The stimulus worked (video)

[_EAllusion]

by the way, Judge Posner is not a prominent economist. In addition to that egregious mistake, it also suggests you don' know who Richard Posner is despite his fame. That's a shame, as he's got some truly atrocious ideas about privacy that we could laugh and laugh at together. Probably most humorously, he's affiliated with the University of Chicago's vaunted law school, what with him being a famous judge and all, not it's economics department. He occasionally writes on economics and law - his initial fame comes from reenergizing using economic tools to analyze the law - but he's pretty far off from being a "prominent economist." For one, he's not an economist.

Also, just as a heads up, "supply side economics" was influenced by neo-classical macroecnomics of which Chicago school is part of, but is not the same thing as Chicago school economics. Gad probably can explain the relationship better than I, but you seem to be deeply confused about what it is you are even rejecting.

[_Kevin Graham]

If the federal government simply paid people 100k a year to dig ditches and fill them back up it would have "worked" if we narrowly define that in terms of short term employment numbers and GDP growth. Whether the collective economic benefit was worth the cost, near and long term, is a separate question. You keep citing surveys of economists arguing that the stimulus had a particular economic impact to argue that economists near universally agree that it was a good cost-benefit decision, which at this point is either stubbornly ignorant or dishonest.

It is stubbornly ignorant or dishonest to intentionally ignore where we are now (because of the stimulus) with where we would have been without the stimulus (depression). Once you do that honestly, the benefits far outweigh the costs and so your quibble becomes irrelevant as far as cost-benefit goes. Economists understand this, which is why they supported it in the first place. You don't want to accept that and keep trying to score some imaginary point in all this. If you want to keep pissing in the wind with this silly "look how much it cost" without considering what we got in return, then be my guest. Just don't get upset because you fail to convince.

[_EAllusion]

It is stubbornly ignorant or dishonest to intentionally ignore where we are now (because of the stimulus) with where we would have been without the stimulus (depression). Once you do that honestly, the benefits far outweigh the costs and so your quibble becomes irrelevant as far as cost-benefit goes. Economists understand this, which is why they supported it in the first place. You don't want to accept that and keep trying to score some imaginary point in all this. If you want to keep pissing in the wind with this silly "look how much it cost" without considering what we got in return, then be my guest. Just don't get upset because you fail to convince.

There you go again taking your own opinions and placing them in the mouths of "economists" as a group. Did you read Gad's post where he cited a survey showing that less than half of the panel of economists felt the stimulus that they mostly agree created jobs was worth the cost? It simply does not follow from the fact that the stimulus lowered unemployment that the stimulus's negative effects were worth that benefit. It also does not follow from the fact that the stimulus elevated GDP growth and lowered unemployment that the alternative was an economic depression. The impact by the very links you use show it wasn't that extreme. It shaved some points, not completely altered the landscape. That's why some sources you habitually cite, Krugman for instance, called for a much larger stimulus.

There is a debate over whether there would've been a sharp depression sans TARP, but that's not the stimulus and the risks/costs that entailed when you add in the moral hazard were much deeper.

[_Kevin Graham]

by the way, Judge Posner is not a prominent economist. In addition to that egregious mistake, it also suggests you don' know who Richard Posner is despite his fame. That's a shame, as he's got some truly atrocious ideas about privacy that we could laugh and laugh at together. Probably most humorously, he's affiliated with the University of Chicago's vaunted law school, what with him being a famous judge and all, not it's economics department. He occasionally writes on economics and law - his initial fame comes from reenergizing using economic tools to analyze the law - but he's pretty far off from being a "prominent economist." For one, he's not an economist.

Also, just as a heads up, "supply side economics" was influenced by neo-classical macroecnomics of which Chicago school is part of, but is not the same thing as Chicago school economics. Gad probably can explain the relationship better than I, but you seem to be deeply confused about what it is you are even rejecting.

Oh so now you want to fall back on nuance when you need to find fault? Yes, I know it is more complex than that, but that hardly makes me "confused" about my point. We've been debating over supply-side vs. demand-side economics for quite some time on this forum, whether you realize it or not. If you need a Chicago educated economist who is a Keynesian, then look no further than Joseph Stiglitz. If you need a prominent Conservaive economist, then look no further than Greg Mankiw, who served under Bush. Mankiw wrote, "If you were going to turn to only one economist to understand the problems facing the economy, there is little doubt that the economist would be John Maynard Keynes. Although Keynes died more than a half-century ago, his diagnosis of recessions and depressions remains the foundation of modern macroeconomics. His insights go a long way toward explaining the challenges we now confront."

[_Gadianton]

Gadianton says I'm relying strictly on Thinkprogress, which is absolute nonsense.

Where did I say that?

All I have ever read since 2009 are conversion stories by prominent economists who went from the Chicago school to the Keynesian school and their conversion was driven by the overwhelming evidence provided by, not only the failure of supply-side economists, but also the victory of Keynesian, deficit spending, as a means to end recessions.

Who else is on the list? I ask because just the other day I was reading an article where Posner's solitary name was dropped to a similar end. The coincidence makes me think the list of New Classical/RBCT leaning economists turned Keynesian isn't very long. Preferably, the list should contain economists working in a relevant field.

And most recently we see overwhelming evidence that austerity measures are failing in places like Europe, which gives the Keynesian economists more reason to smile.

The survey I cited shows 12% of economists as candidates for bright smiles and 7% frowning. Economists aren't in the right field to be smiling brightly very often.

