August 11, 2012
Representative Paul Ryan's Economic Weltanschauung
Recapping my analyses of his budgetary and macroeconomic views, including supply side, interest and inflation rates, and command of economic history.
Budgeting and Macro Responses
- "Assume a can opener"
- "Heritage Breaks Internet Silence on Its Ryan Plan Simulations (w/o a single number!)"
- "More on the Characteristics of the Heritage Foundation CDA Analysis of the Ryan Plan"
- "Implied Supply Side Elasticities from the Heritage CDA Simulations"
- "Representative Ryan's Roadmap: Interesting Implied Macro Impacts"
Inflation and Interest Rates
- "Crowding Out Watch: July 2012"
- "High Inflation at the Gates?"
- "Looking Forward in the New Year: Crowding Out and Hyper-Inflation Watch"
- "Core, and More, Near Zero"
- "Inflation Fears and Measures of Expected Inflation"
Posted by Menzie Chinn at August 11, 2012 09:03 AMdigg this | reddit
I had no idea that there could be that much misinformation about Ryan in one place. Where to begin? Rather than take it on directly, perhaps we should ask a simpler question: Compared to what?
The current Vice President told Katie Couric that when the stock market crashed, Roosevelt went on tv to calm the public. Except the stock market crashed in 1929 and Roosevelt didn't become President until 1933. And virtually no one had a tv at that time. The tv was introduced to the general public in 1939. Here's a funny video that documents the current Vice President's command of economic history.
Watch that video and then think honestly about Biden's and Ryan's knowledge of economic history. What do you think is going to happen in the VP debate? Who is more qualified to be VP?
Ryan's selection is fantastic news. Now if only we can get Lazear to sign up for another tour of duty.
Posted by: Rick Stryker at August 11, 2012 12:54 PM
I appreciate your analyses. Can you score Obama's budget for us? ;)
How about some political strategy?
I think the right just tossed a softball into Obama's sweet spot. They served up a record that can be disected and 'massaged' to fit the left's narrative.
I think the optimal strategy is to energize the base, i.e., get an additional 5% - 10% to the polls that will swamp the 5% who will vote, but have yet to select a candidate.
If you assume that the pro-Ryan folks would have voted for Romeny anyway, but Ryan incents some non-voting left to vote for Obama (e.g., throw granny off the cliff), then Ryan is a net gain for Obama.
I would have preferred a milk-toast candidate that would not have given the left an incentive to vote.
I guess strategy, economic or political, is something the right has yet to master.
Posted by: tj at August 11, 2012 02:39 PM
Rick Stryker Watch that video and then think honestly about Biden's and Ryan's knowledge of economic history.
I don't know if that kind of knowledge of economic history is terribly important for a Veep. I'm pretty sure that I know more economic history than either one of them. Does that mean Romney should have asked me to be his Veep choice? What matters is the kind of people you trust for economic advice. Biden trusted Jared Bernstein. Ryan trusts a couple of corrupt economists/lobbiests who like to buy him $350 bottles of wine. Ryan knows just enough economics to think that he knows more than he does. In that regard he's very sophomoric. He's in love with the idea of economics, but I don't think he really understands it in an intuitive way. And his budget proposals somehow manage to be both naive and dishonest.
tj Ryan incents some non-voting left to vote for Obama (e.g., throw granny off the cliff)
I'm sure that's how the Obama folks will try and sell it; but that's not actually what the Ryan plan does. Today's granny will be fine because the Ryan plan only affects those under age 55. It's those in their late 40s or early 50s that will really get screwed by the Ryan plan. All those Medicare taxes that they have been paying into every paycheck since they were 16 working at McDonald's will be entirely confiscated by Team Romney in order to pay for the income tax cuts. If you're 45 years old, then Romney will give you a voucher worth $3600 the day you turn 67. Somehow you will have to find health insurance for $300/month. And the value of that voucher will go down every year. So think about all those years you worked contributing to Medicare and you will get a voucher worth $3600 dollars. Good luck with that. It's not granny that should be angry about the Ryan pick, it's those working class voters in their 40s and 50s.
