Everything that’s wrong with macroeconomics

by Russ Roberts on September 8, 2011

in State of Macro, Stimulus

This quote from the New York Times article on the president’s speech, highlights everything wrong with macroeconomics as practiced in the public domain:

Preliminary analyses of the White House plan estimate that the tax cuts could create more than 50,000 jobs a month, a significant boost considering that employment climbed by 35,000 jobs, on average, in each of the last three months.

Yes it would be a significant boost. If it happened. Of course, 100,000 jobs a month would be even better. But I guess the preliminary analyses didn’t show that. But how did they get the 50,000 number? A preliminary analysis. By whom? When? Using what assumptions? And where did the Times get that estimate? From the White House press team?

But the number 50,000 is treated as something like a fact. One reason it’s not close to a fact is that there’s no way of verifying whether this “estimate” is accurate after the fact. So what’s the meaning of this estimate? None. It’s a meaningless statement. But the media treats it like it’s science. It’s not science. It’s fake science. It’s scientism.


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