline at work. Nor is the pitiful record of economists on how the economy has actually behaved.

Maybe economists should forget ‘left’ and ‘right’, recognize them for the illusions that they are and start to really understand how economies work.

It seems to me economists are at the same stage of development as flat earthers.

Roy September 16, 2013 at 2:50 pm

No the sign of a real academic discipline is that it divides into two camps and then one purges the other. So I guess you are right. Econ is not a proper Academic discipline

Art Deco September 16, 2013 at 10:54 pm

How can economics call itself an academic discipline if it routinely and repeatedly divides itself into ‘left’ and ‘right’ camps?

Because different people have different conceptions of what constitutes a social problem and thus what the priority question are. The problem you get with sociology and anthropology and social psychology and (perhaps) American history nowadays is that the range of acceptable questions is either narrow or bizarre (social-liberals v. Marxists v. racial sectaries). The work is apologetical in character.

dirk September 16, 2013 at 12:51 pm

There’s something too convenient about this analysis. I don’t know much about economic intellectual theory but it is hard to believe its popularity and innovations drive the politics of the day. Politicians may be slave to defunct economists, but this is the first time I’ve heard someone argue that the median voter is the slave of contemporary intellectuals. The intellectual Left rose during the Clinton years and peaked with Obamacare?

William September 16, 2013 at 3:55 pm

Tyler’s post confuses intellectual history with political ideological history. Intellectuals overvalue their influence, which is something I think Tyler, to his credit, has acknowledged.

Dan in Philly September 16, 2013 at 1:17 pm

The left co-opted economics when they saw how effective it was at defending conservative policies. Now most leftist arguments are couched in economic terms – ie the economic benefits of Obamacare.

When I was a kid, economics was considered to be a conservative science. As I’ve grown up, it’s been taken over by liberals. I guess this shouldn’t be a surprise. Marcus Aurelius observed that when wrestling, an opponent will use every trick, every tactic, every chance to win. Why shouldn’t he expect different from opponents in war and politics? Religion convinces people? Take over one or several religions and preach your ideas. Economics convinces? Become economic teachers and preach your ideas. I’m certain that if geology became something which changed people’s minds, we would find a huge number of liberal geologists within a generation.

Roy September 16, 2013 at 2:53 pm

Most academic geologists are liberals. Geologists in Industry, not so much.

Anyway the climate part of geoscience is totally politicized.

Dan in Philly September 16, 2013 at 3:11 pm

I totally feel like I have egg on my face – ignoring the obvious energy and climate aspects of geology while trying to make my point. Maybe I should have said if philosophers changed anyone’s minds these days, all philosophers would be liberal :) Actually, it was once true that they did change minds, and I wonder if I studied the matter I would find a similar early domination by conservatives then transformed into a liberal dominated trade.

Andrew' September 16, 2013 at 3:58 pm

Graph careers on revenue generated on one axes and real science on the other. Stay in the upper-right quadrant if possible.

mike September 17, 2013 at 12:29 am

That’s a good strategy for an individual who wants to live a good life. For a cult member who wants to devote his life to spreading the cult, it’s probably best to maximize a) free time for political advocacy and b) access to a captive audience of young people cut off from their parents. Gee, now where would that lead you?

Jos September 17, 2013 at 1:27 am

I’m not sure that it’s “been taken over by liberals” so much as that the center of mass of political movements has shifted. For example, I’d venture that “defaulting on the national debt is bad for a nation’s economy,” is a fairly supportable and apolitical economic statement. Yet today it’s rejected by the right who seem to be obsessed with threatening national calamity.

The result is that many people, like me, who care about economics today reject the right. It doesn’t make me a “liberal.”

mike September 17, 2013 at 8:48 am

Voting against raising the debt ceiling is an objectively stupid thing that only a lunatic right-winger would do. Like Barack Hussein Obama in 2006.

