Confessions of a Newspaper Economist
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 doesnâ€™t fit his models?
You canâ€™t reconcile these two groups, because these are not the same economists. On the one hand, we have what we might call â€˜newspaper economistsâ€™ 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 â€˜academic economistsâ€™ 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.)