Posted by: 2slugbaits at August 11, 2012 03:58 PM
I'm glad this is the choice. It makes very clear what the choice is. No more hiding it: Medicaid is gutted, Medicare is turned into something completely different (and much worse). BTW, given my age, I'm not affected by the Ryan dismembering of Medicare.
As for the tax plan, I keep talking to people who tell me Romney will do something "reasonable". They can't believe this is the actual plan because they can't believe anyone would act on this degree of nonsense. Guess what? This is the plan. This is the plan they are running on. Of course the Ryan plan didn't balance the budget for decades but this is the plan.
Posted by: jonathan at August 11, 2012 07:37 PM
jonathan BTW, given my age, I'm not affected by the Ryan dismembering of Medicare.
But some folks who won't be affected by the dismembering of Medicare might very well be affected by the gutting of Medicaid. That's because two-thirds of Medicaid recipients are over 65 and unable to afford the Medicare Part B costs. Under the Ryan plan the gutting of Medicaid is immediate. The great myth about Medicaid is that it's primarily a program for poor minorities. Most of Medicaid goes to granny. Not really a surprise when you consider that the average Social Security benefit is only $13K/year.
Couple the Medicare and Medicaid guttings with Romney's pledge to abolish Obamacare and we start to look like pre-LBJ era Mississippi. Now top that off with eliminating capital gains taxes (Ryan's plan), lowering the top marginal income tax rate, increasing defense spending and a ballooning debt-to-GDP ratio. Now we start to look like one of those old Latin American banana republics run by a bunch of oligarchs. That's the real Ryan vision.
Posted by: 2slugbaits at August 12, 2012 06:33 AM
Menzie has given us a great plan to continue the past 5 years indefinitely into the future a la Japan. If you loved the past 5 years you will love Menzie's plan of action. If you would rather return to the 1980s and 90s, Romney-Ryan is the alternative.
Posted by: Ricardo at August 12, 2012 07:00 AM
2slug, I only meant I have no immediate stake. My take on Medicare alone is this: if we switch to vouchers, the entire program will fall apart and current and near current seniors, including me, would run into significant medical expense problems.
I consider the idea of vouchers for old people to be one of the cruelest ideas advanced. My mother is not capable of managing her affairs as is. My mother-in-law is in somewhat better condition but she would be overwhelmed if she had to deal with insurers, either shopping for insurance or handling rejection of claims, demands for payment, etc. Heck, I had a problem this week dealing with a large bill for endoscopy which had been processed wrong.
As for gutting Medicaid by turning it into block grants, that's a terrific way to drive hospitals out of business. I've noted before that in CA alone hospitals say they're out $11-12B a year in unpaid care. That will go up. Bad for business, bad for people, bad for old people and the young and disabled.
Note that Jim Hamilton has a piece up on this site about Japan's future potential bond yields perhaps rising in the future. Note then that the Ryan budget doesn't balance until the year 2040 or so, which is way, way past the point which that piece refers to as "soon" for rising rates. Why does the Ryan plan wait so long? Massive tax cuts, mostly for the better off.
Posted by: jonathan at August 12, 2012 08:02 AM
I can't wait for the Rmoney team to defend Ryan's voucher-izing of Medicare. Apparently, if you're over 65 and buying health insurance through a government funded voucher, that's very American. But if you're under 65 and buying health insurance through a government funded voucher, that's Socialism through Obamacare. The big difference of course is that the Ryan plan will fund tax cuts for the long-suffering 1 percenters while Obamacare causes the Romney's wealthy friends to 'suffer' by seeing poor people get healthcare.
Posted by: Gridlock at August 12, 2012 09:18 AM
One thing you can't accuse him of is not using fiscal policy and deficits to fight the depression, but the policy approach is Bush on steroids - depression? you don't know what a depression really looks like until we get done.
Posted by: Lord at August 12, 2012 01:17 PM
You said: "What matters is the kind of people you trust for economic advice. Biden trusted Jared Bernstein. Ryan trusts a couple of corrupt economists/lobbiests who like to buy him $350 bottles of wine."
No wonder Bidne doesn't know basic facts about economic history, if he's being briefed by Bernstein. Bernstein has no degree in economics, neither undergraduate or graduate. He has a PhD in social work.
Biden doesn't know how the internet works either. He thinks that web pages have phone numbers.