DCBob September 16, 2013 at 1:22 pm

I’m not terribly convinced by the list of things the right was supposedly right on. The right never had a monopoly on anti-communism: labor unions were as passionately anti-communist as anyobody. How was the right ‘right’ about taxes? We’re stuck with a legacy of short-sighted tax cuts that began with the Reagan cut in 1982. Deregulation gave us cheap airfares but it also gave us the financial crisis and much higher cable/mobile prices than other countries’. And deregulation did nothing to affect bad regulation at the local level, which is where it really matters. On unions: Germany has labor unions effectively built into their corporate structures, which generally work at least as well as ours. And I don’t remember anybody on the ‘left’ arguing that fixed exchange rates were a gift from God after 1971, do you? In the meantime, during the 1980s the right resisted any reform of the health care system, massively overbuilt our defense institutions, and tried to roll back much-needed environmental reforms. Shoot, we can’t even adopt the metric system without some hammerhead yammering about tradition. And let’s face it: the Southern strategy was and remains a national disaster of historical proportions. Attacking stupid ideas put forward by the right isn’t the “lazy man’s way forward;” it’s the only way to keep them from blowing another gaping hole in an already leaky, archaic vessel that is continually listing further and further to starboard. None of this is to say that the American left is all that great either, but even in its heyday of the 1980s the right wing’s record seems remarkably poor to me,

cassander September 16, 2013 at 7:50 pm

anti-communist unions? To quote walter Reuther “”the atmosphere of freedom and security, shop meetings with their[The USSR’s] proletarian industrial democracy; all these things make an inspiring contrast to what we know as Ford wage slaves in Detroit” This was said in the early 30s, at the height of the holodomor. And while he eventually rejected the USSR, he never abandoned his socialism.

DCBob September 17, 2013 at 10:39 am

This post was about the 1970s and 1980s, not the 1930s. Even Reagan was a union guy in the 30s. And socialism isn’t communism. It’s a useful disinction to keep in mind.

Art Deco September 16, 2013 at 10:44 pm

and tried to roll back much-needed environmental reforms.

IIRC, prior to 1989, all environmental lobbies found unacceptable pollution excises and tradeable permits; command-and-control regulation was the only acceptable policy tool (and every square inch of commercial timberland managed by the Forest Service had to remain public property). The Environmental Defense Fund was the first to break ranks.

DCBob September 17, 2013 at 10:42 am

True. Enviros took quite a while – well into the 90s for most groups – to cotton to excises and permits. It was a triumph of liberal economics to convince them. In contrast, the right wing has continued to fight tooth and nail even against environmental regulations using those tools. They can’t even get it together to accept the glaringly obvious evidence for climate change.

Art Deco September 17, 2013 at 3:11 pm

Because it is not ‘glaringly obvious’ and the reality of antrhopogenic global warming does not persuade eminent climatologists. (Also, the mess at the University of East Anglia).

Marian Kechlibar September 17, 2013 at 4:01 am

German and Anglo-Saxon unions aren’t the same thing, they behave quite differently during negotiations. The connections between unions and political parties aren’t even remotely similar, and there is a lot of left-wing parties in the German political system.

Also, the American structure of unionization (the majority of unions are concentrated in the public sector) is quite unique and generates its own specific problems.

DCBob September 17, 2013 at 10:47 am

Also all true. Because the right wing in the U.S. has fought so determinedly against labor having a voice at the table, the American system has evolved into a nearly purely antagonistic process. In contrast, those awful ‘socialists’ in Germany figured out how to co-opt labor by giving workers a voice. Can you imagine the U.S. Chamber of Commerce signing on to something that sensible? Don’t hold your breath.

Brian Donohue September 16, 2013 at 2:28 pm

Obamacare, and the Great Society for that matter, round out the New Deal vision. The left spent most of the last 80 years on this. I can’t wait to hear all their new, new ideas.

brad September 16, 2013 at 2:42 pm

Where is the theory? This appears to be a simple narrative of intellectual history, but I missed the theory.

