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The Fever Swamps of Ricochet; or, How Not to Talk About Macroeconomics
Ricochet is a great place to discuss all sorts of things. Guns, for example. When it comes to firearms, Ricochetti — in contrast to the left-leaning media — know what they are talking about, can cite relevant facts and figures, and discuss the issues calmly and reasonably.
Unfortunately, when it comes to macroeconomics, all too often the roles are reversed. Which is a shame, because leftist approaches to the macroeconomy are disastrous, and we need conservative policies to turn things around. It helps no one when otherwise excellent Ricochet conversation turn to economic matters and begin to resemble the fever swamps that characterize leftist discussion of firearms.
I see three problematic trends in recent Ricochet threads.
1. Ignorance. When a reporter, pundit, or politician can’t distinguish between automatic and semi-automatic weapons, we rightly consider that ignorance disqualifying. If you haven’t bothered to do your homework on basic questions, why should we trust your policy prescriptions? Similarly on economic matters: If you haven’t bothered to learn some basic mechanics of how, say, an inflation index is constructed, and the tradeoffs involved, your other claims won’t be very persuasive — even if they may be right. I’m not saying you should shut up and listen to the experts, but you should be honest — first and foremost with yourself — about the limits of what you know and be willing to learn more.
2. Non-falsifiable claims. One of the challenging things about discussing guns with a lefty is that the evidence doesn’t seem to matter. Do more guns cause less crime? Impossible — that’s counter to my intuition! And if you happen to get through on that point, you often run up against a wall: So what if it’s true — children are dying! Don’t bother me with data. A number of commenters on Ricochet have, sadly, taken such a non-falsifiable approach to macroeconomic matters, especially in support of the idea that inflation is understated by official figures. And worse, some Ricochetti will tell you that the data must not only be faulty, but indeed manufactured to produce “the government’s” desired outcome. Aside from the fact that there are thousands of individuals and dozens of agencies involved in the dissemination of the data, consider: do you trust government statistics on crime and gun ownership? After all, it’s the same government and it has as much incentive to doctor those statistics as the economic ones.
3. Ends justifying means. After the Newtown school shooting, I remarked to a liberal friend that I found it disgusting how gun control advocates were exploiting the tragedy to push unrelated measures, things that never would have prevented the tragedy in the first place. He took umbrage at that. If we don’t take advantage of the fact that people are emotional about the issue now, these measures will never get passed! These are the right things to do, so there’s nothing wrong with leveraging voter ignorance to achieve them. This kind of pandering comes from the same impulse as Dan Rather’s reliance on fraudulent documents in reporting, and the “fake but accurate” defense. That a narrative is consistent with your prejudices — or voter prejudices — doesn’t make it true. Your personal experience is true for you, but that doesn’t mean you’ve perceived it accurately, or understood it in context, or that it reflects a larger reality. Of course, to win political battles, we need to tell stories of how the economy is affecting people. Of course, to win political battles we need to tap into voter perceptions and voter experience, not rely entirely on voter reasoning. But does that mean we should craft all our stories to exploit voter ignorance? To what extent are we supposed to subordinate the evidence to the narrative? As conservatives, let’s make sure that our narratives reinforce the truth rather than contradict it — whether on gun policy, foreign policy, or economic policy. Otherwise, just as Democrats have failed to persuade voters on guns, we will fail to persuade voters on the disasters of leftist economic policy, and on the promise of conservative approaches to make things better for them and their families.
Published in General
Son of Spengler,
My sincere thanks for spending your valuable time to make multiple responses to my question. I’ve asked it at least four times at this site- including at least twice at ricochet 1.0- and finally I’ve received an answer.
From Williams’ site, free, inspired by Rob Long above:
This is snipped from here:
http://www.shadowstats.com/article/special-comment
Now I know that Williams obviously has more time and space to make a case, as well as the added motivation of making a living- but to be honest I believe him more than I believe the same folks who gave us the infamous jobs report just prior to the 2012 election.
We’ll just have to disagree.
Many federal, state and city programs aimed at the poor, such as housing assistance have long defined eligibility requirements relatively – i.e. as the bottom X% of income adjusted for family size. That didn’t start with Obama.
And thanks for prompting this thoughtful and informative thread.
First, I think you mean “counterfactual” (what might have happened if different decisions had been taken) rather “nonfalsifyable”. By the latter, what I meant was that regarding economics, some Ricochetti maintain that X is true because of Y — but when you demonstrate that in fact Y is false, they still don’t care. To them, X is intuitively true, and can’t be shown to be otherwise.
