Brad DeLong's Semi-Daily Journal (2004)

Name names, Brad!

Or does anonymous sourcing now work both ways?

First belly laugh of the day! And its only 4:45 pm! Good thing I checked over here.

Kate

every call from a reporter is a chance to give them a story....

Ah, refreshing honesty. This is like my 3 year old son: "Can you tell [redacted] you were sorry for hitting him?" "No."

Still smarter than the guy who didn't understand the difference between short-term and long-term deficits...

http://www.j-bradford-delong.net/movable_type/2003_archives/002119.html

"Which are you doing?"

"The negative one..."

I agree. Refreshing honesty. Did you then say, "If you'll write the positive one, I'll give you a hand"? No reason you necessarily should make that offer, but it would be a nice response to an honest admission.

"The positive one would be to start by saying that presidents influence but do not control the economy--that most of what happens is the economy following its own path."

This assessment is at least in part contradicted by North vs South Korea, East vs West Germany, Taiwan vs Mainland China, Mainland China from 1950 to 1980 vs 1980 to 2000, India from 1960 to 1990 vs 1990 to 2000, etc.

Governments *don't* let economies "follow their own paths." The U.S. government may let the economy "follow its own path" more than others, but when federal taxes are 25% of the national income, and federal regulations cover an even greater portion of the economy than that, it really can't be argued that the U.S. economy is "following its own path." (And that doesn't even include Fed policies!)

P.S. It's a bit depressing that Congress seems to be entirely left out of the picture by everyone. I remember (from history books anyway) when we had 3 branches of government...

Yes Mark -- Congressmen are now too busy selling their votes.

Neither can it be argued that the U.S. economy ISN'T "following its own path", by definition. It's an unkempt distinction. What you really mean to say is that you have swallowed the Hayek-Friedman conceit that regulation leads to socialism. If you don't like government, say so, nobody can really like it much, but don't pretend that lopsided distribution of income, neighborhood effects, externalities, public goods, transactions costs, asymmetric information, imperfect competition, monopoly, and institutions such as firms, all don't exist. Nor that these "problems" can be resolved by well-defined property rights and markets. The U.S. economy follows its own path only BECAUSE of government--as well as all the other ingredients of capitalism.

But certainly, in our system, the leader can't CONTROL the economy.

Dear Dear Brad

This was much needed.

Anne

I use an administration's economic policies as sort of "indicators" of their priorities and beliefs. Trying to tie political positions with economic performance, even using econometric analysis (which most journalists wouldn't) is extremely difficult.

So, say, the cost of a president's tax cuts could be weighed against other comparably priced initiatives to see just what they value. But even that is problematic, with dynamic effects an' all.

Mark, I can only imagine that Brad was referring to the presidents in this country. Obviously the cases you offer provide a counterargument, but I imagine his comments presupposed a capitalist society.

Brad,

Do you have a link to an example of a positive story? Or could you write or assist someone in writing one?

Mark Bahner wrote:
" 'The positive one would be to start by saying that presidents influence but do not control the economy--that most of what happens is the economy following its own path.'

"This assessment is at least in part contradicted by North vs South Korea, East vs West Germany, Taiwan vs Mainland China, Mainland China from 1950 to 1980 vs 1980 to 2000, India from 1960 to 1990 vs 1990 to 2000, etc."

As abhishiktananda wrote, BDL specified presidents of this country, not governments.

"Governments *don't* let economies 'follow their own paths.' The U.S. government may let the economy 'follow its own path' more than others, but when federal taxes are 25% of the national income, and federal regulations cover an even greater portion of the economy than that, it really can't be argued that the U.S. economy is 'following its own path.' (And that doesn't even include Fed policies!)"

And what would the "path" be, sans government?

And as a "royal" libertarian, I suppose you're not unhappy about the part about the government in the US handing landowners Ricardian land rent to the tune of perhaps 14% of GDP annually.

A benevolent view of the effects of voluntary action is essential for politicians and those who write about them. Journalists would certainly go for the 'negative' story.

"liberal" : "US handing landowners.....land rent to the tune of perhaps 14% of GDP annually"

Wow!

can you give a link on that?
Thanks.

Mark Bahner assumed that we all understood the basic fact in question, which is that the Democratic party wants to impose Kim Il Sung economic planning on the U.S. If Kerry is elected, within two or three years Americans will be eating grass and cardboard.

So it's purely coincidence that the indicators of economic performance since Hoover are better for Democrats than Republicans?

Then voters should vote Democratic because Democrats are just luckier.

Sure, presidents have limited control over the economy. But they have *plenty* of control over tax policy, the waging of wars, (through Fed appointments) loose vs. tight economic policy and fiscal policy.

That's enough to show up in the statistics and it's perfectly appropriate for people to discuss it. It is *not* a subtraction from knowledge as long as people understand that the differences observed are due to policy, not some party affiliation per se.

Interesting post. "[T]hrow[ing] together some simplistic indicators of presidential economic performance over which presidents have little or no control, and rank[ing] presidents by those indicators" is a commonly cited attribution error. See http://econlog.econlib.org/archives/000150.html#000150 for similar thoughts.

I wrote, "Governments *don't* let economies 'follow their own paths.' The U.S. government may let the economy 'follow its own path' more than others, but when federal taxes are 25% of the national income, and federal regulations cover an even greater portion of the economy than that, it really can't be argued that the U.S. economy is 'following its own path.' (And that doesn't even include Fed policies!)"

"liberal" responded: "And what would the "path" be, sans government?"

Sans any government at all, I don't know. It would depend what non-governmental mechanisms were in place to handle such things as crimes involving violence and fraud. If there were no mechanisms at all to address crimes involving violence and fraud, the path would certainly be straight down the toilet (e.g., if there was absolutely no method to deal with a person murdering another person and taking all that the other person owns, there would be very little incentive to own things).

If there was a federal government limited to the powers enumerated in the Constitution (i.e., a federal government less than half its current size) we'd be talking about the U.S. economy's growth averaging at least 2-3% more per year. (But there would also be greater swings in growth.)

"And as a "royal" libertarian, I suppose you're not unhappy about the part about the government in the US handing landowners Ricardian land rent to the tune of perhaps 14% of GDP annually?"

Please show me where the U.S. government is giving landowners ~$1.4 trillion per year. But while we're discussing land ownership, I'm very *unhappy* with the U.S. federal government's completely unconstitutional ownership of approximately 30% of the land area of the United States!

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