William September 16, 2013 at 3:14 pm

David Brooks thinks that the small eddy of political discourse between bloggers is going to have a major impact on the GOP.

http://www.nytimes.com/2012/11/20/opinion/brooks-the-conservative-future.html?ref=davidbrooks&_r=0

Tyler, I believe you linked to this column before, but you are mentioned in it as well.

Steven Kopits September 16, 2013 at 3:19 pm

There are three ideologies here, no two.

Babcawk September 16, 2013 at 3:43 pm

Clearly that “big chunk” of the right wing lost the debate on race, but I’d say they’ve been far from proven wrong. Since the 70s, the research has pretty well vindicated their point of view given the evidence that:
1. The outcome “gaps” are caused by differences in ability (which are largely inherited), not differences in access or opportunity, institutional discrimination or whatever else affirmative action programs try to redress (Lynn&Vanhanen; Herrnstein&Murray)
2. Diversity is not our greatest strength and people report greater satisfaction & wellbeing in homogenous, monocultural environments (Putnam, unwittingly)

Marian Kechlibar September 17, 2013 at 4:04 am

The Chinese have done some huge research on heritability of intelligence lately. They aren’t burdened by concepts of race guilt and don’t consider the subject taboo. I expect that they will produce some results that will cause a wave of head-scratching in Western scientific circles.

byomtov September 17, 2013 at 2:25 pm

None of which, even if it were true, would justify conservative racial attitudes and practices.

Spencer September 16, 2013 at 3:58 pm

Friedman thought floating exchange rates would be stable.

Given the volatility of exchange rates under the float it is hard to see how he ” nailed it”.

Dan September 16, 2013 at 4:13 pm

It’s kind of suspicious to say that we’ve recently started an intellectually stagnant period, when the previous 40 years all had at least one intellectually vibrant movement.

I expect that, 20 years from now, someone like Tyler will look back on 2009-2013 and have a narrative about how it was part of some intellectually vibrant trend, on either the left or the right. It’s just hard to grasp the storyline now, because most of it hasn’t happened yet.

Marian Kechlibar September 17, 2013 at 4:18 am

It might be said that many of the “vibrant” movements were absolutely disastrous for the nations which suffered them, like juche, Italian corporate fascism, Marxism-Leninism, Maoism, Khmer Rouge, South-African apartheid or Mobutuism (hello Zaire).

There is an uncanny valley leading from a circle of academic intellectuals constructing a theory on how a society should be ruled, and ending in a Gulag or its functional equivalents. On the way from A to B, there is a lot of applause for the “new and interesting” development.

If we’re spared more of such vibrant theories, it may save human lives. Some millions of them. I can’t imagine the bloodshed of, say, Indonesia, trying to rearrange the current complex society according to some Red (Green, Yellow) Book of Political Wisdom.

Art Deco September 17, 2013 at 3:33 pm

Recall Alan Paton’s Cry, the Beloved Country and Ah, But Your Land is Beautiful for its portrayal of social conditions in Southern Africa and the mental world of the Afrikaner intelligentsia (and remember Hendrik Voerwoerd had been a psychology professor at Stellenbosch University). The sort of social theory traded in by Paton’s Afrikaner intellectuals was a stylized discussion of social and political problems. The social problem was the wretched street crime and the political problem was one of who runs this town. Aparthied was ultimately a series of adjustments and attempted remedies, not the attempted applicaton of a utopian scheme.

Steve Sailer September 16, 2013 at 4:14 pm

Marginal returns diminish while overconfidence increases.

Bill September 16, 2013 at 4:23 pm

You got your history mixed up. Airline and trucking were deregulated under Carter. Unless you want to call Brookings right wing, there was support for dereg in both camps..f

As for the fall of the soviet union, I would argue Carter’s 1979 trade sanction, along with the later collapse of oil prices, doomed the soviet union, and not right wing rhetoric

Art Deco September 16, 2013 at 10:47 pm

A nearly autarkic command economy was ‘doomed’ by Jimmy Carter’s trade sanctions? Neat trick, rabbit hunter.

