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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsMeet 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.htmlMost 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 didnt 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.'"
wryter2000
(46,037 posts)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.
lunasun
(21,646 posts)CTyankee
(63,903 posts)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...
ChangeUp106
(549 posts)Cal Carpenter
(4,959 posts)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)Dr. Krugman is ALWAYS right...
ladjf
(17,320 posts)advice.
CTyankee
(63,903 posts)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.
ladjf
(17,320 posts)paleotn
(17,911 posts)..."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)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)...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)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)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)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)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)but none of them are driving the policies that are so devastating to ordinary people.
CTyankee
(63,903 posts)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...
bullwinkle428
(20,629 posts)freshwest
(53,661 posts)bklyncowgirl
(7,960 posts)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)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."
bklyncowgirl
(7,960 posts)Response to Scuba (Original post)
Name removed Message auto-removed
Scuba
(53,475 posts)joeybee12
(56,177 posts)They knew exactly what they were doing in order to get their desired outcome.
ladjf
(17,320 posts)have paid lots of money for that bogus report.
joeybee12
(56,177 posts)H.L. Mencken
Jackpine Radical
(45,274 posts)by not being cynical enough.
Points to the first person to add the correct Lilly Tomlin quote here.
catchnrelease
(1,945 posts)No matter how cynical I get, it's never enough to keep up.
Jackpine Radical
(45,274 posts)catchnrelease
(1,945 posts)That's my big accomplishment for the day, lol.
ladjf
(17,320 posts)cartach
(511 posts)ladjf
(17,320 posts)NoodleyAppendage
(4,619 posts)In other situations, this sort of thing generally results in accusations of scientific misconduct (if at least a serious examination).
byeya
(2,842 posts)Maraya1969
(22,478 posts)ask for it. You should be able to access that type of information online, even if you have to pay for the report.
joeybee12
(56,177 posts)paleotn
(17,911 posts)...in the hard sciences, think petroleum industry shills paid for and backed by Exxon, among others.
tex-wyo-dem
(3,190 posts)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)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)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)are about as important issues that we face.
HughBeaumont
(24,461 posts)joeybee12
(56,177 posts)pansypoo53219
(20,971 posts)fuzzy math means the so called experts are CRAP.
gollygee
(22,336 posts)A "mistake" that gave them their desired outcome. Uh-huh.
caseymoz
(5,763 posts)Economists are corruptible. They're endowed by people like the Koch Brothers. I'm hoping there's a wider scandal that spreads about this.
elehhhhna
(32,076 posts)added column wrong AND left off other data? BULLSHIT.
rucky
(35,211 posts)"...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)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)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
Scuba
(53,475 posts)kentauros
(29,414 posts)I suspect many would recognize the famous formula and still not know what they were looking at, too.
NJCher
(35,654 posts)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
abelenkpe
(9,933 posts)ZRT2209
(1,357 posts)Hekate
(90,645 posts)But after the totally grim past week, I am smiling from ear to ear. Thank you young Dr. Herndon!
WillyT
(72,631 posts)FairWinds
(1,717 posts)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)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)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)At least someone went back and checked their math! TY Herndon...you cannot trust jackals.
Jim__
(14,075 posts)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.
...
blackspade
(10,056 posts)MatthewStLouis
(904 posts)Great work!
freethought
(2,457 posts)My Alma Mater!! OOOOORAH!!!
midnight
(26,624 posts)growth societies.... And it's not just for congressional members on the inside track for insider trading....
byeya
(2,842 posts)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)
Spitfire of ATJ
(32,723 posts)DeSwiss
(27,137 posts)K&R
fasttense
(17,301 posts)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.
magical thyme
(14,881 posts)maybe it's because I'm a gardener, but I think most people could get
that.
barbtries
(28,787 posts)no benign errors here, i bet.
Octafish
(55,745 posts)As for Reinhart and Rogoff: Yeah, that's it. It was a mistake.
Liberal_Dog
(11,075 posts)A huge "Thank You" for Thomas Herndon.
donquijoterocket
(488 posts)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.
What a fine mind this kid has. Gives me hope
DallasNE
(7,402 posts)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.
Scuba
(53,475 posts)sulphurdunn
(6,891 posts)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?
Scuba
(53,475 posts)1-Old-Man
(2,667 posts)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)...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!
freshwest
(53,661 posts)EvolveOrConvolve
(6,452 posts)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)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)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
This whole thing stinks of corruption and a perversion of science to advance a particularly noxious conservative agenda.
Theyletmeeatcake2
(348 posts)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)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.
malaise
(268,930 posts)HUGE!!!
blkmusclmachine
(16,149 posts)Forward! Time to savage Social Security, for the benefit of the Too Big To Jail.
rurallib
(62,406 posts)zentrum
(9,865 posts)Because he always leads now with "we have to trim the deficit'. Which is the flip-side rhetoric for austerity mongering.
cui bono
(19,926 posts)have their own "math".
AdHocSolver
(2,561 posts)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)And stricter 'economist control' laws:
"Research papers don't kill reputations, researchers do."
tiredtoo
(2,949 posts)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
xxqqqzme
(14,887 posts)footnote for the 'girlfriend' (I'm sure she has a name).
Starry Messenger
(32,342 posts)tomp
(9,512 posts)to support the rich. really, did anyone think otherwise?
tomp
(9,512 posts)to support the plans of the rich to get richer. really, did anyone think otherwise?
tblue37
(65,328 posts)hue
(4,949 posts)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)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.