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Scuba

(53,475 posts)
Fri Apr 19, 2013, 01:10 PM Apr 2013

Meet the 28-Year-Old Grad Student Who Just Shook the Global Austerity Movement

http://nymag.com/daily/intelligencer/2013/04/grad-student-who-shook-global-austerity-movement.html


Most Ph.D. students spend their days reading esoteric books and stressing out about the tenure-track job market. Thomas Herndon, a 28-year-old economics grad student at UMass Amherst, just used part of his spring semester to shake the intellectual foundation of the global austerity movement.



Herndon became instantly famous in nerdy economics circles this week as the lead author of a recent paper, "Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff," that took aim at a massively influential study by two Harvard professors named Carmen Reinhart and Kenneth Rogoff. Herndon found some hidden errors in Reinhart and Rogoff's data set, then calmly took the entire study out back and slaughtered it. Herndon's takedown — which first appeared in a Mike Konczal post that crashed its host site with traffic — was an immediate sensation. It was cited by prominent anti-austerians like Paul Krugman, spoken about by incoming Bank of England governor Mark Carney, and mentioned on CNBC and several other news outlets as proof that the pro-austerity movement is based, at least in part, on bogus math.

...

"I clicked on cell L51, and saw that they had only averaged rows 30 through 44, instead of rows 30 through 49." What Herndon had discovered was that by making a sloppy computing error, Reinhart and Rogoff had forgotten to include a critical piece of data about countries with high debt-to-GDP ratios that would have affected their overall calculations. They had also excluded data from Canada, New Zealand, and Australia — all countries that experienced solid growth during periods of high debt and would thus undercut their thesis that high debt forestalls growth.

Herndon was stunned. As a graduate student, he'd just found serious problems in a famous economic study — the academic equivalent of a D-league basketball player dunking on LeBron James. "They say seeing is believing, but I almost didn’t believe my eyes," he says. "I had to ask my girlfriend — who's a Ph.D. student in sociology — to double-check it. And she said, 'I don't think you're seeing things, Thomas.'"