Marian Kechlibar September 17, 2013 at 4:06 am

There wasn’t anything autarkic about Soviet economy, they imported quite a lot of raw materials from Africa and quite a lot of technology from the GDR and Czechoslovakia, which were industrial powerhouses of the Eastern Bloc.

Art Deco September 17, 2013 at 3:25 pm

Somehow, I do not think Mr. Carter’s “trade sanctions” had much effect on trade within COMECON. Scarcely anyone imports that much (by value) from tropical and southern Africa and Soviet Russia had a number of client states therein.

Max September 17, 2013 at 2:04 am

I don’t think trade sanctions doomed the Soviet Union. It existed with enough states and raw materials that it should of had the ability to produce anything it needs. But it couldn’t. Remember that the Soviet Union was not only Russia but the whole eastern Europe with the DDR as their poster child for the West. The DDR was the richest looking state in the Soviet Union and by the 70s the best car they produced was a Trabant. And for that the Soviet Union ransacked its member states. I doubt that a union that has oil fields and some of the biggest steel and coal reserves would have been bothered by a trade embargo. I rather believe the micro economic theory of incentives and innovation was sorely amiss.

Andreas Baumann September 17, 2013 at 7:22 am

The DDR wasn’t part of the Soviet Union, you dolt. The CCCP was the current SNG plus the three Baltic States.

Marian Kechlibar September 17, 2013 at 7:40 am

You’re right, of course, but taken realistically, DDR was a puppet state, as was my own country of birth, Czechoslovakia. With 1 million foreign soldiers on the ground, it is hard to deviate from the Kremlin line. Certainly the Soviets could extract anything they wanted from their satellite states.

anon September 16, 2013 at 6:17 pm

The closing paragraph is sad … to the point that I hope it’s satire. Is the cornucopia of fiercely-argued (odd) opinions on blogs a sign of hope or the last gasps of defeat? Separation from others (replete with echo chambers) is rarely a source of growth potential or real-world impact. And what was your earlier point about “attacking ideas” such that it “saps their facilities” … seems to apply to online denizens of all stripes, doesn’t it? The ebb and flow of ideological ideas has a pretty long history and at least in economic activities, the “best” path forward is seldom clear (ex ante or ex post).

Pithlord September 16, 2013 at 7:18 pm

Maybe the discourse just becomes more predictable to us as we become older because we have heard it all before. Just like music.

RADICAL BLOGGER September 16, 2013 at 7:40 pm

Capital, rich investors, their corporations and their tool, the corporate media drives the “discussion.” They set the agenda, they create and disseminate the dogma, the propaganda.
What happened after the fall of the Soviets is that Capital shifted its focus to its next most important enemy, its next obstacle to more profits–the majority bloc of the USA and other western nations. Specifically, the white race and more specifically white males. Whites and especially white males are now the main enemy of Capital. They are (or perhaps “were” is the better word these days) the primary obstacle to increasing the supply of labor and thereby decreasing wages and increasing profits.

Freed from its struggle against socialism, Capital focused on its efforts to subvert western Leftism and convert western Leftism into a new form of leftism, identity-politics oriented Leftism. That effort by Capital began many decades ago, but with the fall of the Soviets, Capital diverted much more money to the effort to mold, evolve and change Leftism into a tool to cram more nonwhite labor into America, into the workplaces, primarily working towards created a form of American Leftism that idolizes and romanticizes nonwhites and in particular immigrants. Also, in a more basic sense Capital created a new form of Leftism oriented around pluralism. Pluralism, multiculturalism, black pride, the demonization of white racial identity, the intimidation of whites who dared to counter the multiculti propaganda, all these weapons of Capital were brought to bear upon the white majority.

