Economics, Save Us!
The big three of social sciences—sociology, economics and political science—have had a negligible impact in the real-time American environment and their actors. Not to be critical in the least, however rock-solid the elemental science in those schools the results are invariably fuzzy, subjective and open to widely legitimate interpretation. Political research is often a very granular art applied to micro environments for predictive behavior, while evolutionary behaviorists ignoring cultural influences cause as many problems as they seek to solve.
Economists, however, always had a titanium-solid pure empirical model right in their hands that absolutely mandated proper human behavior and response in preventing a chaotic meltdown of society (the core mission of their school and profession), the economic depression. Like all truth the model runs simple and plain.
In a recession—that can easily degrade into a depression—demand is shot to hell because the main driver of the economy, consumer spending, is kaput from unemployment and fear. The only purely singular way to snap out of the ever-regressive spiral is to inject proper demand into the system, stimulative public spending. In milder recessions past monetary policy—making money cheap to lend so more would be injected as stimulus—was always the other great option, but it obviously didn’t work this time, our banking system is busted, they’re not lending with even some of the cheapest money in history lying around.
The science of economics implacably says we must now spend heavily short term on public stimulus. Brother Bob Herbert’s analogy in the New York Times this morning is incomplete, what’s happening on public state spending levels isn’t taking the foot off the accelerator to get the economy over a recession hill, it’s throwing the vehicle into reverse with the horror of a possible depression right there if the insane course isn’t stopped.
Incredibly, in a booming textbook example of groupthink, it has now become de rigueur economics of the Very Serious Policy People—even among professional economists!—that public debt is a terrible problem that must be moved on this very second, with a smashing Great Recession reeling and bleeding us the time is now to inflict more pain and regression by cutting or restricting public spending.
Economist and Nobel Peace Prize winner Paul Krugman has naturally professionally flipped out over this insanity, hammering at the truth incessantly for a week in a desperate attempt to get us to do the right thing, what we’ve known as well as the physical sciences for 80 years now, how is it possible we are making this mistake?
I’m really shaken by this, for 30 years I’ve admired economics to a very great degree, man they had that perfect empirical model to stave off disasters that keep little people off the streets and employed, talk about a noble justification for career, you know? If the final results they produced were often subject to interpretation by God and baby Jesus their methods were not, mathematical formulas and equations that made me want to run to the hills when I tried them as a student, gorgeous models of spun complexity and bewildering integers. Yet brains who can speak that Greek—when given their turn at holding the integrity and course of their great science—fell flat on their face and failed even where I had not, even I (as every undergrad and graduate student) learned basic depression economics.
There aren’t more economists out there other than DeLong, Krugman and Reich who know plainly and urgently what to do? Impossible. Our schools have to be good enough to abate this insanity, but the great fear is they may not do it in time, our margin for error has to be quickly vanishing.
In a perfect world economics would have dictated another trillion dollar stimulus last Fall instead of letting Baucus run amok with healthcare. Here we are a year later and we’re just trying to stop another insane evolution of State spending cuts.
Halting depressions is about fear and confidence just as much as the empirical injection of real numbers, when we lay off teachers and cops of course not only are we depressing the economic system, we’re horribly smashing our mental confidence to get out of this with spending. How can we ever have faith and confidence when we’re absolutely positive we can’t pass Econ 101 after eighty years of trying?
Struggling students are one thing, professors failing their science and country quite another. If there was ever a time to demonstrate truth in real time from a model we absolutely know works, Economics, by all the atoms in the universe that time is now, deliver the goods and save us.