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Meet the 28-Year-Old Grad Student Who Just Shook the Global Austerity Movement (Original Post) Scuba Apr 2013 OP
Let's hope he did wryter2000 Apr 2013 #1
+100 So so true and very wrong but that is how the austerity nuts roll lunasun Apr 2013 #2
Krugman has a column in the NYT today on this. CTyankee Apr 2013 #5
Go! Go U! Go U Mass! Go UMass! ChangeUp106 Apr 2013 #3
Wonder if our resident austerity defenders Cal Carpenter Apr 2013 #4
Paul Krugman is right ONCE AGAIN! CTyankee Apr 2013 #6
He is tryingto guide us. But, our people and politicians don't seem to want any expert ladjf Apr 2013 #14
Before this thing came to light, PK was on MOrning Joe rebutting the entire panel all by CTyankee Apr 2013 #18
I read everything I see the Krugman writes in the paper. nt ladjf Apr 2013 #39
That's because.... paleotn Apr 2013 #66
ding, ding ding!! You nailed it, paleotn! tex-wyo-dem Apr 2013 #83
I just can't believe it was an honest mistake.... paleotn Apr 2013 #93
Lying in America's is the only thing we continue to manufacture in mass quantities. Bozvotros Apr 2013 #106
I think that Australia and Canada, at least, might have been purposely omitted Art_from_Ark Apr 2013 #109
Yes, I wonder why people like Krugman and Dean Baker, Stiglitz among others are not part of the sabrina 1 Apr 2013 #100
PK has written about that. He said he wouldn't be interested and it wouldn't be a good CTyankee Apr 2013 #103
Yes, I know, that's why I mentioned a few others. We have plenty of great economists in this country sabrina 1 Apr 2013 #104
It may change, tho! The development with this grad student taking down R. and R. is a CTyankee Apr 2013 #105
. snagglepuss Apr 2013 #7
Simpson and Bowles respond : "HUMMINA! HUMMINA! HUMMINA!" bullwinkle428 Apr 2013 #8
Hahaha. freshwest Apr 2013 #69
GIGO Garbage in Garbage out bklyncowgirl Apr 2013 #9
when the result looks just like you want it to look HereSince1628 Apr 2013 #15
Yup nt bklyncowgirl Apr 2013 #22
Message auto-removed Name removed Apr 2013 #10
Nah, Paul Ryan, Eric Cantor and Rand Paul will still be citing this study years from now. Scuba Apr 2013 #11
Seems to me Reinhart and Rogoff didn't make a "mistake" joeybee12 Apr 2013 #12
You are a "dark one". But, you just may well be correct. There are people who would ladjf Apr 2013 #16
The cynics are right nine times out of ten joeybee12 Apr 2013 #26
And on the remaining one of 10, they miss Jackpine Radical Apr 2013 #34
My favorite quote catchnrelease Apr 2013 #44
That's the one. Jackpine Radical Apr 2013 #50
Thanks catchnrelease Apr 2013 #54
I believe that came fromt he comedien Lily Tomlin. nt ladjf Apr 2013 #55
A lot more "dark" ones should speak out. EOM cartach Apr 2013 #36
Those hacks were either very careless or they were crooks. nt ladjf Apr 2013 #37
My thought exactly. "Strange" how their error worked to confirm their hypothesis... NoodleyAppendage Apr 2013 #19
Maybe that's why it was reported that they did not release their data which is a breach of ethics byeya Apr 2013 #23
Yes most scientific reports include the data. I was surprised to read that he had to email them and Maraya1969 Apr 2013 #79
Usually, unless you have friend who shield you, which these 2 do...nt joeybee12 Apr 2013 #30
very rich and powerful friends. paleotn Apr 2013 #67
""Strange" how their error worked to confirm their hypothesis..." tex-wyo-dem Apr 2013 #85
It wasn't just a computing error Benton D Struckcheon Apr 2013 #24
Yup...they knew what they wanted... joeybee12 Apr 2013 #27
Threads on economics and workplace democracy seem to get little play here although they byeya Apr 2013 #28
Obtain outcome FIRST, cook data to arrive at that outcome. HughBeaumont Apr 2013 #29
A Republican recipe for success! nt joeybee12 Apr 2013 #31
lies, damned lies, and statistics. pansypoo53219 Apr 2013 #33
That was my first thought too gollygee Apr 2013 #38
I'm pretty sure you're right. caseymoz Apr 2013 #64
ding siong we have a winner. elehhhhna Apr 2013 #82
They didn't show any remorse about it: rucky Apr 2013 #89
Teabaggers lap up lies like antifreeze IrishAyes Apr 2013 #108
I don't understand the sports reference. kentauros Apr 2013 #13
Sadly, more people know about dunking than those who what relatvity is. Scuba Apr 2013 #20
Yeah, you're probably right. kentauros Apr 2013 #21
Rules for Radicals NJCher Apr 2013 #17
K&R nt abelenkpe Apr 2013 #25
here's to edumacation! yea! ZRT2209 Apr 2013 #32
It's not often that Econ puts a smile on my face Hekate Apr 2013 #35
HUGE K & R !!! WillyT Apr 2013 #40
Another Problem . . FairWinds Apr 2013 #41
What's your basis for this? Herndon was credited as the lead author. Jim Lane Apr 2013 #90
Authorship? FairWinds Apr 2013 #102
Error my ass! It was on purpose! Rex Apr 2013 #42
Here's a link to Herndon's very readable paper. Jim__ Apr 2013 #43
Nice! blackspade Apr 2013 #45
Awesome! MatthewStLouis Apr 2013 #46
THAT"S UMASS AMHERST BABY!!! freethought Apr 2013 #47
What did Thomas see? Debt doesn't stall growth. I wish he would of added that sharing money=pro midnight Apr 2013 #48
Debt can, and often is, cancelled. Chapter 11 bankruptcy can leave creditors high and dry(except byeya Apr 2013 #59
Oh wow,...he looks nerdy enough to star on Maddow. Spitfire of ATJ Apr 2013 #49
Life is not that complicated. :-/ DeSwiss Apr 2013 #51
Austerity politics is nothing but plain stupidity. fasttense Apr 2013 #52
fabulous analogy... magical thyme Apr 2013 #97
ideology over data barbtries Apr 2013 #53
That scholar just made the A-Team. Octafish Apr 2013 #56
K & R Liberal_Dog Apr 2013 #57
I'd wish donquijoterocket Apr 2013 #58
Education mathewsj Apr 2013 #60
Great Work DallasNE Apr 2013 #61
Planet earth is too complex to be reliably modeled. Scuba Apr 2013 #62
A grad student sulphurdunn Apr 2013 #63
Only question is who plays the lead? Scuba Apr 2013 #65
K&R because this is actually very important 1-Old-Man Apr 2013 #68
That was no innocent, Excel error paleotn Apr 2013 #70
Let's listen to the wise man, heh? Brains will win over brawn eventually. freshwest Apr 2013 #71
There's an important take-away from this EvolveOrConvolve Apr 2013 #72
From what I've read that's not accurate. Jim Lane Apr 2013 #88
I'm not sure if that's better or worse EvolveOrConvolve Apr 2013 #95
Economics is not a Science...... Theyletmeeatcake2 Apr 2013 #99
It may not be a hard science, but economics is definitely a science EvolveOrConvolve Apr 2013 #101
This is huge malaise Apr 2013 #73
Facts, schmacks. Why look back? blkmusclmachine Apr 2013 #74
marking to return to rurallib Apr 2013 #75
Obama has become an austerity nut zentrum Apr 2013 #76
Reinhart and Rogoff, like Rove and all other Cons cui bono Apr 2013 #77
Two comments about the Reinhart and Rogoff study promoting economic austerity. AdHocSolver Apr 2013 #78
Wingnuts and banksters will now be clamoring for background checks . . . MrModerate Apr 2013 #80
help this old guy out a bit if you can. tiredtoo Apr 2013 #81
Exactly. Scuba Apr 2013 #87
A thank you xxqqqzme Apr 2013 #84
K&R Starry Messenger Apr 2013 #86
it's all bogus math. tomp Apr 2013 #91
it's all bogus math. tomp Apr 2013 #92
My guess is that the error was a feature, not a bug. nt tblue37 Apr 2013 #94
The discovery of the shoddy/perhaps deceitful and often cited work of 2 Harvard profs is epic!! hue Apr 2013 #96
Once had a private conversation with one of my math professor mrdmk Apr 2013 #98
Do you think the FACTS mean anything to this bunch? santamargarita Apr 2013 #107
Time for a kick Quantess Apr 2013 #110