The white majority is the enemy now. Not the Soviets.

As for a political discussion, please. Both the GOP/conservative and the Dem/Liberal political base in america is so propagandized that they have little ability to logically and objectively weigh political ideas. They are unable to change their minds or do much else besides regurgitate the propaganda Capital feeds them.

Max September 17, 2013 at 2:11 am

What the hell is capital? The richest 1 percent? The corporations? Or something as old fashioned as the jews? (seems that gets never old…)

RADICAL BLOGGER September 17, 2013 at 5:01 am

I wrote:
“Capital, rich investors, their corporations and their tool, the corporate media – ”

You wrote:
“What the hell is capital?”

Ya might wanna read that again, Champ.

wrparks September 17, 2013 at 1:51 pm

Eats, shoots and leaves?

Edward Burke September 16, 2013 at 10:11 pm

Tyler: I see you posted this thread just prior to your appearance on this morning’s “On Point” from WBUR/NPR (fine presentation of AIO themes, btw). But I invite you in the next day or so to go to the show’s “On Point” Disqus forum to see just what kind of discussion the program generated: you may be appalled or you may find your stated view above confirmed, but I think you might at least see some cause for alarm.

TallDave September 17, 2013 at 5:01 am

noting that a big chunk of the right wing blew it on race

Well, yes and no, there’s subtle distinctions here. The internationalist, cosmopolitan left was against racism (at least for whites) but explicitly racist government intervention was how the Dems held poor whites in the South for a hundred years, and how they hold poor urban minorities now. There was no similar split on the right, there were racists on the right to be sure but they mattered less to the GOP because the party’s platform was always relatively race-neutral (that is, compared to the party of Jim Crow and slavery).

Today’s watered-down leftwing racist identity politics is pro-minority and has fewer sanctioned lynchings (though Zimmerman might disagree on both counts) but does inform some odd decisions like blue states in the U.S. demanding much worse voting security than even most Third World democracies suffer.

DCBob September 17, 2013 at 10:57 am

Dave, you’re mixing things up. The southern Democrats were not ‘left-wing.’ They were as right wing as anyone in the country. It was only by making a deal with that devil that northern Democrats were able to pursue an at least moderatley progressive (but sadly segregationist) agenda in the 1930s and 1940s. And are you seriously going to argue that a party that elected a president whose policies are approximately as moderate-right as Richard Nixon’s, and that garners the votes of a much wider range of voters in terms of race, ethnicity, income, and gender, is the party of ‘racists identity politics’ in America? Have you ever heard of the Southern strategy? Or Jesse Helms? Or that Saint Ronnie opened his presidential campaign with a speech in Philadelphia, Mississippi? White southern racism is the bane of our national culture and it’s still alive and kicking, and not on the so-called left wing.

Baltimore Dan September 17, 2013 at 2:17 pm

@ DCBob

When you write “White southern racism is the bane of our national culture” are you aware that Boston, Massachusetts is not in the south? The Boston Red Sox were the last major league team to sign a black player. The team was not very good in the 1950s yet fans tolerated this bigotry, even when it made the team non-competitive.

Racism was a national problem and the American people have made great progress. The inability of the Left to move on from the past and their blindness to racism in the North, while ever reminding the world of racism in the South begs an explanation.

The extent of racism in the management of the Boston Red Sox is explored in the linked Dartmouth paper. [mba.tuck.dartmouth.edu/pdf/2001-1-0088.pdf]

