Tuesday, August 14, 2012

Hassett-Hubbard-Mankiw-Taylor piece issued by the Romney campaign

Although I have been off the Web, far more than on it, during this stage of my vacation in Costa Rica, I have been able to follow the controversy over the "HHMT" article, if that's the word for it, that the Romney campaign disseminated in support of their tax, economic, and budget policies.  Krugman and DeLong have stated it strongly, albeit in my view appropriately so.

Readers of this blog are unlikely to be surprised by my conclusion that this was not a good piece of work - although you really don't need my opinion, when the author of almost every article they cited has stated publicly that their citations were out of context at best, and if not unrelated then directly contrary to the conclusions that HHMT claimed could be drawn.

I happen to be on friendly terms with 2 of the 4 authors of HHMT - a third one I have exchanged emails with once or twice, and the fourth I don't know personally at all.  So there are some personal ties that I care about here.  I also generally have high respect for their academic work.

What disappoints me is that they appear to have made the judgment that the reputational cost of signing this piece (which falls below the standards they honor in their academic work) was worth bearing.  They are all grown-ups, and if all that was involved was the reputational hit versus the benefit they see to helping the Romney campaign and/or aiding the ultimate adoption of policies that they believe in and/or showing their loyalty, that is a call that (absent further effects) they are fully entitled to make.

But there is an externality problem here.  Their issuing the piece moves towards changing the acceptable standard for academics working in a campaign, and in quite a bad way.  It hurts academics' reputation over the long run, and it cheapens public discourse, by making it harder for people who are not in the know to figure out what the issues and accepted lines of plausible debate actually are.

In the 2008 presidential campaign, I criticized Doug Holtz-Eakin for occasionally making public statements, seemingly with his economist hat on, that he could not have believed were true, and that are better left to the hacks that every campaign inevitably employs.  (Oddly, he also frequently made very frank public statements that I wouldn't have blamed him for clamming up about instead.)  But he only crossed the line (as I see it) via statements to the press, often seemingly off the cuff, as distinct from via short papers with footnotes to the academic literature.

Here's hoping that HHMT conclude that it was a bridge too far this time, and that they should be more careful next time, both for personal reasons and principled ones.  They should keep in mind that principle is about more than furthering the adoption of your principles.

3 comments:

Stuart Levine said...

Dan: You state that "I criticized Doug Holtz-Eakin for occasionally making public statements, seemingly with his economist hat on, that he could not have believed were true, and that are better left to the hacks that every campaign inevitably employs."

Unfortunately, you seem to miss the point, a point that Krugman has made strongly. Holtz-Eakin and, now, the HHMT Group, have become hacks.

Yes, it is true that some or all of them may be highly competent and accomplished scholars. But they are using their hard-earned capital as scholars to camouflage their descent to becoming nothing more than partisan operatives.

Wells_10022 said...

Mr. Shaviro.

I like your blog. Very good.

My comment is not related to this particular post - but more to Romney's tax returns in general.

I have been reading your views regarding Romney's tax returns.

In your July 16 2012 post you mention that Romney had a net capital loss carryforward from 2009. You also mention "loss harvesting" in response to "the down 2009 stock market" ...

Just one problem - the stock market ***was not down*** in 2009.

Using the S&P 500 as the standard - the market was actually *up* 28%

The last trading day of 2008 - the S&P 500 Index was around 870.

The last trading day of 2009 - The S&P 500 Index was around 1125.

The other major indexes were up as well during this period.

The Dow was up about 23%

Nasdaq was up 50%

The Russell 2000 (which tracks smaller companies)was up over 30%

Gold was up about 25%

Questions:

Does the fact that there was not a down stock market in 2009 (in fact - just the opposite - actually quite a strong equity market in 2009) change your analysis?

Doesn't it make you wonder even more how Romney managed to lose so much money in 2009 when almost everything went up? If you use the etf symbol "DBC" as a proxy for the Commodity Index - it was up over 20% during this period.

The one thing that went down during this period was long dated U.S. Treasuries. I would find it interesting that a supposedly sophisticated guy like Romney would load up on the only major asset class that declined in value during this period.

Is it possble the losses came from short sales that went against him?

Claudio Timbers said...

Their issuing the piece moves towards changing the acceptable standard for academics working in a campaign, and in quite a bad way. It hurts academics' reputation over the long run, and it cheapens public discourse, by making it harder for people who are not in the know to figure out what the issues and accepted lines of plausible debate actually are. Reputation Marketing