Maybe his internet advisor has a PhD in anthropology.
In contrast, Ryan's companions at the dinner you reference are economists, and serious ones at that. According to reports, one of Ryan's dinner partners was Cliff Asness, a PhD in Finance who has maintained a research program and publication record in portfolio theory while pursuing a distinguished career in finance. His other dinner partner was John Cochrane, professor at Chicago Booth, who specializes in macro and financial economics. Ryan also gets advice from John Taylor, professor of economics at Stanford. Ryan has co-written a WSJ editorial with Taylor.
Posted by: Rick Stryker at August 12, 2012 07:12 PM
well Jindal, R. La. gov., refuses to take ACA money and the public hospitals are set for either cuts or sale. the Poor, oh well, they have better hurry up and die. Jindal already closed teh mental health hospitals here in the New Orleans area. We already know how Ryan's plan will work out. the Rich folks love it. the middle class are beginning to see how it works out. the working Middle Class people are the ones affected by the mental health issues. after doing the Republican "dance" for the 1% in Red states, we see how "well" closing hospitals affects us all. Just think, all the Southern states can refuse ACA and lower their parts in Medicare/Medicaid through block grants to "private" supplies. how well the Market forces work, just amazing how "efficient" at "handling" the poor and indigent/no money, no health care. No problem.
Ryans' plans and economics work well for the Rich, the rest of us, not so well.
and Biden is, well, inarticulate compared to Ryan.. wait til the Ryan smooth talking BS comes and blows Biden out of the water. these Republicans aren't stupid. or inarticulate. watching the Republicans sell the "Trickle Down Economics" just proves the better liar is the better thief. Biden vs Ryan will be a wash out for Obama.
Obama had better take the lead or he will be "whitewashed" to use a colorful phrase. lol
Americans love good BSers over nasty cold hard facts. that's why they watch Faux News and re-elect Republicans.
Delivery, Delivery,Delivery is all it takes.
Posted by: Bernar at August 12, 2012 07:34 PM
Jonathan is correct. The Ryan plan will not affect his Medicare, but the Obama cuts to medicare will. Obama has virtually gutted medicare to shift funds to those who fall into the uninsured bucket.
Medicare resources under the Ryan plan will be saved for those in retirement or near retirement in order to restructure Medicare to save it. The Obama plan that is already law and will take significant resources out of an already bankrupt Medicare. If nothing is done the Obama disaster will take effect in 18 months and will starve Medicare, causing severe cuts to Medicare service, all to fund government insurance for those in their healthiest years and their most productive years when they can afford their own health care. Ryan's plan is to save Medicare while Obama's plan is to buy the youth vote by killing the elderly.
This is a Democrat talking point that is more than a TV commercial. Obamacare will actually euthanize seniors expressed as in its cost containment provisions.
Posted by: Ricardo at August 13, 2012 05:37 AM
I have been enjoying this campaign but now it appears that it will be even better. A candidate who can't put a coherent thought together without a teleprompter against a candidate who has been measurably successful in very volatile environments that take quick thinking. I wonder who will win that exchange?
Then you have a mental midget who exposes his ignorance every time he opens his mouth against a candidate who knows the budget and the ins and outs of government finance better than anyone in our country. That is simply not a fair fight.
Posted by: Ricardo at August 13, 2012 05:53 AM
Reading the comment threads of those 2010 articles about inflation is a hysterical exercise.
Posted by: Nick at August 13, 2012 06:07 AM
Well, well I see the Ryan defenders have made their early visits.
Let me be unequivocal as possible about this--Ryan is a complete and utter fraud; his policies, if adopted, would force upon this country a New Feudalism rooted in abject plutocracy.
First, Ryan's deficit-cutting plan, because of its inclusion of massive tax cuts, doesn't even eliminate the deficit for nearly 30 years. His own document indicates that there would be a deficit of $287 billion in FY2022, and the CBO estimates that it wouldn't produce a surplus until 2040.
Second, the short-term deficit-cutting that Ryan indicates would come about through the systematic defunding of programs aimed at aiding low-income individuals. At least 62 percent of its $5.3 trillion in non-defense cuts over ten years would come from Medicaid, SNAP, Pell Grants, and similar programs.
