Monday, December 12, 2011

Brad DeLong: I Have Been Wrong, Wrong, Wrong....

Brad DeLong lists at his blog eleven things that he has "gotten really, really wrong so far" in his career.

I think many of his new views as implied by what he says he got wrong are wrong also, but there are 3 where I agree, at least in part, that he now sees the world more clearly.He writes:
My belief that central banks had the tools, the skill, and the political will to stabilize economies at high levels of employment and low levels of inflation...
In the above wrong, he goes on to talk nonsense about the necessity for fiscal policy to fix what he thought the Fed could fix and now realizes he was wrong about. But, it is good to see that at least he doesn't see the Fed as God, anymore.

Another wrong he lists is:



My belief that closer economic integration between Mexico and the U.S. would be, while a rough ride for Mexico, a clear net plus for Mexico.
Again, he has this partially correct. NAFTA, which is what I think he means by a "closer economic integration between Mexico and the U.S., is not helping the average Mexican or the overall Mexican economy. It was never designed to do so. It was always about special interests designing rules and regulations to stifle true competition.

Murray Rothbard spotted this in 1993:

Once again, libertarians and conservatives are being played for suckers. And once again, free-market think-tanks and alleged devotees of "free trade" are serving as point-men and front-men for a sinister centrist Establishment whose devotion to freedom and free trade is somewhat akin to Leonid Brezhnev's. The last time that "free market economists" played such a repugnant role was in the 1986 "tax reform," engineered by Jacobin egalitarian economists in the name of "fairness," "equality," and free markets. (Tip: genuine free markets have nothing to do with "equality," and nothing whatever to do with modern leftist notions of "fairness.") The "social compact" devised by the 1986 Republican Jacobins was to cut upper income tax rates in exchange for "closing the loopholes," "broadening the tax base," and thereby keeping everything "revenue neutral." (Query: what's so great about keeping tax revenues up, the eternal aim of supply siders? Why not drastically lower tax rates and tax revenues? Isn't that the real free-market position?)...

The current Pied Piper, or Judas goat, role of free-market economists is being played over the North American Free Trade Agreement (Nafta). Just call it "free trade," and free-market economists and libertarians will swallow anything...

Real free trade, of course, doesn't require years of high-level government negotiations. Real free trade doesn't require codicils and compromises and agreements. If the Bush administration had wanted real free trade, all they'd have had to do is to cut tariffs and quotas, abolish the International Trade Commission, the "anti-dumping" laws, and the rest of the panoply of monopolistic trade restrictions that injure American consumers and coddle inefficient producers.

What the Establishment wants is government-directed, government-negotiated trade, which is mercantilism not free trade. What it wants also is institutions of internationalist super-government to take decisionmaking out of American hands and into the hands of super-governments, which would rule over Americans and not be accountable to the American people. The mercantilist Establishment, emphatically including the right-centrist Bush-types, wants government-regulated trade as well as subsidized exports. Negotiated trade, whether Bush or Clinton is doing the negotiating or David Rockefeller were doing the negotiating directly, lowers import barriers only as bargaining chips to force-feed American exports into foreign countries...
The real problem is that these rotten statist measures will be enforced by supra-government commissions, commissions which have acquired super-sovereignty, over Americans, Canadians, and Mexicans, thereby injuring the consumers and the economies of all three nations.
It's good to see that DeLong is finally getting this.

Here is DeLong on his error about Japan:
My belief that the rapid growth of the Japanese economy in the 1970s and 1980s would continue into the 1990s and 2000s.
I understand that there is some new research by Austrian-sympathetic economics students at the London School of Economics, who are doing research on the 1970s and 1980s boom in Japan followed by the collapse. Their research shows that the entire boom and bust in Japan can be explained within the framework of Austrian business cycle theory.

DeLong also writes:
My belief that no advanced country government with as frayed a safety net as America would tolerate even near-double digit unemployment for years.
Tolerate? The "safety net" of unemployment insurance, minimum wage laws, coupled with the Federal Reserve money manipulations, is what is behind the high unemployment. DeLong may not realize it, but he is actually saying the "safety net failed".

3 comments:

  1. I know enough about DeLong to know I don't want to waste time or brain cells on his perverted thinking. Let me guess, we are now suppose to beleive from this point forward he has it all figured out?

    ReplyDelete
  2. " I understand that there is some new research by Austrian-sympathetic economics students at the London School of Economics, who are doing research on the 1970s and 1980s boom in Japan followed by the collapse. Their research shows that the entire boom and bust in Japan can be explained within the framework of Austrian business cycle theory. "

    I don't suppose you have a link to either that research or some info on it?

    ReplyDelete
  3. Modern "Free trade agreements" have as much to do free trade as the PATRIOT ACT has to do with patriotism. They are really "mutually assured mercantilism."

    ReplyDelete