wryter2000

(46,037 posts)
1. Let's hope he did
Fri Apr 19, 2013, 01:12 PM
Apr 2013

Austerity nuts don't need facts behind them. They can fall back on their regular arguments, no matter how out of touch with reality they are.

CTyankee

(63,903 posts)
5. Krugman has a column in the NYT today on this.
Fri Apr 19, 2013, 01:23 PM
Apr 2013

I hope this puts Joe Scarborough's panties in a wad such that he gets off the austerity stuff. He needs to have this stuck in his face by one of his show's guests...

Cal Carpenter

(4,959 posts)
4. Wonder if our resident austerity defenders
Fri Apr 19, 2013, 01:22 PM
Apr 2013

will stop repeating the Reinhart and Rogoff bullshit to defend their indefensible arguments?

No worries, I'm sure there will be another steaming pile of economic garbage designed to push this agenda soon enough. There always is..

CTyankee

(63,903 posts)
18. Before this thing came to light, PK was on MOrning Joe rebutting the entire panel all by
Fri Apr 19, 2013, 01:37 PM
Apr 2013

himself. He finally gave a little laugh and said "Look, how long do people like me have to be proven right?" Richard Haass gave him a dirty look and snipped "well, you're right until you're wrong!" Idiot.

paleotn

(17,911 posts)
66. That's because....
Fri Apr 19, 2013, 06:40 PM
Apr 2013

..."austerity" isn't really about sound economic policy that supposedly leads to stronger economic growth. That's just the cover. What it's really about is making sure bankers, wealthy investors, etc. are made whole on the backs of poor and middle class Joes, no matter how insanely convoluted and utterly stupid their "investment" was.

tex-wyo-dem

(3,190 posts)
83. ding, ding ding!! You nailed it, paleotn!
Fri Apr 19, 2013, 11:38 PM
Apr 2013

I've suspected for a long time that the austerity assholes have bought off a lot of "experts" and academics to help make their case without looking blatantly dictatorial.

Now the question is: was the "oversight" or "error" a purposeful attempt to skew the data in favor for the pro-austerity crowd, or was it an honest mistake?

paleotn

(17,911 posts)
93. I just can't believe it was an honest mistake....
Sat Apr 20, 2013, 09:35 AM
Apr 2013

...Reinhart and Rogoff are smart enough to check, recheck and re-recheck their data before going public. That's just too convenient an excuse, given the timing...just as "austerity" became all the rage among many economic practitioners. Seems to me it was a purposeful but sloppy attempt to support their preconceived ideas and make the data say what they wanted it to say. So maybe they're not as smart as I think they are. Regardless, I have zero tolerance for those that knowingly twist the data to make it say what they want it to say.