Third, Ryan has already backed off any call from reductions in defense spending as outlined in Simpson-Bowles and instead would increase defense spending by over 5% above the Budget Control Act caps.
Fourth, the mathematics of the Ryan Pathway to Penury would force the federal government to shed all functions save defense, veterans, interest on the debt, homeland security, Medicare and Social Security by 2050. Everything else has to go to in order for Ryan's math to work.
Sixth, Ryan's predictions about inflation, interest rates, and the value of the dollar are notable only in their four-year record of abject inaccuracy. Search the press releases and articles in Ryan's own web site and you will find dark predictions of imminent hyperinflation, zooming interest rates, and a crash in the value of the dollar beginning in March of 2008 and continuing on a regular six-month interval until just recently. Had Ryan been in charge of a bond fund, his investors would have bolted long, long ago. His press releases regarding inflation are one of my best investment contra-indicators.
In short, his plan is a mere subterfuge, a smoke screen for further massive tax cuts for the wealthy. But instead of funding them through the Magic of the Free Market, he is explicit in funding them through a combination of raising taxes on low-income individuals, and savage cuts to social programs.
Posted by: Dr. Morbius at August 13, 2012 07:09 AM
And now for Medicare.
The Ryan Plan will destroy Medicare and replace it with an expensive two-tier system of insurance obtained in the private market and a poorly funded public high-risk pool for those rejected or dumped by private insurers for cost reasons. The "coupon" that Ryan will provide as premium support will essentially split the cost of medical care for most seniors, with the CBO estimating that at present rates of increase, this will result in a $16,000 - $20,000 out of pocket annual expense for seniors within 20 years. (And since Medicaid will be capped as a block grant program its usefulness will decrease dramatically over time as the Baby Boom Generation swells the ranks of the indigent elderly)
While Ryan promises that nothing will happen to current Medicare recipients and those over 55, the mathematics of his system ensures that eventually this remnant population will be forced to accept dramatic future cuts. Since, according to his own plan descriptions, insurance companies will be able to reject applicants, the sickest, most expensive risks will be forced into the high-risk pool of Medicare undermining that plan's finances as more and more high-expense recipients are forced into the program.
Also, the meager Coupon that Ryan promises will drive many to enroll in mini-medical plans that will fall far short on coverage for expensive diseases or extended hospital care.
In short, Ryan's Plan is a godsend for the insurance industry and a sentence of premature death for most seniors. Hardly a maintenance of the Medicare System as we know it.
Posted by: Dr. Morbius at August 13, 2012 07:45 AM
Thanks for stopping by Dr. Mobius!
As it happens I am 53 - so just in time for the Romney/Ryan (Ryan/Romney?) Medicare plan. If it passes I will be living next door to someone a year older, they will have full medicare, and I will have a voucher that only covers a portion of that?
Does anyone in their right mind think this is actually going to happen? Of course it won't. So the whole exercise is a bait-and-switch fraud to lower tax rates on the wealthiest Americans still further for another 10 years. Meanwhile the budget is exploded by unchecked Medicare spending, more Defense increases, and massive tax cuts.
If you care even a tiny little bit about the budget deficit, you won't be voting Romney/Ryan.
Posted by: randomworker at August 13, 2012 08:46 AM
You will not get a voucher. A voucher, gets you something for free (i.e. I have a voucher for a free airline ticket, I have a voucher for a free hotel room, etc.). Please see the history of its derivation from the Italian.
You will, however, get a coupon. A coupon is a discount towards to the purchase of something (i.e. a $1.00 off, a coupon for one free item when you buy two).
The concepts are sometimes combined--for commercial purposes: a coupon for a free box of cereal; and for political purposes: a school voucher good for $xxxx.xx.
But in the combination cases the purposes is for appearances only. A voucher for a box of cereal sounds too complicated, a coupon for school tuition sounds too negative.
Posted by: Dr. Morbius at August 13, 2012 10:15 AM
"If you care even a tiny little bit about the budget deficit, you won't be voting Romney/Ryan."
That's comedy gold.
