Confessions of a Newspaper Economist

Declan picks up on Stephen’s suggestion that economists were too diffident to raise concerns about the real estate bubble:

How to square the group of economists in the front pages of the paper offering a series of right wing prescriptions supported by neither fact nor theory with the economist unwilling to point out a housing bubble because it doesn’t fit his models?

You can’t reconcile these two groups, because these are not the same economists. On the one hand, we have what we might call ‘newspaper economists’ who seem to function primarily as big business shills and see tax cuts, interest rate cuts and spending cuts as the solution to every problem whether it be boom or bust, surplus or deficit. On the other hand, we have ‘academic economists’ who take on the thankless and to date mostly unsuccessful (in macroeconomics, anyway) task of trying to understand economics well enough to build a theory of economics that will actually prove useful, occasionally blogging but generally leaving the public stage to the corporate, newspaper economists

As usual, Declan provides some excellent insight, but I see more of a connection between the two groups. The neoclassical theory to which most academic economists adhere supports the “free market” policies that most newspaper economists advocate.

Having the newspaper economists put forward the right-wing policies, often in the teeth of empirical evidence, allows the academic economists to maintain a guise of neutrality. But academics who perpetuated theories that underpinned (or at least justified) deregulation, tax cuts, etc. should bear some blame for the consequences of those policies.

Another trend, which may reflect diffidence, is many academic economists steering clear of the big policy questions in favour of smaller topics more conducive to a certain type of empirical analysis. These academics have embraced mathematical precision instead of trying “to build a theory of economics that will actually prove useful.” But the result is indeed to leave the public policy debate to newspaper economists.

Progressives must fight a two-front war: articulating economic theories that underpin a different policy agenda while also engaging with “the corporate, newspaper economists” in the public domain. In this vein, the Progressive Economics Forum brings together academic economists from outside the neoclassical orthodoxy and newspaper economists from the left.

Incidentally, as a non-diffident newspaper economist, I raised questions about Canadian real estate prices a year ago (although that post could be faulted for not raising the same questions about stock prices.)

18 comments

  • Progressives must fight a two-front war: articulating economic theories that underpin a different policy agenda while also engaging with “the corporate, newspaper economists” in the public domain.

    I’ve always thought that choosing to fight this two-front war is a strategic mistake. A progressive agenda can be advanced using mainstream economics; the theoretical battle isn’t one that needs to be fought.

    Worse, it leads people to make the mistake of concluding that that people who disagree on one front must disagree on the other.

  • We should certainly welcome whatever support we can get for progressive policies, regardless of its theoretical underpinnings.

    But at least some conventional economic theory must be challenged. For example, although Bill Robson’s opposition to fiscal stimulus is inconsistent with what most mainstream economists are now saying, it is consistent with the theories that have come to dominate academic macroeconomics.

  • Which off-the-shelf conventional theoretical explanation of unemployment are we going to use? The one where unions are the cause of unemployment; the one where efficiency wages are the cause of unemployment; the one where generous minimum wages and labour standards are the cause; or the one where payroll taxes are the cause? I await with baited breath to see the progressive agenda emanating from the bowels of “monostream” ™ economics.

  • From what I see, Robson’s arguments can be countered (and refuted convincingly, IMV) using the standard economics of the textbooks. Even better, you don’t get dismissed as a crank.

  • Stephen,

    Why dismiss all non-off the conventional shelf as Cranks? What is the cost of having a debate about theory? I just finished Blaug’s “confessions of a unrepentant Popperian” and he his much more flexible than you seem to be.

    But more to the point where is this Cannon of received doctrine where we can goto to find the divining line between accepted theory and Crankory? Surely, at best, all the monostream has is an epistemological litany (cost of the dance as it were) but not a theoretical house of received dogma (the dance one must dance).

    That is, of course, if one accepts that questioning conventional wisdom in the light of novel facts is a legitimate scholarly enterprise and not simply an unedifying and ultimately anti-intellectual activity.

  • There’s a lot more than two fronts – in addition to the two you cite, reconfiguring a media landscape which has business sections but not labour sections is another important task.

  • Although, to be fair, rebuilding / reshaping the media is a task for all progressives, not just progressive economists…

  • The media is a major part of what I meant by “public domain,” though I will not claim that my binary analysis is comprehensive of everything that progressives need to do.

  • I will say Erin that your point on this story is what has been on my mind a lot lately.

    The general public in these times relies on the “newspaper economist” to help them understand what within the complexities of the economic fabric are occurring.

    The small windows for information in developing this understanding during these times is very important for the general public. Unfortunately as mentioned, the “newspaper economist” in Canada, is constructed mainly from material that proports a very biased neo- con perspective and theoretical basis. It is quite funny when you think about it, how these chains of causality within these sound bites are constructed. Wages need to be cut, union power needs to be curtailed, governments are too string, worker productivity is too low, and on and on.

    Where does this originate from and how does it peculate through the media, how is it perpetuated, is it mandated. Who chooses the talking head. These are all very important questions.

    I recall a few years back when Conrad Black was made his move to buy up quite a few newspapers. I also recall the fight a few of us put together and took him to the supreme court trying to block his purchase. I recall meeting with some of the editors and reporters who feared for there jobs and there editorial range being curtailed. We lost that battle in the courts, but we did raise the spectacle of how important media freedom is. It is still a very large problem in this country. However, this blog, these words right here, do matter and do effect what we all were worried about back 10 years ago. Sure this is a small blog and sure enough the progressiveness of media has a long way to go. However, the neo-con dam has leaks, and the dambusters must continue on.

