Saturday, August 22, 2009

Richard Posner

There is no need for another criticism of Richard Posner's criticism of Christine Romer (too put it mildly) but I can't help myself.

The post below is not only pointless, it is long. I will try a brief summary. Posner accused Romer of intellectual dishonestly, because he was sure that a speech she gave on the effect so far of the stimulus was " "responsible academic analysis." He knows that Romer has worked in the field and is a top notch academic economist (Posner has been cited a lot and, perhaps coincidentally, judges intellectuals by their citation count so he must know that Romer has been cited a lot too). I think he has an idea of what top notch academic economists are like based the ones he knows at the economics department and business school of the University of Chicago. There is indeed a huge contrast between *their* academic work and Romer's speech. However, there is no contrast at all between Romer's academic work and her speech. The speech is clearly, among other things, the continuation of a decades long research progect.

I think that Posner can't get his head around the fact that work which is viewed with contempt at the U Chicago economics department is massively cited.

now long boring post.

Professor Judge Posner has made mistakes which should be totally humiliating but is not humbled in the slightest. Most notably he casually compared the annualized growth rate of quarterly GNP to annual GNP effectively making a factor of 16 arithmetic error.

I do think there is something still to be said. Posner is not only persistntly unable to handle the IS-LM model, unfamiliar with national income and products accounts terminology, unfamiliar with federal budgetary terminology and arithmetically challenged (just start here and follow the links).

He is also unfamiliar with the standards of academic research at Berkeley (and Harvard). Discussing Romer's speech on the stimulus, his basic claim is

Romer's speech argues that the disbursements of stimulus funds through the end of the second quarter of this year (that is, through June 30) have had a big effect on economic output and employment. I said this was unlikely as a matter of theory, and that she had no persuasive evidence to back up her claim. And I raised the question of the ethical responsibilities of an academic who takes a government job and then makes a speech that although it deals with a subject that she had studied and written about as an academic is not a responsible academic analysis.

I have a different impression. My impression of the speech was that I wish I'd written it and submitted it to a journal. I think that it is unreasonable to compare it to a "responsible academic analysis," because academics don't have access to the resources (data and staff) which made it possible. I think it is obvious that the speech could be published in the AER. The editor might demand stylistic modifications, but the analysis is top notch.

More to the point it is exactly the sort of thing that Romer wrote when she was a professor at Berkeley. It is clear to me, and many others, that, when Posner contrasts the speech to Romer's academic work, he displays his total ignorance of her academic work.

I think the problem is partly that the economics profession is divided into schools of thought -- roughly fresh water and salt water -- with profound contempt for each other (although salt water economists such as C. Romer, D. Romer and N.G. Mankiw tend
to be polite in public).

I think it very likely that Romer's speech and her academic work is considered to be not* "responsible academic analysis" by top economists working at the economics departments of the Universities of Chicago and Minnesota. My guess (and it is a wild guess) is that they don't consider it to be economics, because it has nothing to do with maximization under constraint. The number one top leader of the school (Prescott) condemns econometrics as such and, in effect, argues that one must assume his theories are true even if they are inconsistent with the data. Even among those who don't regect econometrics as such, there is a profound disagreement about methodology.

At Berkeley, Harvard and MIT simple calculations are demanded.

There is (or was when I was there) pretty much an absolute rule that one must start with summary statistics, then look at correlations and cross tabs or something, then work up to a multiple regression (OLS) then probably do something with instrumental variables with identifying assumptions comprehensible and convincing to the man on the street.

This is pretty much a description of Romer's speech.
The relatively fancy IV part would be the cross state and cross national comparisons which Romer Posner** ignored entirely in his critique. Basically his argument was that the speech did not include the sort of analysis required to get a paper published in say the AER if you ignore the sort of analysis required to get a paper published in say the AER which was contained in the speech but ignored completely in his critique of the speech.

Some (Thoma mostly) suggest that Posner is showing contempt for the economics profession assuming a lawyer, law professor, judge and top notch microeconomist can handle macro without brushing up on the terminology. My guess is nearly the opposite. I suspect that he is in contact with macro economists who share his view of Romer's speech and that this made him sure he is on safe ground.

Basically his view is that Romer's speech is not respectable academic economics, because it clearly involves taking the IS-LM model seriously and considering the concept of a multiplier and because the empirical work is a combination of simple reduced form calculations and simple easily comprehensible instrumental variables regressions such that no fancy economic theory or econometric technique is required.