Posted by: Rich Berger at August 13, 2012 10:29 AM
Thanks for the rehash of the Ryan plan, unfortunately for you, Romney has made it clear he is not runnnig on the Ryan plan. The choice of Ryan is clearly differentiate the policies:
Obama's centralized cradle to grave welfare state with trillion+ deficits vs slower growth in government spending accompanied by more rapid GDP (hence tax revenue) growth.
Morbius you cite balances out to 2040 for Ryan's plan, can you cite balances out to 2040 for Romney and Obama plans? That is the relevant comparison. It should be fairly straightforward to take Obama's 2012 budget and calculate the... ooops, no budget. Never mind.
Posted by: tj at August 13, 2012 11:36 AM
tj: OK, I guess previous statements have been rendered "no longer operative".
Posted by: Menzie Chinn at August 13, 2012 12:02 PM
That article is typical of left wing lap-dog bias - They dismiss the most relevant facts, (like the most recent comments) then emphasize old news or twist the facts to suit their false narrative.
In the left's version of the election, it's superhero Obama vs 2 murderers (Romeny for causing a woman's cancer and Ryan for pushing granny off the cliff.)
You need read no further than the first 2 paragraphs you cite to find the most recent and relevant facts-
his (Romney) campaign was working to distancing(sic) itself from Ryan’s signature piece of legislation ...
as president he will be putting together his own plan for cutting the deficit and putting the budget on a path to balance
In the meantime, the 2008 candidate Obama who promised to unite America has created numerous "wars" as president:
War on Women - Obama says Republicans will take away womens' contraception even though the existing policy did not prohibit women from buying contraceptives for a few dollars each month.
War on Religion - Obama forces Catholic charities and business owners to provide birth control to employees.
War on the Young - Obamacare forces the young to subsidize the sick and elderly by forcing them to buy health insurance.
Class warfare - frames the tax debate as 1% vs 99% when taxing the 1% would not come close to solving the budget issue.
Those are certainly issues worthy of debate, but the divisive rhetoric as president is at odds with candidate Obama's promises.
The list goes on...
Posted by: tj at August 13, 2012 02:11 PM
tj: Sorry, I didn't see the place where you show the quotes are manufactured or out of context. Wouldn't that be the most important thing to deal with?
I hope for the sake of your health, you stop hyperventilating. And I am happy that contraception and OB/GYN care seems to cost you so little.
Posted by: Menzie Chinn at August 13, 2012 02:24 PM
tj taxing the 1% would not come close to solving the budget issue.
It may not be a sufficient condition, but taxing the top 1% sure as hell is a necessary condition.
his (Romney) campaign was working to distancing(sic) itself from Ryan’s signature piece of legislation ...
as president he will be putting together his own plan for cutting the deficit and putting the budget on a path to balance
Why the future tense? This seems to concede the point that as of right now Romney doesn't have a plan of his own. Don't you think Romney's supporters (both of them) would have liked to have known that Romney hasn't yet developed a plan?
Obamacare forces the young to subsidize the sick and elderly by forcing them to buy health insurance.
So does Romneycare. In fact, so does Ryancare. Under Ryan's plan those Medicare taxes will still be on the books...it's just that those under 55 won't get any of the benenfits. Instead they'll get a voucher worth (at most) $4,176...and it just goes down from there every year.
Romeny for causing a woman's cancer
Didn't Romney's spokesperson concede that she would have gotten coverage if she had lived in Massachusetts under Romneycare? And didn't Romney pledge to abolish the national version of Romneycare? Ergo, under a President Romney the woman would have died. I think that's the real issue.
Ricardo Jonathan is correct. The Ryan plan will not affect his Medicare, but the Obama cuts to medicare will.
Jonathan is mostly correct. The Ryan plan would not only gut Medicaid (which primarily serves the elderly), it would also eliminate the "donut hole" fix. That seemed to be a big issue with seniors just a few years ago.
Obamacare will actually euthanize seniors expressed as in its cost containment provisions.
Instead of just tossing out absurd nonsense just to hear your keyboard click, why don't you spend some time at a pediatric intensive care unit and talk to some parents agonize over how they're going to pay the bill. Then go back and feel sorry for yourself because Obamacare won't pay for useless, ineffective and expensive procedures to keep your sorry ass in some braindead coma for another 3 weeks. Your concern about Obamacare "euthanizing" seniors is touching, but you don't seem to give a damn about any other group. I think your moral compass needs recalibrating.