Bozvotros

(785 posts)
106. Lying in America's is the only thing we continue to manufacture in mass quantities.
Sun Apr 21, 2013, 07:18 PM
Apr 2013

We are very good at it and our people have a tremendous appetite for it. Advertising is just one lie after another. Politicians and their endless campaigns live or die with strategic applications of the lie. Conservative radio is awash in it with virtually no opposition views permitted in most markets. The pulpits pour lies down on us. Schools shovel it into our children. Pharmaceutical and chemical companies constantly serve up bogus research that gets immediate air time and acceptance. When bankers and mortgage brokers lied their asses off what happened? Bushco?

What consequence is there for all the fucking lies that dominate our culture? This story will disappear. Their will be a cover story to explain why it doesn't matter and then we'll resume the lying chatter about how doomed we are unless we cut down some more safety net.

Art_from_Ark

(27,247 posts)
109. I think that Australia and Canada, at least, might have been purposely omitted
Tue Apr 23, 2013, 02:36 AM
Apr 2013

because they are special cases. That is, both countries have relatively small populations that occupy large land areas that are producing huge amounts of minerals that are currently selling for high prices. So the influx of mineral wealth for their relatively small populations is bound to provide economic stimulus, regardless of other conditions.

sabrina 1

(62,325 posts)
100. Yes, I wonder why people like Krugman and Dean Baker, Stiglitz among others are not part of the
Sun Apr 21, 2013, 10:22 AM
Apr 2013

president's cabinet while those who have been wrong about everything have so much access, appointed to the Deficit Commission eg, morons like Alan Simpson.

Let's hope he reads this report and puts a stop to these insane policies that have failed so spectacularly for the people of Europe and South America.

CTyankee

(63,903 posts)
103. PK has written about that. He said he wouldn't be interested and it wouldn't be a good
Sun Apr 21, 2013, 12:29 PM
Apr 2013

fit. He has to be on the outside, casting a critical eye. He would be co-opted by politics if he were part of the WH...

sabrina 1

(62,325 posts)
104. Yes, I know, that's why I mentioned a few others. We have plenty of great economists in this country
Sun Apr 21, 2013, 12:57 PM
Apr 2013

but none of them are driving the policies that are so devastating to ordinary people.

CTyankee

(63,903 posts)
105. It may change, tho! The development with this grad student taking down R. and R. is a
Sun Apr 21, 2013, 02:24 PM
Apr 2013

good sign! Take heart...it may be the beginning of the end of "austerity" popularity in the U.S., esp. since we are watching it unfold in Europe and it is very bad...

bklyncowgirl

(7,960 posts)
9. GIGO Garbage in Garbage out
Fri Apr 19, 2013, 01:26 PM
Apr 2013

First thing I learned in my first computer class back when Tricky Dick was president. Also make sure you check your work.

HereSince1628

(36,063 posts)
15. when the result looks just like you want it to look
Fri Apr 19, 2013, 01:31 PM
Apr 2013

you don't feel like there is a reason to check it too carefully.

Most other people will both assume you did check it,

and some will say "Oh Numbers! This is scientific and must be true."

Response to Scuba (Original post)

 

joeybee12

(56,177 posts)
12. Seems to me Reinhart and Rogoff didn't make a "mistake"
Fri Apr 19, 2013, 01:30 PM
Apr 2013

They knew exactly what they were doing in order to get their desired outcome.

ladjf

(17,320 posts)
16. You are a "dark one". But, you just may well be correct. There are people who would
Fri Apr 19, 2013, 01:32 PM
Apr 2013

have paid lots of money for that bogus report.

Jackpine Radical

(45,274 posts)
34. And on the remaining one of 10, they miss
Fri Apr 19, 2013, 02:31 PM
Apr 2013

by not being cynical enough.

Points to the first person to add the correct Lilly Tomlin quote here.

NoodleyAppendage

(4,619 posts)
19. My thought exactly. "Strange" how their error worked to confirm their hypothesis...
Fri Apr 19, 2013, 01:38 PM
Apr 2013

In other situations, this sort of thing generally results in accusations of scientific misconduct (if at least a serious examination).

Maraya1969

(22,478 posts)
79. Yes most scientific reports include the data. I was surprised to read that he had to email them and
Fri Apr 19, 2013, 09:32 PM
Apr 2013

ask for it. You should be able to access that type of information online, even if you have to pay for the report.

paleotn

(17,911 posts)
67. very rich and powerful friends.
Fri Apr 19, 2013, 06:48 PM
Apr 2013

...in the hard sciences, think petroleum industry shills paid for and backed by Exxon, among others.

tex-wyo-dem

(3,190 posts)
85. ""Strange" how their error worked to confirm their hypothesis..."
Fri Apr 19, 2013, 11:46 PM
Apr 2013

Kind of like how all those voting machine errors just happen to favor the rethug candidate....strange how that happens.