A counterfactual is nonfalsifiable since it is merely a speculative reconstruction of history. But you get it anytime you question the Fed’s policy since 2008: “Things would have been a lot worse had the Fed not embarked on QE and zero percent interest rates.” No way to falsify that claim, but it is confidently stated as though the counterfactual were some sort of empirical data point.
I don’t think it is so much that inflation is “intuitively” true for people, as that it is confirmed by data in our own experience which your statistics do not vitiate. I look at my credit card statements. I know what I was paying for things 5 years ago and what I am paying for them now. I see that the 20 oz Coke in the machine down the hall was$0.90 in 2009 and is $1.50 now, etc. Then you crunch your numbers and come up with an “inflation” number of 1%. Fine – “inflation” is not an absoltely defined term, so strictly speaking it is impossible for your inflation number to be wrong, since “inflation” is defined by the methodology that generates it. QED. But we are perfectly within our rights to point out that the number you came up with thru your methodology is not reflective of our experience. And that is not “intuitive.” It’s empirical.
With respect to the analogy with gun ownership, guns are well-defined physical objects and ownership is a fairly well-defined state. It’s much harder to fudge that than inflation. Things are far more mushy when it comes to inflation, with a lot of subjectivity involved and evolving definitions.
Suppose that the government said that gun ownership went up 5%, but you discovered that included in that figure are bows, on the basis that inflation has made guns too expensive for many people so they are using bows as a substitute? Or that a semiautomatic weapon is now counted as owning four guns, since it has the firepower of several bolt action weapons? I, at least, would be suspicious of that ownership number and rightly so. But this sort of thing is routine in the inflation calculation. It may be necessary, but it is naive to think that the inflation number is anywhere near as hard an empirical number as gun ownership. And it is certainly reasonable to be more suspicious of the inflation number than the gun ownership number.
Speaking as an engineer, the inflation calculation strikes me as far too complicated and subjective to be really useful. If you can’t state simply what a quantity is measuring, it’s not a good measure. And certainly not one we should be hanging the nation’s economic future on (e.g. Janet Yellen’s 2% inflation target. What does that even mean? 2% as defined today, or 2% as defined in some as yet unknown way in the future?)
I find more useful things like the Big Mac Index. The Big Mac doesn’t change over time and people chow them down at a relatively constant rate. They cost $3.57 in 2009 and $4.62 in 2014 here in the states, which is about a 5% annual increase if my math is right. A basket of a few simple items like that would, to my mind, be more valuable than the witch’s brew that is the inflation calculation today. More complicated isn’t always better… unless obscurity is an unspoken goal. But that’s fever swamp territory.
Actually obscurity is inflation calcs is a goal – ostensibly to prevent rigging the system. I remember an article on this a few years ago where the reporter was told, quite explicitly, that basket of good used to track inflation was never supposed to be fully disclosed so as to prevent meddling, speculation, etc. So it’s not “fever swamp” to notice the obscurity of the system.
But it does make it increasingly difficult to define just what inflation really is. Sure a cotton dress of X thread count may be cheaper than it was a year ago, and this year’s phone is more capable for the same $$ than last year’s (items which have been revealed to factor into inflation calcs), but this does not have the same impact on perceptions as food and fuel. You don’t buy a new cotton dress of X thread count every week, but you do buy milk and gas.
This is not to suggest conspiracy, merely that we are up against the differences in how people perceive things.
How meta am I allowed to be? From where I sit, which is essentially as an enthusiastic amateur largely of the Austrian school slightly modified by Schumpeter and Keen, complaining about Ricochetti macroeconomic “ignorance” is a simple category error. Those asking “does macroeconomics even exist?” are on point. Claiming “inflation hasn’t hit yet” can only be said with a straight face by using the wrong definition of inflation, which, as the Austrians understand, is an increase in the money supply, which Keen would quickly point out is as much a “private banking” phenomenon as a government one, and the Austrians would come right back with “of course—that’s the evil of fractional reserve banking.” And so on. In any case, any definition of “inflation” that fails to account for asset bubbles is risible.
So this is problematic. On one hand, I sympathize with the desire to have informed interlocutors. On the other, choosing macroeconomics as the hill you want to die on strikes me as sensible as defending phlogiston theory or Lamarckism.
Rob, this is a key point and well said. The market believes there is inflation, and that can’t be dismissed lightly. Do you read John Tamny’s columns?
We don’t buy steak anymore. It’s not because of inflation; it’s just that it’s too expensive.