    So yes people, Erin’s point is very very relevant, especially during these times is quite important.

    And Steven’s point about cranks is very important. It is the process in which the mainstream plugs up the leaks. Label it a crank, as the “Newspaper Economist” does not have the ability to make the expert analysis and must rely on the “experts” who determine who the cranks are, which as we all know many within the progressive movement are labelled.

    Oddly enough, the terrain on crank determination is changing, and I feel confident, with the shift in political power, former cranks such as many progressives will be established and many of the neo-con crowd will soon find life within the crank neighborhood there home. (it’s only taken 20 years, but change does happen) We are not quite there yet but soon.

    Paul

  • I think the reason there is no labour section in the newspaper is that there are only about 10,000 people working in the labour movement. There are more lawyers in the country, and we don’t have a lawyer’s section in the newspaper.

  • In Canada every second household on average has a union member in it. For many years most major newspapers had a labour reporter. Is this Stuart Murray former leader of the Manitoba Conservative party? If so you have injured and traumtized hundreds of young workers in this province during your time as CEO of Domo by not abiding by the provincial working alone regulation. I truly hope it is not that Stuart Murray because you should not have your name related to anything ‘progressive’.

  • 30% of the labour force is unionized.

  • A newspaper labour section could also cover issues that are relevant to employees who are not unionized.

  • Wow, that’s one of the most presumptuous and hostile misunderstandings I have ever faced related to my name.

    No, I am Stuart Murray from Vancouver, a researcher formerly of CUPE and the Canadian Centre for Policy Alternatives. Many progressives have used my research. I won’t elaborate on my party loyalties online, but I’m sure you can make a wild guess.

    So no I haven’t injured or traumatized hundreds of workers. But I occasionally shift back and forth between labour and HR. If I can elaborate, if you spend a year or longer away from the labour movement, you will notice that labour issues come to mind far less often than the weather, traffic, and crime.

  • And in other news, people explaining the lack of labour media coverage are absent-mindedly berated for being evil right-wingers. Attendance at the labour media debate was mysteriously low. Film at eleven.

  • It is much more than missing a few labour articulated news stories that I speak of.

    It is cultural genocide that labour has suffered over the past 30 odd years. I cannot put my finger on anything but a book to explain it. However, the good news is, progressive culture comes from passion,unfortunately for progressive types, passion will not pay the bills, just ask me and I’ll tell you the many tales I have of selling my economic ass on the streets of wealth. I once was an economic whore there is no doubt. And may just be back on the street again one day hooking my next economic analysis.

    I hope not.

  • As a new PEF member I find Erin Weir’s classification of economists a promising point at which to introduce myself and my present pet subject: apartment housing for the poor. Several larger issues I hinge on this one practical problem, which I face myself.
    [[Most of you with an economist’s resume will have equity, and several homes between which to drive back and forth, and considerable reason to hope for the real estate bubble to last, no matter who started it and with what justification. Although I have a graduate degree from the same business school as Alan Greenspan, I don’t consider myself a professional economist, but had good teachers in economics, and feel a calling to speak for economics, occasionally. (I do have a nominal refereed academic paper with Economics in the title, in a non-economic journal, and did a successful re-analysis of an econometric study by the Wharton Institute, finding that of course the tobacco industry does not benefit every other industry, as claimed, if one does not forget to subtract out the GNP as a confounding factor.)]]
    The impact of my work is a very sensitive issue to me, and partly because I am 10 years beyond retirement age, I tend to sidestep the more futile kinds of activism. So do I have a chance of being tolerated as an “activist economist”, if I have a website with pages on Low Cost Apartment Markets, Low Cost Living, and Malathion Spraying In Winnipeg? These are scrap-piles of provocative information and references, and the economics comes mostly only after that.
    My main concern is how one could reverse over a century’s neglect, and make some of the markets most crucial to poor people “free” enough to be acceptably competitive and non-exploitative (and less corrupt than they might turn out to be if operated as utilities, as the Romans had trouble with that already). A century ago the poor paid 5% or less of their income for housing. Stranded Canadian mortgagees are now expected to pay 40% to qualify for government sympathy.
    My perception is that the economics profession is way behind in serving the public, as professions “profess” to do. In Europe politicians got sued for violating their oath of office, in protecting the tobacco industry instead of their constituents. In the States, the AMA was summoned before the FTC on several occasions, to answer questions about competitiveness. I don’t yet know how one could expect such things to work in Canada, where I have held only absentee citizenship for most of my life. Certainly real estate agents, who saddled unsuspecting consumers with mortgages way beyond their coping capacity should go to jail for that like GE and Westinghouse executives in the U.S. went to jail for price rigging. Unfortunately, the man who about 100 years ago announced that “The professions are a conspiracy against the public” was an economist himself, and so far hasn’t benefitted the public very much. Still, Market Maintenance is perhaps something that should be taught in graduate business schools, even if computer maintenance does not have to be taught in engineering schools because the need for it is self-evident. The coincidence of price inflation, eventually instrumental and self-reinforcing in the world financial crisis, with the introduction of unregulated, oligopolistic real estate pricing networks is another issue that I would like to see studied, with econometric rigor and impartiality. I certainly don’t have an employer who would want help with that. But one could start to build a case.

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