Benton D Struckcheon

(2,347 posts)
24. It wasn't just a computing error
Fri Apr 19, 2013, 01:44 PM
Apr 2013

They also did the following:

1 - All of the data points from a country were averaged in and that was taken as a single data point. What this did was to mask the fact they had more info from some countries than from others, info that in many cases contradicted their thesis.
2 - They left out the period 1946 - 1950 in some cases. Those are very significant years as that was right after WWII, when debt levels would have been high, but so was growth.

Both of these point very very strongly to deliberate distortion of the data. I doubt that "error" was an error.

 

joeybee12

(56,177 posts)
27. Yup...they knew what they wanted...
Fri Apr 19, 2013, 01:51 PM
Apr 2013

I posted a thread about them a couple days ago that died...both have ties to the IMF, which may or may not mean anything.

 

byeya

(2,842 posts)
28. Threads on economics and workplace democracy seem to get little play here although they
Fri Apr 19, 2013, 01:57 PM
Apr 2013

are about as important issues that we face.

caseymoz

(5,763 posts)
64. I'm pretty sure you're right.
Fri Apr 19, 2013, 06:04 PM
Apr 2013

Economists are corruptible. They're endowed by people like the Koch Brothers. I'm hoping there's a wider scandal that spreads about this.

rucky

(35,211 posts)
89. They didn't show any remorse about it:
Sat Apr 20, 2013, 07:22 AM
Apr 2013
"...the weight of the evidence to date –including this latest comment — seems entirely consistent with our original interpretation of the data"


http://blogs.wsj.com/economics/2013/04/16/reinhart-rogoff-response-to-critique/

IrishAyes

(6,151 posts)
108. Teabaggers lap up lies like antifreeze
Mon Apr 22, 2013, 10:31 PM
Apr 2013

After my last letter to the editor in our local weekly, some guy wrote back next issue screeching at the top of his lungs about "LYING SOCIALIST HYENAS!" Gee, he could've hurt my feelings with that.

kentauros

(29,414 posts)
13. I don't understand the sports reference.
Fri Apr 19, 2013, 01:30 PM
Apr 2013

Seems that a better analogy (because academics are being discussed) would be that this is akin to an undergrad physics student finding a major flaw in General Relativity. Most people would understand that

Anyway, I'm glad there are people like Herndon double-checking things like this

kentauros

(29,414 posts)
21. Yeah, you're probably right.
Fri Apr 19, 2013, 01:41 PM
Apr 2013

I suspect many would recognize the famous formula and still not know what they were looking at, too.

NJCher

(35,654 posts)
17. Rules for Radicals
Fri Apr 19, 2013, 01:36 PM
Apr 2013

He's putting one of Saul Alinsky's rules from Rules for Radicals into effect: make sure your opponent plays by the rules. And in fact, make sure your opponent plays by his own rules.

In my efforts as a social activist, this has been the one rule that has paid out the most consistently for me--checking for errors on their part. Holding their feet to the fire and making sure they have every dot on the "i's" and every "t" crossed.

Hooray for Herndon!!


Cher

Hekate

(90,645 posts)
35. It's not often that Econ puts a smile on my face
Fri Apr 19, 2013, 02:35 PM
Apr 2013

But after the totally grim past week, I am smiling from ear to ear. Thank you young Dr. Herndon!

 

FairWinds

(1,717 posts)
41. Another Problem . .
Fri Apr 19, 2013, 02:51 PM
Apr 2013

is that sometimes professors take credit for the work done by their students.
As nearly as I can tell, Pollin and Ash do not give Herndon the credit he deserves, and they should not be listed as co-authors.
This sort of thing happens all the time to grad students.

 

Jim Lane

(11,175 posts)
90. What's your basis for this? Herndon was credited as the lead author.
Sat Apr 20, 2013, 07:24 AM
Apr 2013

I think some professors would have elbowed Herndon aside and put their own names on as lead authors, even if the lowly grad student did most of the work.

Here, per the linked article, Pollin and Ash did make significant contributions. They "pushed him and pushed him and pushed him," which I interpret as meaning that they helped generate possible criticisms of the conclusion. That way the ultimate result is less subject to second-guessing.