Posted by: 2slugbaits at August 13, 2012 03:09 PM
As usual, Menzie can't counter the points that expose the flaws in his memorized beliefs.
For example, when Prof. Mark Perry (substantially higher up on the econoprof blogger ladder than Menzie Chinn) pointed out how global warming believers (such as Menzie) are treating their views as more of a religious doctrine than solid science...
Menzie had no response. Menzie just said something irrelevant in order to create cover for him to run and hide.
Again, Mark Perry is not just anybody, but an Econ Prof who is much higher up in the econoblogger hierarchy than Menzie Chinn.
Menzie is doing the same thing here in response to those who point out that he is a leftist first, and an economist second...
Posted by: Darren at August 13, 2012 04:41 PM
Tax rates on the highest-income Americans already rose 3.8% under Obamacare.
So why is there still a debate about raising them further? They have already been raised.
This even puts aside that 'wealthy' has to be defined based on net worth, not income. Many high-income people are at the very start of their earnings and not yet 'wealthy'.
Posted by: Darren at August 13, 2012 04:42 PM
Darren FYI. Prof. Mark Perry is not an economist. He is a professor of finance in the business school. If you look at the school's departments the econ department is part of the college of liberal arts, not the business college. That's how it is at many schools. There's nothing wrong with being a finance professor, but it's really a very different discipline. Back surgeons and chiropracters both call themselves doctors and they both work with the spine, but they are very different.
Rick Stryker Similar comment regarding Prof. Asness. And Prof. Cochrane (like Eugene Fama and Casey Mulligan) might like to think he's a macro guy, but he's really nothing more than a glorified finance prof. Nothing wrong with that. It can be an honest living as long as they know their place in the great scheme of things. And in case you haven't noticed, finance prof's have more or less embarrassed themselves the last couple of years.
BTW, what finance prof would think it's wise to buy two $350 bottles of wine? And if they believe in declining marginal benefits, then shouldn't the second bottle have been a step down?
Posted by: 2slugbaits at August 13, 2012 05:52 PM
You used the same slight of hand as the article. Ignore the most recent and applicable comments, then dredge up older comments that no longer apply.
I don't think any Obama groupies should be critical of Romney's plan when Obama hasn't passed a budget since taking office.
Also, the woman moved to another job with health insurance before she was diagnosed with cancer and died.
What's Obama's plan to fix Medicare? Take $500++Billion to fund Obamacare? Where is the plan to save it?
All I see are Romeny attacks. I don't see any Obama solutions, other than raise taxes on the "rich" and fight his various wars cited above. We have tried Obama's brand of big government and it doesn't work.
Posted by: tj at August 13, 2012 06:17 PM
tj: I see. Indeed it is the Ron Ziegler defense. Thanks for the clarification.
Posted by: Menzie Chinn at August 13, 2012 08:41 PM
tj is right that people need to talk about Romney's plan. And he's also right that the Think Progress article Menzie referenced is just biased left-wing blather.
Here's what the question and answer from Romney's talking points said:
"1) Does this mean Mitt Romney is adopting the Paul Ryan plan?
Gov. Romney applauds Paul Ryan for going in the right direction with his budget,
and as president he will be putting together his own plan for cutting the deficit and putting the budget on a path to balance."
The straightforward interpretation of this answer is that Romney is at the top of the ticket and will be determining the details of the plan. But
here's how the Think Progress article characterizes that answer:
"his campaign was working to distance itself from Ryan’s signature piece of legislation" and
"In internal talking points that are sure to disappoint conservatives, Romney’s campaign weaseled around fully embracing Ryan’s plan"
The article then goes on to accuse Romney of hypocrisy since he has praised the plan in the past, concluding
"Now that Romney is distancing himself from the proposal, it will be interesting to know which parts of Ryan’s budget he disagrees with."
Naturally, this biased and mendacious article concludes by implying deception on the part of Romney, as if we can't know what Romney really believes. But of course the authors of Think Progress article could easily have found out if they wanted to since both Romney and Ryan have made clear public statements about what they support.
