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Confirmation Bias

Tweet [1]

Alex Tabarrok noted [2] that Krugman was worried about the effect of a budget deficit on interest rates in 2003 but not in 2012. And then Alex pointed out:

Now to be fair, Krugman covered himself in 2003 in a credible way he said “unless we slide into Japanese-style deflation, there are much higher interest rates in our future.” Thus, I do not fault Krugman’s forecasting ability. What I do fault is that despite a 180 degree about-face, one thing remains constant in all of Krugman’s writings, anyone who disagrees with him is portrayed as a mendacious idiot. In truth, Heritage today and Krugman 2003 both have legitimate concerns about the long-term debt situation of the United States and it would have been to the credit of Krugman 2012 had he acknowledged that point more fairly.

Krugman responded [3]by explaining that his change of views was reasonable. He ignored the claim that

one thing remains constant in all of Krugman’s writings, anyone who disagrees with him is portrayed as a mendacious idiot.

So Tyler pointed out [4] that omission.

Krugman then responded to the claim that he is rather intolerant of those who do not agree with him:

So Alex Tabarrok [2] thinks I treat everyone who disagrees with me as mendacious idiots, and Tyler Cowen [5] says that I always demonize my opponents.

I plead innocent. I only treat people as mendacious idiots if they are mendacious idiots.

Seriously: I have some big disagreements with Ken Rogoff, but if you use the little search box up there on the upper right and enter “Rogoff” I think you’ll find that I have always treated him with respect. On the other hand, enter “Heritage” and you’ll find me pretty scornful — but with very good reason! And I always document what I’m saying.

Now, what about people like Cochrane? You need to bear two things in mind. First, he and his friends entered this whole debate by declaring that Keynesian economics of any stripe was total nonsense, “fairy tales” that nobody serious believes. Then they proceeded to make howling, basic errors. And I was supposed to respond politely? I’ve never gone ad hominem on them — but I’ve called nonsense and ignorance when I see them. So?

And then he followed up [6] with a similar post:

This indicates, I think, a key problem in these debates. People like Kantoos or Tyler Cowen start from the presumption that when people with the right credentials, like Cochrane, or Jean-Claude Trichet, or Robert Lucas make strong statements, that they must have a defensible model behind their assertions. And so if someone like me or Brad says that there is no such defensible model, we must be engaged in a “rant”, treating these people unfairly.

But sometimes people with impressive credentials do talk complete nonsense — and on fiscal policy in the Lesser Depression, that has been more the rule than the exception.

So what purports to be a demand for fair-minded argument ends up, in practice, being a demand that we pretend to find a coherent position where none exists, that we basically invent a high-minded debate out of thin air.

The bottom line of macroeconomics these days is that neither side has much respect for the other. That is a shame. I am happy to admit I have learned much from Paul Krugman, particularly his book, The Return of Depression Economics. In that book, he often qualifies what he believes or admits that he believes x but that the data or our knowledge on the issue is less than perfect. The problem with Krugman the blogger is the frequency with which he discovers that his intellectual opponents are talking complete nonsense. Yes, complete nonsense should be ignored or dismissed. But when you see it often or nearly always, you should probably consider the possibility that you are overselling your own position.