 

FairWinds

(1,717 posts)
102. Authorship?
Sun Apr 21, 2013, 11:36 AM
Apr 2013

You could be right, but I think I made a legitimate point. In reading the article, it seemed to me that Pollin & Ash had only an advisory role.
Back in the day, I advised on lots of student papers, and even did considerable "pushing", but I did not put my name on them.
Once I was a faculty judge of an undergrad research paper contest in which a hefty reward was at stake. We rejected one of the papers, even though it was clearly the best, because it had a professor's name on the cover page as the co-author. When we explained to the prof why his student didn't win, he responded by saying that the student had done "all the work". This begged the question of why, then, was his name on it? Crickets . . .

 

Rex

(65,616 posts)
42. Error my ass! It was on purpose!
Fri Apr 19, 2013, 02:52 PM
Apr 2013

At least someone went back and checked their math! TY Herndon...you cannot trust jackals.

Jim__

(14,075 posts)
43. Here's a link to Herndon's very readable paper.
Fri Apr 19, 2013, 02:57 PM
Apr 2013
Link

An excerpt:

...

RR adopts a non-standard weighting methodology for measuring average real GDP growth
within their four public debt/GDP categories. After assigning each country-year to one of
four public debt/GDP groups, RR calculates the average real GDP growth for each country
within the group, that is, a single average value for the country for all the years it appeared
in the category. For example, real GDP growth in the UK averaged 2.4 percent per year
during the 19 years that the UK appeared in the highest public debt/GDP category while
real GDP growth for the US averaged -2.0 percent per year during the 4 years that the
US appeared in the highest category. The country averages within each group were then
averaged, equally weighted by country, to calculate the average real GDP growth rate within
each public debt/GDP grouping.

RR does not indicate or discuss the decision to weight equally by country rather than by
country-year. In fact, possible within-country serially correlated relationships could support
an argument that not every additional country-year contributes proportionally additional
information. Yet equal weighting of country averages entirely ignores the number of years
that a country experienced a high level of public debt relative to GDP. Thus, the existence
of serial correlation could mean that, with Greece and the UK, 19 years carrying a public
debt/GDP load over 90 percent and averaging 2.9 percent and 2.4 percent GDP growth
respectively do not each warrant 19 times the weight as New Zealand's single year at -7.6
percent GDP growth or fivve times the weight as the US's four years with an average of -2.0
percent GDP growth. But equal weighting by country gives a one-year episode as much
weight as nearly two decades in the above 90 percent public debt/GDP range. RR needs to
justify this methodology in detail. It otherwise appears arbitrary and unsupportable.

...

midnight

(26,624 posts)
48. What did Thomas see? Debt doesn't stall growth. I wish he would of added that sharing money=pro
Fri Apr 19, 2013, 03:16 PM
Apr 2013

growth societies.... And it's not just for congressional members on the inside track for insider trading....

 

byeya

(2,842 posts)
59. Debt can, and often is, cancelled. Chapter 11 bankruptcy can leave creditors high and dry(except
Fri Apr 19, 2013, 04:11 PM
Apr 2013

for the banks) and often workers lose their contracts and their pensions. One Airline has gone through this twice, stiffing their employees and creditors. BUT, homeowners with houses under water, as the saying goes, cannot get this legal bailout - except in rare cases - but big business calls it a viable capitalist option for them.

Kids getting out of college with lifelong debt cannot qualify for a home(often) and are saddled with poor credit ratings.

Some debt is forgiveable - The High Moguls - and some debt is not(the rest of us)

 

fasttense

(17,301 posts)
52. Austerity politics is nothing but plain stupidity.
Fri Apr 19, 2013, 03:29 PM
Apr 2013

It basically says since the mass of people are NOT spending and the corporations are not spending or creating decent jobs, lets stop the government from spending too and watch our economy grow.

It's the same as saying let's cut back on watering the plants, lets cut back on fertilizing and mulching, and let's shade the sun out then watch the plants bloom. It defies common sense.

donquijoterocket

(488 posts)
58. I'd wish
Fri Apr 19, 2013, 03:58 PM
Apr 2013

There were a way to see into Reinhart and Rogoff's bank accounts to see if they had any major deposits lately and from where, and if so, then award Herndon a large proportion of those deposits. I'm sure that as a grad student he could use the money.

