Here we have not only the economy reacting to the Great Austerity Experiment better than predicted by the CBO, but even far better than predicted if there were no austerity.
Does this ring a bell? Do you remember the Great Stimulus Experiment of 2009? The time that the unemployment rate didn’t just rise much more than expected in response to the stimulus, it rose far more than expected under the alternative scenario of no stimulus!
Do you think that Jared Bernstein is going to change his mind because of these facts? I don’t.
Granted, I don’t think that anyone should completely change their mind based on macroeconomic observations. There is too much causal density to take any empirical evidence as definitive. But by the same token, no one is entitled to hold a view of macroeconomics without a scintilla of doubt. I wish that more commentators were willing to allow that there is a significant probability that they are wrong when it comes to macro.
This isn’t new. I’ve yet to see Krugeman, Reich, or Rubin indicate any possibility that they could be wrong. Lest one think that I’m picking on the Left, Boudreaux has also been known to stretch metaphors and analogies in order to support his ideas.
Beyond economics, try talking facts to a homeopath, anti-vaxxer, astrologer, or 9/11 conspiracy theorist.
If an “anti-vaxxer” is one who doesn’t like the current approach the government uses towards vaccinations, then I qualify. Want to talk facts?
My wife belongs to a book club and one of the women claimed that there was a certain passage in the book being discussed. Another woman disagreed and showed her the passage in the book which she brought to the meeting. The first woman said that she probably had a different version of the book. Moral: do not underestimate the ability of people to ignore plain facts, let alone something as (relatively) subtle as macroeconomic results.
There doesn’t seem any shortage of those who have doubts, after all, these models never predict recessions in the first place, don’t even have money in them, and wouldn’t know what a financial crisis was, but there is doubt as to magnitude and doubt as to sign. It would take much more definitive data or a much better model to reject even what little we do know.
This is one of Sumner’s best arguments. When he writes a post on this subject, I check Krugman’s blog to see if he acknowledges its existence much less replies to it. I have always been disappointed.