[_Kevin Graham]

There you go again taking your own opinions and placing them in the mouths of "economists" as a group. Did you read Gad's post where he cited a survey showing that less than half of the panel of economists felt the stimulus that they mostly agree created jobs was worth the cost?

You make it sound like I'm pulling this stuff out of my arse. I'm backing it up and you're still deflecting.

Did you even read his link?

"Less than half" only because 27% of them decided they'd wait to see how things play out. But 46% of those responding said they agreed that the benefits of the stimulus exceeded the costs. Only 12% disagreed. Weighted by "each expert's confidence," we see 60% agreed and only 14% disagreed.

Hello??

Any way you slice it, I think I can safely say I have the majority of economists on my side here.

It simply does not follow from the fact that the stimulus lowered unemployment that the stimulus's negative effects were worth that benefit. It also does not follow from the fact that the stimulus elevated GDP growth and lowered unemployment that the alternative was an economic depression. The impact by the very links you use show it wasn't that extreme. It shaved some points, not completely altered the landscape. That's why some sources you habitually cite, Krugman for instance, called for a much larger stimulus.

Well no crap Sherlock. That's what I've always said about the stimulus. It wasn't enough. But it did do what it was intended to do and only those who disagree are those who quickly forgot where we were before the stimulus.

Incidentally, I see from Gad's survey that there are some Chicago economists who agreed that the stimulus' benefits exceed its costs. Thaler and Goolsbee. Thaler "strongly agreed" which makes me wonder if he is another one of those converts to Keynesianism.

[_Kevin Graham]

I also notice some economists who didn't respond include the famous Keynesian Raj Chetty. No doubt had he got around to responding, he'd vote in the affirmative. Other prominent economists were not included (i.e. Stiglitz, Manikw, DeLong, Krugman). This survey seemed to be geared towards giving conservative institutions equal representation (Stanford, Chicago) even though they are in the minority... and yet you still see only a 12% disagreement.

No, I don't see any problem saying most economists agree with this.

[_Kevin Graham]

Incidentally, the only two economists who "strongly disagreed" were Caroline Hoxby and Edward Lazear, who hail from Stanford and are both Senior Fellows at the Hoover institute, a Conservative "Think Tank."

[_Gadianton]

Also, just as a heads up, "supply side economics" was influenced by neo-classical macroecnomics of which Chicago school is part of, but is not the same thing as Chicago school economics. Gad probably can explain the relationship better than I..

Someone needs to sort this out but I'm probably not the guy to do it. I think I learned this term on this forum. From reading the wiki entry, it's hard to place it as representative of any actual "school" of economics. It seems to me, the term is mostly politics and media driven; that is to say, it's virtually incoherent. I've read comments by New Classicals supportive of "supply side" while at the same time implying unfamiliarty with the term. At least one Chicago economist had written a book about supply-side economics, and I've seen the term come up in books that consider New Classical as supply-side, but context matters a lot. One major issue I have is that supply-side in the contexts I've often read about makes it hard to diffentiate from Keynes. I've had a couple of posts about this here, though I probably exaggerated a little in those posts.

It is stubbornly ignorant or dishonest to intentionally ignore where we are now (because of the stimulus) with where we would have been without the stimulus (depression)

You don't know that, you can't possibly know that. I don't think you appreciate how difficult it is to prove theories in economics empirically. Economics isn't an experimental science. There is virtually no way to truly answer this question for one, because no one in office will ever take the risk of inaction.

If you need a Chicago educated economist who is a Keynesian, then look no further than Joseph Stiglitz. ....Incidentally, I see from Gad's survey that there are some Chicago economists who agreed that the stimulus' benefits exceed its costs. Thaler and Goolsbee. Thaler "strongly agreed" which makes me wonder if he is another one of those converts to Keynesianism.

Kevin, there is no such thing as the "Chicago School" anymore. Chicago has been pretty diverse for a while. In fact, I'm not even sure if there are any conservative macro economists at Chicago, if there are, they sure are quiet. Your "conversion to Keynes" thesis is extremely problematic citing economists like Thaler for this reason. Thaler's bread and butter as a behavioral economist is 180 degrees opposite of the core thinking of the "Chicago School" so no conversion is necessary. Stiglitz likewise got his PhD from MIT so the fact he's a New Keynesian is predictable. By the way, do you understand the difference between Keynesian and New Keynesian thinking? As the voice of Keynes on this board, I hope you know this without looking it up at my suggestion. The two positions can be incompatible, not in the least for idealogical reasons. Krugman has made harsh comments about New Keynesian thinking that are predictable, that is, because the core ideas of New Classical were borrowed for overhauling Keynes. Krugman will have none of that.

Any way you slice it, I think I can safely say I have the majority of economists on my side here.

Depends on what you mean. If you mean more economists are influenced by Keynes vs. Chicago, you are absolutely right. There is a reason why the Chicago School was the "Chicago" school, because well, it was Chicago vs. everyone else(?). If you mean that the majority of economists share your particular beliefs that the stimulus was a knock-down drag-out victory that only a fool would question, then I do not think you have the majority of economists on your side. FYI, the economists on "my side" barely register. Vast minority, here.

[_EAllusion]

Hello??

Kevin, you are asserting that the majority of economists agree with that the benefits outweighed the costs. So a panel survey was cited where "I don't know", "maybe", and "no" outnumbered agreement with your assertion. Failure to assent is just that, not ageeing. Moreover, you are treating agreement that the stimulus reduced unemployment/enhanced GDP, which there is substantial agreement among economist on even in that survey, as tantamount to the vast majority of economists endorsing the stimulus being "worth it." You go so far as to act as though this is the received expert opinion. This is outright misleading.