DallasNE

(7,402 posts)
61. Great Work
Fri Apr 19, 2013, 04:56 PM
Apr 2013

But I never have understood why people didn't go after the methodology used. For instance, if debt was all that mattered then the length of the period shouldn't matter yet they focused on 5 year spans. Would not it be reasonable to test it against say 3, 4, 6, 7 year periods. To be valid the answer to those other periods should also hold up. Likewise, what were the conditions that contributed to the debt, such as war, and wouldn't that have a big impact. Also, conditions leading into the study period would vary and that would impact the results simply because of the delay that is always present in economic activity. Even events with major trading partners can affect results. This is why I don't think a methodology can be developed that is reliable for measuring what Reinhart and Rogoff attempted and as economists they have to realize that so the purpose can only be political and best left to think tanks. As it is they cheapen the profession by not developing an honest study. I hope people learn something from this.

 

sulphurdunn

(6,891 posts)
63. A grad student
Fri Apr 19, 2013, 05:34 PM
Apr 2013

at a public university shoots down what appears to be a fraudulent study by Ivy League Brahmans designed to justify the transfer of national wealth into the hands the very elites who send their kids to the Ivy League to become masters of the universe. What's not to like about it?

1-Old-Man

(2,667 posts)
68. K&R because this is actually very important
Fri Apr 19, 2013, 06:55 PM
Apr 2013

That bogus study that this good young man exposed is the only piece of "factual" evidence Paul Ryan uses to justify his budget. His justification is a sham. That needs to be well known.

K&R and pleased to have done it.

paleotn

(17,911 posts)
70. That was no innocent, Excel error
Fri Apr 19, 2013, 07:00 PM
Apr 2013

...that's called data manipulation. These renowned, Haavaad professors just weren't smart enough to cover their manipulation. Idiots. The only thing worse than a liar is a sloppy liar. Bravo, Mr. Herndon!

EvolveOrConvolve

(6,452 posts)
72. There's an important take-away from this
Fri Apr 19, 2013, 08:05 PM
Apr 2013

The idea that the R&R study was out there for 3 years, and NO ONE thought to check the calculations? Economics is a science, and it would appear that the validation methods used in science to ensure correct results weren't applied to ANY part of the study.

We've reached a point where a study that (literally) has trillion dollar implications wasn't even given the minimal vetting needed to validate its results.

 

Jim Lane

(11,175 posts)
88. From what I've read that's not accurate.
Sat Apr 20, 2013, 07:16 AM
Apr 2013

People did think to check the calculations, and tried to. The obstacle was that R&R didn't release their data. Some economists tried to reconstruct the data independently, and couldn't. Even with the information that was available, the release of the R&R paper met with contemporaneous criticism.

The part about this episode that I don't understand is that, per the linked article, Herndon emailed R&R, and one of them responded by sending him the underlying data and the Excel spreadsheet with the error. People had previously tried to obtain precisely that information. Maybe Herndon just caught Carmen Reinhart on a good day.

EvolveOrConvolve

(6,452 posts)
95. I'm not sure if that's better or worse
Sat Apr 20, 2013, 09:52 AM
Apr 2013

Scientists don't release findings with a "trust us on the results" without releasing the underlying data. The idea that we'd take these results, with their trillion dollar implications, and apply them to public policy without any peer review, is insane.

http://en.wikipedia.org/wiki/Peer_review

Peer review is the evaluation of work by one or more people of similar competence to the producers of the work (peers). It constitutes a form of self-regulation by qualified members of a profession within the relevant field. Peer review methods are employed to maintain standards of quality, improve performance, and provide credibility. In academia peer review is often used to determine an academic paper's suitability for publication.

This whole thing stinks of corruption and a perversion of science to advance a particularly noxious conservative agenda.

Theyletmeeatcake2

(348 posts)
99. Economics is not a Science......
Sun Apr 21, 2013, 10:05 AM
Apr 2013

As an experiment that is replicated should come up with the same result .How many economists disagree on nearly everything?You've made a good point.

EvolveOrConvolve

(6,452 posts)
101. It may not be a hard science, but economics is definitely a science
Sun Apr 21, 2013, 11:17 AM
Apr 2013

And as with other soft sciences, economics is often interpreted differently by different economists. But that's not what happened here and we're not discussing various interpretations of the study's results. We're discussing the veracity of the actual data used to make the interpretations, and the methods used to perform calculations on that data. Those are both things that can be peer reviewed before a paper is even published.

Without peer review, the R&R study isn't worth the paper it's written on, and should never have been used to justify decisions that hurt millions of people. That's borderline criminal.