I think Posner genuinely doesn't know that a large fraction of the economics profession agrees with Romer's approach.

The fact is that top fresh water economists think they are the only top notch economists and dismiss salt water economists including the ones with Nobel prizes and stuff.

*update: Major oops. I left the "not" out of my original post. Corrected thanks to a comment.

** update 2: another booboo corrected thanks to comments.

update 3: speling errror korrected.


Anonymous said...

" because he was sure that a speach she gave on the effect so far of the stimulus was NOT "responsible academic analysis.""

Did you intend my "NOT"?

Is it correct to say that your view is that Posner was not bothered by his weak grasp of arithmetic because nobody who is anybody does arithmetic anyway, somewhat like an ancient Greek who believes that free men are to be served by slaves would not be ashamed of not knowing how to cook?

Is the claim here:

" think it very likely that Romer's speach and her academic work is considered to be "responsible academic analysis" by top economists working at the economics departments of the Universities of Chicago and Minnesota. "

missing a "not," or are you saying that the U of C crowd think it's responsible academic analysis, just not economics?

Does this:

"a lawyer, law professor, judge and top notch microeconomist" mean you consider Posner a top notch microeconomist? I'm not familiar with Posner's work, but I didn't know he is a economist at all.

Finally, I found Posner's casual, completely unsubstantiated condemnation of Krugman (my number two hero in economics (#1 is Sen)) quite offensive.

Robert said...

The bit on U Chicago and U Minnesota was indeed missing a "not". Sorry.

The NOT was intended. I was desribing Posner's view which is made very clear in the little bit I quoted later.

Yeah, I think that Posner is a prominent microeconomist. I don't mean that he has done any research outside of the law and economics stuff applying micro-economics to legal analysis, but I consider that in itself to amount to being a prominent micro-economist.

He is often cited in the economics literature.

I honestly have no idea why Posner was not totally humiliated by his arithmetic boo boo. His reaction boggles my mind.

Yes I too was very offended by his dig at Krugman. Krugman's columns, blog posts, and popular books are outstanding contributions to the debate. For one thing, many of them addressed issues which were, at the time, controversial in the academic literature and he proved to be right (I am thinking about the California energy crisis).

I'd say that, even knowing Krugman's academic work, I was very plesantly surprised at the extreme excellence of his columns and his incredible ability to explain economic theory in plain English.

As with C Romer's approach to macroeconomics, I think Posner tossed out his accusation against Krugman, because he thinks that everyone worthy of respect agrees that Krugman's column is no good. The problem is that everyone who he takes seriously is part of the same academic clique (or not to put too fine a point on it insane sect).

I have discussed Krugman with 2 of them. One just said (with a snear) "you probably like Krugman's column." I just said yes. He considered some point to be proven. The other was outraged when I asserted that Krugman's claims of fact are all correct. He said of course Krugman makes false claims of fact all the time, but couldn't name one (in the second case it's personal -- he's hated Krugman since the 80s).

Ken Houghton said...

"fancy IV part would be the cross state and cross national comparisons which Romer ignored entirely in his critique."

I believe that should be "...Posner ignored entirely in his critique."

But other than that, and your spelling of speech, that seems a painfully accurate analysis. (The part about NGM being polite is left as an exercise.)

Uncle Billy Cunctator said...

"The relatively fancy IV part would be the cross state and cross national comparisons which Romer ignored entirely in his critique"

Posner, right? Geez, everyone is making whoopsies lately.

rjs said...

a year from now the only thing i'll remember about this flap is posner's name, & as a result, i'll probably link to everything he writes...

Michael said...


I think at one point "Romer" is written where "Posner" is intended.

Anonymous said...

This word be more persuasive if you knew how to spell speech.

neroden@gmail said...


Failure to acknowledge a 16-fold arithmetic error with abject apologies?

Posner just discredited himself as any sort of academic whatsoever! I'm afraid post-tenure review would be appropriate!

Anonymous said...

Well done, but Poser was after insulting and belittling and intimidating and if in any way possible censoring Paul Krugman above all.

Poser is simply writing as an academic Joe McCarthy, in regard to Krugman and for a lawyer and judge to write so is chilling.

Anonymous said...

