Are you unemployed? Perhaps you should blame some of America's most celebrated economists, and their troubles with math.
Tuesday's big non-Boston news appears to be the rather significant economist punch-up now underway between "This Time It's Different" authors Carmen Reinhart and Ken Rogoff -- whose work is a foundational text among austerity's highest priests -- and University of Massachusetts Amherst economists Thomas Herndon, Michael Ash and Robert Pollin, who obtained the data spreadsheet that underpinned the conclusions of the Reinhart-Rogoff 2010 paper, "Growth In A Time Of Debt" and found it to be riven with errors. The Roosevelt Institute's Mike Konczal can claim credit for penning the most viral summary of Herndon, Ash, and Pollin's take. Reinhart and Rogoff have initially responded by suggesting that the Amherst economists do not threaten their original findings.
One the errors, by the way, appears to be a coding mistake in the spreadsheet itself, which has led to malformed calculations. As Konczal quips: "If this error turns out to be an actual mistake Reinhart-Rogoff made, well, all I can hope is that future historians note that one of the core empirical points providing the intellectual foundation for the global move to austerity in the early 2010s was based on someone accidentally not updating a row formula in Excel."
Depending how this battle royale shakes out, someone may have to surrender their calculator. In the meantime, Dean Baker of the Center for Economic and Policy Research brings the discussion back down to street-level, with a pertinent question: "How Much Unemployment Was Caused by Reinhart and Rogoff's Arithmetic Mistake?"
This is a big deal because politicians around the world have used this finding from [Reinhart and Rogoff] to justify austerity measures that have slowed growth and raised unemployment. In the United States many politicians have pointed to [Reinhart and Rogoff]'s work as justification for deficit reduction even though the economy is far below full employment by any reasonable measure. In Europe, [Reinhart and Rogoff]'s work and its derivatives have been used to justify austerity policies that have pushed the unemployment rate over 10 percent for the euro zone as a whole and above 20 percent in Greece and Spain. In other words, this is a mistake that has had enormous consequences.
Baker concludes: "If facts mattered in economic policy debates, this should be the cause for a major reassessment of the deficit reduction policies being pursued in the United States and elsewhere. It should also cause reporters to be a bit slower to accept such sweeping claims at face value."
But even that's a bit of an optimistic take. The reporters who cover "economic policy debates" from the standpoint of assessing the quality of the economics aren't the same reporters who cover "economic policy debates" from the standpoint of assessing the quality of the debate. The former group's discussion doesn't put any pressure on lawmakers and the latter group won't know enough about the argument to pressure policymakers effectively.
Do you imagine for one minute that this will be a matter widely discussed on this weekend's Sunday morning political chat shows, which "drive the discussion?" If "This Week" doesn't book Paul Krugman, to squeeze out a sentence or two about this while George Stephanopoulos nods along, it likely won't be discussed at all. (Even then, Krugman will only have the opportunity to hold other pundits accountable, not policymakers.) So there won't be any pressure placed on lawmakers to do this "re-thinking," and even if there was, most lawmakers do not proceed from "thoughts." Capitol Hill's deficit panic-mongers treat Reinhart and Rogoff like shamans, not economists.
Oh, and I forgot to mention that the media doesn't talk about the massive unemployment crisis at all anymore, anyway. So good luck with all this.
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