 

blkmusclmachine

(16,149 posts)
74. Facts, schmacks. Why look back?
Fri Apr 19, 2013, 08:14 PM
Apr 2013

Forward! Time to savage Social Security, for the benefit of the Too Big To Jail.

zentrum

(9,865 posts)
76. Obama has become an austerity nut
Fri Apr 19, 2013, 09:00 PM
Apr 2013

Because he always leads now with "we have to trim the deficit'. Which is the flip-side rhetoric for austerity mongering.

AdHocSolver

(2,561 posts)
78. Two comments about the Reinhart and Rogoff study promoting economic austerity.
Fri Apr 19, 2013, 09:18 PM
Apr 2013

First, from an economic perspective, their study is irrelevant to understanding what problems occur from having large debt.

The main problem with incurring debt is if you cannot repay it. If you lack the income or revenue to pay back the debt when it is due, then reducing your expenses will NOT help you repay the debt.

Only increasing your revenue will accomplish that. The austerity meme is utter nonsense. This is evident without the study.

If someone lacks the money to pay the rent, then not buying food will NOT help pay the rent.

Secondly, I worked for two different colleges at two different universities. In both cases I observed research in progress that was paid for by research grants.

In the first case, the experiments were rigged which I discovered as I had a chance to talk to the participating subjects after the research project was completed.

In the second case, the experimentation may have been authentic, but the data was subsequently manipulated to produce a specific outcome, so as to ensure that the research grant money would continue to flow.

Since their entire premise is illogical from the standpoint of economic analysis, then either these two guys are not very bright, or they purposely doctored their data assuming that no one would try to verify their results, as this Ph.D. student tried to do.

 

MrModerate

(9,753 posts)
80. Wingnuts and banksters will now be clamoring for background checks . . .
Fri Apr 19, 2013, 09:40 PM
Apr 2013

And stricter 'economist control' laws:

"Research papers don't kill reputations, researchers do."

tiredtoo

(2,949 posts)
81. help this old guy out a bit if you can.
Fri Apr 19, 2013, 10:11 PM
Apr 2013

Was this study used by the Simpson Bowles commission in their decision making process ? Is it now being used by folks on the right to support their quest for austerity? Sorry about my ignorance on this issue but i want to include link in my daily blog and need some clarification. Thank you

 

tomp

(9,512 posts)
92. it's all bogus math.
Sat Apr 20, 2013, 08:15 AM
Apr 2013

to support the plans of the rich to get richer. really, did anyone think otherwise?

hue

(4,949 posts)
96. The discovery of the shoddy/perhaps deceitful and often cited work of 2 Harvard profs is epic!!
Sat Apr 20, 2013, 10:15 AM
Apr 2013

Thanks Scuba for continuing to give exposure to this excellent news!!! It gives credence/credibility to what Dems have been standing for and fighting all these years!!

mrdmk

(2,943 posts)
98. Once had a private conversation with one of my math professor
Sat Apr 20, 2013, 01:39 PM
Apr 2013

He cited a Wall Street Journal Opinion piece that unions were the cause of high unemployment rates in Europe (year 2006).

Went home and did some research.

Used the CIA Factbook to find the unemployment rate for all European countries and did a simple means average. Yes Europe had a 10% unemployment rate as the article stated. One further examination of unemployment rates, it was found that ex-Yugoslavian countries (Serbia, Bosnia and Herzegovina, and Croatia) had a unemployment rate exceeding 50%. These countries were still recovering from a war.

Having an unusual high rate (an out-liner), not to mention an economy ruined by a war (anonymity), these three countries were taken out of the equation. To keep the data correct, three countries at the other end of the spectrum were taken out of the equation, Finland, Sweden, and Norway which had a 2% unemployment rate. Low and behold, the European unemployment rate was at 6%.

Also, this should be mentioned Poland had an unemployment rate of 40% in 2006 because of an economic adjustment. It was left in the equation.

Here is a statement of fact, according to most economic studies, the unemployment rate needs to be between 4% to 6% to keep inflation in check. In 1999, the U.S.A. had a 3.5% unemployment rate with no significant high inflation rate. The U.S.A. is at 7.4% unemployment rate with a 2.8% inflation rate when last checked. The 4% to 6% figure is part of the theory of wage inflation.

With the 6% unemployment rate, methodology, and figures in hand I approached my math professor after class to discuss the conclusion of the Wall Street Journal opinion piece. He did not want to discuss the article or the findings. He also accused me of, 'not allowing him to teach the class the way he wanted to!' That is a heavy accusation to a student. I am sure I am not the first one.

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