Poser has repeatedly demeaned Paul Krugman, with the evident intent of intimidation. Please do not miss this. Romer is of no special concern, but Krugman is. These autocratic and repressive folks are frightened by Krugman.

Anonymous said...

Misspelling Posner several times was simply careless and in no way intentional.

Anonymous said...

August 24, 2009

U.S. Military Says Its Force in Afghanistan Is Insufficient

Despite the recent addition of 17,000 American troops and extra security efforts surrounding the presidential election, the situation in Afghanistan is deteriorating.

Anonymous said...

August 23, 2009

Could Afghanistan Become Obama’s Vietnam?

WASHINGTON — President Obama had not even taken office before supporters were etching his likeness onto Mount Rushmore as another Abraham Lincoln or the second coming of Franklin D. Roosevelt.

Yet what if they got the wrong predecessor? What if Mr. Obama is fated to be another Lyndon B. Johnson instead?

To be sure, such historical analogies are overly simplistic and fatally flawed, if only because each presidency is distinct in its own way. But the L.B.J. model — a president who aspired to reshape America at home while fighting a losing war abroad — is one that haunts Mr. Obama’s White House as it seeks to salvage Afghanistan while enacting an expansive domestic program.

In this summer of discontent for Mr. Obama, as the heady early days give way to the grinding battle for elusive goals, he looks ahead to an uncertain future not only for his legislative agenda but for what has indisputably become his war. Last week’s elections in Afghanistan played out at the same time as the debate over health care heated up in Washington, producing one of those split-screen moments that could not help but remind some of Mr. Johnson’s struggles to build a Great Society while fighting in Vietnam....

Anonymous said...

August 23, 2009

Marines Fight Taliban With Little Aid From Afghans

KHAN NESHIN, Afghanistan — American Marines secured this desolate village in southern Afghanistan nearly two months ago, and last week they were fortifying bases, on duty at checkpoints and patrolling in full body armor in 120-degree heat. Despite those efforts, only a few hundred Afghans were persuaded to come out here and vote for president on Thursday.

In a region the Taliban have lorded over for six years, and where they remain a menacing presence, American officers say their troops alone are not enough to reassure Afghans. Something is missing that has left even the recently appointed district governor feeling dismayed. “I don’t get any support from the government,” said the governor, Massoud Ahmad Rassouli Balouch.

Governor Massoud has no body of advisers to help run the area, no doctors to provide health care, no teachers, no professionals to do much of anything. About all he says he does have are police officers who steal and a small group of Afghan soldiers who say they are here for “vacation.”

It all raises serious questions about what the American mission is in southern Afghanistan — to secure the area, or to administer it — and about how long Afghans will tolerate foreign troops if they do not begin to see real benefits from their own government soon. American commanders say there is a narrow window to win over local people from the guerrillas.

Securing the region is overwhelming enough. The Marines have just enough forces to clear out small pockets like Khan Neshin. And despite the Americans’ presence, Afghan officials said 290 people voted here last week at what is the only polling place in a region the size of Connecticut....

Anonymous said...

August 24, 2009

Census: Contractors Outnumber Troops in Afghanistan
By Amy Goodman

New figures meanwhile show military contractors in Afghanistan are now far outnumbering US troops. A Pentagon census shows there were nearly 74,000 contractors in Afghanistan in June, compared to the estimated 58,000 troops there at that time. * In Iraq, there were nearly 120,000 contractors and around 132,000 US troops.


Anonymous said...

August 22, 2009

Obama's Fate as much in the Balance as Afghan Presidential Candidates
By Juan Cole

The Financial Times argues that the final judgment on how upright the Afghan elections were matters enormously to the Obama administration. * If the US public decides these election results were phonied up, it will turn, FT argues, even more against the war than it already is (51 percent oppose the Afghanistan war in the US).

I don't think the US public cares so much about these elections. I think support for the Afghanistan war depends on the administration effectively tying it to concerns about Americans' safety and security. And since that argument is so hard to make convincingly, I can't see how public support for the war is going to come back. With dozens of US troops killed in July, moreover, people are hearing more bad news than good.

What I think is true is that a poorly executed Afghanistan policy could turn Obama into a one-term president. It is too early to judge exactly what Obama's policy will be in Afghanistan, but it should become clear within a few months. So far, Obama has not made the case and hasn't explained what the end game is.