Let's take Medicare for example, since a number of commenters have brought it up. Ryan's views, published on March 20, 2012 in the Fiscal 2013 version of "The Path to Prosperity" can be found here:
On page 52, you can find the Medicare proposal as premium support system, with private options and the traditional Medicare option. Note that contrary to Dr. Morbius's false assertions, insurance companies will not be able to reject applicants. Now, let's look at the Romney plan for Medicare, available here:
Note that it's essentially the same plan.
You can compare along different dimensions and although some of the details are different, Romney's and Ryan's policies are very similar. For example, both want tax revenues to be about 20 percent of GDP in the long run and both want marginal tax rate cuts. However, the details are different: Romney wants an across the board 20% reduction while Ryan wants tax cuts and simplification to 2 rates: 10% and 25%.
If you compare Romney's policies as explained on his website to the "Path to Prosperity," it's striking how similar the policies are. Romney is the top of the ticket and gets to choose the details, but conservatives could be happy with either plan.
That Think Progress article couldn't be more misleading.
Posted by: Rick Stryker at August 13, 2012 08:42 PM
Rick Stryker: But, once again, neither of you have disputed the correctness of those quotes. Are they manufactured, or are they correct?
Posted by: Menzie Chinn at August 13, 2012 08:48 PM
They are correct quotes used by the authors of the Think Progress article to imply that Romney has disavowed the Ryan plan. But Romney did no such thing as a comparison of the Romney web site and the Ryan document shows. The authors of the article should have and could have checked.
Posted by: Rick Stryker at August 13, 2012 09:13 PM
I understand that you are trying to divert attention from the embarrassing revelation that you didn't realize that Bernstein, formerly Biden's chief economist, is not really an economist. But your attempted diversion is even more embarrassing for you.
Apparently you don't realize that economists who work in business schools are not all finance professors. For example, Austan Goolsbee, who was Chairman of The Council of Economic Advisors under Obama is a professor of economics at Chicago Booth just as Cochrane is. Goolsbee does research in tax and industrial policy. Cochrane focuses on asset pricing, macro, and time series econometrics. Here's another example that readers of this blog will recognize: When Ed Lazear was on the faculty of the UChicago business school, he did research in labor economics. He's now at Stanford Business School.
You've certainly embarrassed yourself again but I must confess I don't know what finance professors have done that embarrasses them. I suspect you are bringing up the canard that finance professors who believed in the efficient markets hypothesis also believed that the financial crisis couldn't happen and therefore encouraged "market fundamentalism."
Posted by: Rick Stryker at August 14, 2012 11:38 AM
I thought that 2sb is the official arbiter of what is true and who is qualified to opine.
Keep up the good work.
Posted by: Rich Berger at August 14, 2012 12:04 PM
Rick Stryker Some schools have one large econ department that includes both finance and conventional economics (e.g., micro, macro, econometrics, international, etc.). Some schools put traditional economics in the college of liberal arts and they put finance in the business school alongside accounting, marketing and administration. Prof. Mark Perry's school does the latter. It usually signifies a different emphasis on the kind of finance being taught.
As to Jared Bernstein, I put him in the same category as Robert Reich or a number of economists who teach economics but didn't get their Ph.D's in economics. One of the best economics teachers I ever had won a Nobel Prize in economics but didn't have a Ph.D in it. His only formal economics training was as a minor while an undergraduate. For that matter a lot of University of Chicago guys did most of their work in mathematics and picked up economics on the side. The point is that Bernstein understands macro better than Ryan's drinking buddies, although Bernstein may not be as familiar with the wine list.
As to finance professors embarrassing themselves, let's start with all those dire predictions of inflation that never happened. Or take a look at John Taylor's recent knee-slapper where he tries to pretend that he didn't misrepresent the conclusions of several studies by referencing studies that weren't part of the charge. And then apparently unwilling to directly lie about GDP growth during 2009 & 2010 he outsources the dirty work to some clueless poser at AEI. The AEI "analysis" is completely clueless since the author seems to believe that the ARRA stimulus package became effective on 1 Jan 2009 (while Bush was still President!!!).
Posted by: 2slugbaits at August 14, 2012 02:34 PM