DCBob September 17, 2013 at 3:17 pm

True, Dan. Racism is not confined to the American South, nor to America. Nevertheless, the Red Sox and their overwhelming cultural importance notwithstanding, I’ve lived in both Boston and Birmingham, and I think the proposition that as a whole the north is as racist as the south is just dead wrong. This paper provides what I see as pretty compelling support for that:

http://www.mattblackwell.org/files/papers/slavery.pdf
The Political Legacy of American Slavery
Avidit Acharya, Matthew Blackwell, and Maya Sen
August 28, 2013
Abstract
We show that contemporary differences in political attitudes across counties in the American South trace their origins back to the influence of slavery’s prevalence more than 150 years ago. Whites who currently live in Southern counties that had high shares of slaves population in 1860 are less likely to identify as Democrat, more likely to oppose to affirmative action policies, and more likely to express racial resentment toward blacks. These results are robust to accounting for a variety of attributes, including contemporary shares of black population, urban-rural differences, and Civil War destruction, and strengthen when instrumenting for the prevalence of slavery with agricultural cotton suitability. The results suggest that political attitudes were at least in part determined by the local prevalence of slavery and the political and economic incentives that emancipation created for Southern whites. In turn, these attitudes have been passed down from one generation to the next.

Baltimore Dan September 17, 2013 at 8:39 am

Dan in Philly makes a salient point. The Left has learned that winning the Economic argument is what matters, even if one has to lie to do it.

The economic prosperity of the 1980s and 1990s was credited to Reagan and then Clinton who both oversaw significant deregulation of the financial and capital markets and who both embraced Supply Side economic theories (Never forget that it was Clinton who lowered the maximum tax rate on Capital Gains back to the 20% that Reagan achieved in his first tax reform bill)

This outcome put the political left in a corner. They were losing the political argument for Socialism and losing it badly. The opening for a comeback came in the faltering GWBush administration and victory was claimed with the passage of TARP, which put the GOP leadership in union with Liberals on socializing economic risk. The political disaster of TARP is that it not only proved the lack of principle in the Republican party leadership but it handed the Obama administration a blank check to meddle in the economy, all the while blaming the persistent weakness in the economy on the “Failed Republican Ideas of the Past”.

Granted TARP was a failed Republican idea, but that is not the critique Obama was messaging. Rather he was tearing down the central theories of the free market economy. And since Republicans had already forsaken these theories there was no one in the political space to defend them.

Frankly, all the economists at GMU are no match for the bully pulpit of the POTUS and Congressional leaders. Eventually the political class will be discredited by the failure of their ideas (ie that ObamaCare will lower health insurance premiums) and other voices will take hold. But it takes time for the cycle to play out.

Art Deco September 17, 2013 at 3:21 pm

Granted TARP was a failed Republican idea

It was? Did I miss the recapitulation of 1931 that Barry Eichengreen feared?

The Maiden Lane deals and TARP taken together were not the accounting catastrophe that Nicole Gelinas and others were expecting. The there is a modest amount ($10 bn if i recall corectly) outstanding of the preferred stock acquired under the Capital Purchase Program. The third leg of the AIG deal will lose money for the government, but a fraction of what was initially feared. The big losses appear to be from financing the deficits of Fannie Mae and Freddie Mac (a bipartisan venture in defense of a Democratic constituent), which was not part of TARP but of a different initiative of H. Paulson; and from the capital injections into General Motors and Ally Bank (a misappropriation of TARP funds which was an initiative of the Obama administration and a favor to important Democratic constituencies).

Baltimore Dan September 17, 2013 at 8:17 pm

TARP was a failure because it claimed Wall Street was TBTF and then refused to allow this hypothesis to be tested. The consequence being that the financial sector was for all intents and purposes socialized (surely you can appreciate that with the government’s backing it is possible for it to prevent any firm from “failing”) Now, 5 years into the “crisis” the experts cannot explain why the economy continues to underperform. Perhaps this is because of TARP. But good luck getting the political class to accept that it may be a good thing for corporate risk takers to lose or for dishonest brokers of bad debt to be held responsible.

