A Brief Note on Macroeconomics and Ethics, by Paul Krugman, in NY Times: I only have a few minutes here, but I want to acknowledge Karl Smith’s very gracious and brave response to my piece on economics in the crisis. And I’d also like to add a small further thought.
My argument in Lisbon was that what economists say in times of crisis, when the usual rules don’t apply, matters a lot. And so the fog created by all too many macroeconomists did a lot of real-world damage.
That said, disagreement will happen. Economics is a hard subject, people will come to different provisional conclusions, and some of them will, in retrospect, turn out to have given very bad advice. That’s a shame but not a sin.
To take an example: Ken Rogoff and I differ seriously on the relative risks of public debt and failure to spend on job creation. One of us is wrong , which means that the other is giving bad advice. (And yes, I’m personally sure that I’m right — but that’s a different argument). But this is an argument in good faith.
What bothers me, and should bother you, about much of this debate is that it pretty clearly is not in good faith. Too many economists and commentators on economics are clearly playing for a political team; too many others are clearly playing professional reputation games. Their off-the-cuff reactions to policy issues were wrong and foolish, and I think they know in their hearts that they messed up; but instead of trying to remedy the fault, they’re trying to defend the property values of their intellectual capital.
And that really is a sin. This is not an academic game, where tempers run high because the stakes are so small. This really matters to millions of people, and refusing to think clearly because you don’t want any negative thoughts about the papers you and your friends have been writing the past few decades is unforgivable.