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DownloadedFileThe GOP based their economic theory of austerity on the ‘excel error that destroyed the world‘.

Once again, Paul Krugman to the rescue.  His column is titled, simply, “Holy Coding Error, Batman!” It was a much more dignified way of saying I WAS RIGHT!  Well, looks like he has been right, all along.

“...The intellectual edifice of austerity economics rests largely on two academic papers that were seized on by policy makers, without ever having been properly vetted, because they said what the Very Serious People wanted to hear. One was Alesina/Ardagna on the macroeconomic effects of austerity, which immediately became exhibit A for those who wanted to believe in expansionary austerity. Unfortunately, even aside from the paper’s failure to distinguish between episodes in which monetary policy was available and those in which it wasn’t, it turned out that their approach to measuring austerity was all wrong; when the IMF used a measure that tracked actual policy, it turned out that contractionary policy was contractionary.

The other paper, which has had immense influence — largely because in the VSP world it is taken to have established a definitive result — was Reinhart/Rogoff on the negative effects of debt on growth. Very quickly, everyone “knew” that terrible things happen when debt passes 90 percent of GDP.

Some of us never bought it, arguing that the observed correlation between debt and growth probably reflected reverse causation. But even I never dreamed that a large part of the alleged result might reflect nothing more profound than bad arithmetic….”

Garbage in and garbage out!

Economists View

Economists View

The Pink Flamingo has been telling you, for months, that austerity doesn’t work.  It is a killer, a job destroy, a nation destroyer, that steals from the poor (the 99.9% of us) and gives to the rich (0.1%).  What if that model was wrong?  Anyone who has used a computer for very long knows the old adage – garbage in and garbage out.

Well….

Roll Call

Roll Call

Garbage went in and garbage came out.

Deficit hawks, for years, have used a study by economist Carmen Reinhart and Kenneth Rogoff as the basis for their determination to cut the budget to the point where the nation is hemorrhaging jobs, lives are being destroyed, and families ruined.  People are hurting in this country, thanks to the Reinhart – Rogoff study.

There was, Thomas Herndon, Michael Ash, and Robert Pollin have announced, a coding error in the spreadsheet.  It was an error, that left out 5 of 20 nations were left out of key calculations.  Economic growth was lowered by 0.3 percent.

National Memo

National Memo

In other words, the study is crap, pure, absolute crap.  Last Friday, the House Budget Committee based their criticism of Obama’s 2014 budget on the study.

Garbage in and garbage out.

Paul Ryan has based his ‘life’ on the study.

Garbage in and garbage out.

Jeff Sessions has used it extensively to destroy the economy.

Garbage in and garbage out.

National Memo

National Memo

It gets even better.  The far right adopted this study, even though it had been poorly vetted, debunked by leading economists like Paul Krugman, and could not be replicated.  It is pure, unadulterated crap.  It doesn’t work.  But, that doesn’t matter a bit.  If a liberal had done this, we would never hear the end of it from the usual far right sources.  But, since the study is one beloved by the libertarian right, you won’t hear a word of about it.

When historians go back and look at this week, with the bombing in Boston and the release of the rebuttal of the Reinhart and Rogoff study, The Pink Flamingo suspects that this is the bigger story.   This flawed study, and the Republicans who swear by it, have destroyed the lives of millions of people, in this country alone.  It has literally destroyed Greece, is destroying Italy, and making a mess of Spain.  Full implementation of their theory, that began to take place here in the US a few weeks ago, is already dramatically slowing growth and employment.

One may safely assume the far right won’t give a damn about it.  Sure, there is nothing wrong with cutting waste in government.  We need to do that.  We don’t need to be cutting Meals on Wheels, or grounding a third of the Air Force fighter jets!  I wonder how many Republicans who have lived by this study are going to admit they are using wrong statistics?

Slate

Slate

The far right likes to go after climate change researchers, claiming they use faulty work.  Well, they’ve based their entire economic model on what truly appears to be a deliberate exclusion of salient facts that have enabled two economists to literally destroy our nation’s economy.  Don’t count on any Republican to admit they were wrong.

The Pink Flamingo may not be an economist and can barely balance a check-book, but I know what looks right and what doesn’t.  I rather enjoy being right about this one.  It proves my Grandfather Froehlich was also right.  Taking it one step farther, libertarian billionaires who don’t want the US to have any debt and endorse austerity have no problems carrying huge amounts of debt to finance their huge businesses.  If it’s good for them, why isn’t it good for the country?

Garbage in and garbage out!

The best part – Ayn Rand is now proven wrong.  The myth of the maker and taker is wrong.  I love being right!

So, now the GOP is stuck with a financial ideology that is based on discredited theory, that was not peer reviewed, and never showed the sources.  It reminds The Pink Flamingo of the much ado about Bigfoot DNA, Melba Ketchum, and her Bigfoot Genome Project.  Her work was subjected to far more scrutiny that the Reinhart-Rogoff Research.  She was attacked, critically, and is being forced to back up her claims.  NOT one single conservative or media economist ever questioned Carmen Reinhart and Ken Rogoff, nor demanded the produce their sources and their numbers.

NOT ONE….

When research into the validity of Bigfoot is, even by the critics, seen as more reliable and credible than the economic report that the entire GOP austerity nightmare is based, then, well we have a problem.

Garbage in and garbage out!

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3 Comments

  • jose maria says:

    Like it or not, the basic premise of R and R is still true. There is a correlation between debt and economic growth. If you buy a new home and a new car, you are going to have less money to spend on other things until the debt is paid off. A debt level of 90 to 100 percent means that at least 5 percent of GDP is going toward debt. Syhoning off that much of a nation’s wealth is bound to have an effect on the economy. The only people who benefit from a nation’s debt are politicians and millionaire professors. The reason there has not been hyperinflation in this country is because most of the increased money is in bank reserves that have not become circulating dollars.

  • Pete says:

    Well… Lets… Um…
    OK, I came by the blog to give some support for your loss of Doc Holiday. Looking at post titles my pointer was heading to the good-old x to escape what I saw as just another leftie when, whoa, what is that about being a R? Hmmm.
    So I took a bit of time to read about who you are and what you feel and, golly gee, me too!
    My views are a tad more to the R but what the heck, I read on.
    So
    Anyhow
    I do not agree with all you write, but, that is what it is all about, dialogue. Thanks for taking the time to post your feelings. I ran out of gas years ago and sit watching in disgust as the extremes throw their favorite gilt covered turds back and forth. We shall see what happens in the next few years but I feel the worst is yet to come. If the next cycle is a Vote for the Lesser of Evils I may not bother to add my vote.
    We shall see.

    Pete

  • SJ Reidhead says:

    Thanks! I still consider myself a Reagan Republican. I’m so ticked with what I see happening to the GOP, I just have at it now. There’s no use covering up for anyone or protecting them. I suspect we’re going to see the birth of a new party one of these days – for NORMAL people, like you and I. I also hear it’s coming sooner than later.

    Thanks for reading. I appreciate it. I also appreciate your comments. With luck, we’re going to have some good people running. I keep hoping.

    SJR


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