Art Deco September 17, 2013 at 9:17 pm

Run down the list of the salient beneficiaries of various programs:

1. Federal National Mortgage Association
2. Federal Home Loan Mortgage Associaiton
3. American International Group
4. Citigroup
5. Bank of America
6. JP Morgan Chase
7. Wells Fargo
8. Goldman Sachs
9. Morgan Stanley
10. General Motors
11. Chrysler
12. GMAC, now Ally Bank

#1, #2, are components of K Street, not Wall Street

#10, #11, and #12 are components of Detroit, not Wall Street.

#8 and #9 were spoken of as toast, but as it happened survived and repurchased the preferred stock in short order. The thing was, Berkshire Hathaway and Nomura Securities were willing to invest in these enterprises at the point of peak crisis. Either one: they did not do due diligence, or two: they were wagering on a government injection or three: these firms were in better shape than the financial press understood.

#6, and #7 pretty much had TARP capital injections stuffed down their throats. They repurchased the preferred stock several years ago.

#5 is headquartered in North Carolina. Prior to 2008, the company policy was to concentrate on ever more extensive deposits and loans banking. Their investment banking subsidiary was by the CEO’s preference kept within a certain size and (IIRC) limited to corporate lending and securities underwriting. They required a special dispensation in January of 2009 because of something they did congruent with regulator’s agendas, something they tried to back out of but re they had the screws put to them by Paulson, Geithner, and Bernanke: the acquisition of Merrill, Lynch.

The real “Wall Street bailout” involved AIG and Citigroup.

Again, the purpose of the federal government’s actions was to contain an immediate crisis. It is difficult to see the mechanism whereby allowing a string of major bank failiures would have left the economy more vigorous.

The Anti-Gnostic September 18, 2013 at 10:11 am

I’d argue it’s essential to the recovery. Asset prices were artificially high. They needed to be written down and the assets transferred from foolish spenders to wise savers. Stupid companies doing stupid things need to go bankrupt, and the talent and capital can be put to better use elsewhere. Five years later, we’re limping along, pushing on a string, and laying the groundwork for the next crisis. I’m guessing it shows up in sovereign debt.

Art Deco September 18, 2013 at 3:46 pm

Which assets have not been written down?

Per Federal Reserve data, delinquency rates on every type of loan other than commercial and residential real estate are below the medians of the period running from 1991 to 2007. Delinquency rates on commercial real estate have been declining at an agreeable clip and may fall below the usual by 2015. Residential real estate loans on the books retain high delinquency rates, but how much of that is due to the MERS mess and procedural hurdles?

Barry September 17, 2013 at 9:04 am

“Throughout the 1970s and most of the 1980s, the so-called “right wing” was right about virtually everything on the economic front. ”

As Noah Smith pointed out, “I do think Tyler forgets about the structural deficits that the right learned to embrace in the 80s:”

Barry September 17, 2013 at 9:08 am

Tyler: “The relative rise of the Left peaks in 2009, with the passage of Obamacare and the stimulus. From that point on, the left wing, for better or worse, is a fundamentally conservative force in the intellectual arena. It becomes reactive and loses some of its previous creativity. ”

In a certain sense, this is true, because the right is now nothing but an intellectually and morally bankrupt force of reactionary nihilism. The only goal is looting.

Barry September 17, 2013 at 10:35 am

Tyler: “The relative rise of the Left peaks in 2009, with the passage of Obamacare and the stimulus. From that point on, the left wing, for better or worse, is a fundamentally conservative force in the intellectual arena. It becomes reactive and loses some of its previous creativity. ”

You’re confusing ‘politically’ and ‘intellectually’. And the left was never the heart of this, unless you think that passing the Heritage Foundation’s plan was a ‘leftist’ thing.

Keven Drum has some comments at: http://www.motherjones.com/kevin-drum/2013/09/attacking-stupid-ideas-dirty-job-someones-got-do-it

“Here’s my question: Supposing, arguendo, that stupid ideas from Republicans have been the most destructive economic force of the past four years, then isn’t attacking those ideas actually a pretty productive use of time for a left-wing economist? Sure, it would be nice to see lots of intellectual ferment coming from the left, but (a) it’s probably too soon for that given the scale of the upheavals of 2008-13, and (b) it’s hard for elegant new theories to get much of a foothold until the stupid stuff is finally and definitively put in the ash can of history.

These are both debatable points. But I think there’s been some interesting work on shadow banking, the future of automation, the role of financial intermediaries, the cyclical impact of leverage, and much more coming out of the left and center-left recently. And that’s not even counting some equally interesting work on the role of income inequality on economic growth that’s starting to emerge from the leftier precincts of the left. But this stuff is all still trying to find its legs. It’s too soon for anyone to have emerged as the Keynes or Friedman of the post-financial-crash world.

Likewise, even after five years, right-wing economists are still pushing pet theories of austerity that make no sense, along with a variety of nonsensical RBC blather and monetary medievalism. Maybe the best course for academic economists is to ignore this stuff, knowing that it’s basically doomed in short order. But you can hardly blame them for thinking that this might be a dangerous course, one that could end up in disaster for lack of pushback. I don’t know if that’s the right way to think about it, but it’s not obviously ridiculous.”

byomtov September 17, 2013 at 11:23 am

Throughout the 1970s and most of the 1980s, the so-called “right wing” was right about virtually everything on the economic front.

Really? You mean tax cuts are self-financing? Come on. That was a fundamental right-wing economic belief through that period.

Art Deco September 17, 2013 at 3:13 pm

Um, no. That was an intellectual project of Arthur Laffer, Jude Wanninski and some others. That thesis was not all that generalized among Republican economists.

byomtov September 17, 2013 at 9:08 pm

It was widely endorsed by Republican politicians who, unlike the economists, were the ones in position to act on it.

Art Deco September 18, 2013 at 3:40 pm

No, it was embraced by Ronald Reagan. Republican members of Congress did not need novel macroeconomic conceptions to persuade them to pass tax cuts. Bon bons are what Congress likes to distribute. IIRC, the opinion press were loyal soldiers, but there were elements within the Reagan administration who had no interest in or time for Arthur Laffer’s notions. Per David Stockman, about the only salient policy-maker who adopted a position completely in tune with the President was Donald T. Regan.

Michael Kinsley has been far more fixated on this element of intramural Republican discourse than just about anyone who was a participant in it other than Jude Wanninski, Robert Bartley, and a few others.

John Donnelly September 17, 2013 at 12:10 pm

I’m having a hard time understanding the comments for all the cynicism. It appears Mr. Cowen had something specific in mind about the “right” and the “left.” I’m predominantly a Libertarian and I give very little to the right intellectually regardless of the decade. I do however agree with some parts of the “Left” agenda regarding not legislating the moral codes.

Lord September 17, 2013 at 1:11 pm

This suggests the right/left came up with better ideas, discrediting those of the left/right, but while currently the right has been discredited, they are failing to address their shortcomings and come up with new ideas. That does not appear to have changed since the 90s. Is this merely a matter of time or personality before the right rises again, or are we in for extended period where the left reforms while the right stays discredited?

mark September 17, 2013 at 6:06 pm

Not generally a huge fan of overgeneralization but this was a brilliant exception. The best sentence was the one about the left becoming reactionary and doing nothing more than attacking Republicans. Dr Krugman, I presume?

The Anti-Gnostic September 18, 2013 at 10:21 am

The Right is still nominally ‘Right.’ The real sea change has been how the Left tiptoed away from the white (Anglo, Irish, Italian, Slav) working class as too religious, too armed and too provincial. They’ve also tiptoed away from environmental stewardship by moving on to ethereal concepts like ‘global warming’ and/or ‘climate change.’ After all, diversity needs places to live and throw their trash, and the welfare state won’t pay for itself so crank up the bulldozers. In the future, the backpackers, hunters, fishermen and birdwatchers who call for the protection of wilderness areas will be right-wing racists.

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