Idiotic economists for Romney

Here is the text of an e-mail I got today (actually, the second time I received it):

Dear Fellow Economist,

We are asking you to join us and other economists by signing on to the “Statement by Economists in Support of Governor Mitt Romney.”

More than 500 economists have already signed the statement, including:
Gary Becker
Robert Lucas
Robert Mundell
Edward Prescott
Myron Scholes
Michael Boskin
John Cochrane
John Cogan
Kathleen Cooper
Steven Davis
Martin Eichenbaum
Martin Feldstein
Bob Grady
Phil Gramm
Kevin Hassett
Douglas Holtz-Eakin
Marie-Josée Kravis
Anne Krueger
Arthur Laffer
Edward Lazear
Allan Meltzer
Greg Mankiw
Tim Muris
June O’Neill
Harvey Rosen
Paul Rubin
George Shultz
John Taylor
Robert Zoellick

If you would like to join us by also signing on to this statement, please reply to this e-mail…[…]

Statement by Economists in Support of Governor Mitt Romney

We enthusiastically endorse Governor Mitt Romney’s economic plan to create jobs and restore economic growth while returning America to its tradition of economic freedom. The plan is based on proven principles: a more contained and less intrusive federal government, a greater reliance on the private sector, a broad expansion of opportunity without government favors for special interests, and respect for the rule of law including the decision-making authority of states and localities. Applying these principles, Governor Romney would:

  • Reduce marginal tax rates on business and wage incomes and broaden the tax base to increase investment, jobs, and living standards.
  • End the exploding federal debt by controlling the growth of spending so federal spending does not exceed 20 percent of the economy.
  • Restructure regulation to end “too big to fail,” improve credit availability to entrepreneurs and small businesses, and increase regulatory accountability, and ensure that all regulations pass rigorous benefit-cost tests.
  • Improve our Social Security and Medicare programs by reducing their growth to sustainable levels, ensuring their viability over the long term, and protecting those in or near retirement.
  • Reform our healthcare system to harness market forces and thereby reduce costs and increase quality, empowering patients and doctors, rather than the federal bureaucracy.
  • Promote energy policies that increase domestic production, enlarge the use of all western hemisphere resources, encourage the use of new technologies, end wasteful subsidies, and rely more on market forces and less on government planners.

In stark contrast, President Obama has failed to advance policies that promote economic and job growth, focusing instead on increasing the size and scope of the federal government, which increases the debt, requires large tax increases, and burdens business with many new financial and health care regulations. The result is an anemic economic recovery and high unemployment. His future plans are to double down on the failed policies, which will only prolong slow growth and high unemployment.  President Obama has:

  • Relied on short-term “stimulus” programs, which provided little sustainable lift to the economy, and enacted and proposed significant tax increases for all Americans.
  • Offered no plan to reduce federal spending and stop the growth of the debt-to-GDP ratio.
  • Failed to propose Social Security reform and offered a Medicare proposal that relies on a panel of bureaucrats to set prices, quantities, and qualities of healthcare services.
  • Favored a large expansion of economic regulation across many sectors, with little regard for proper cost-benefit analysis and with a disturbing degree of favoritism toward special interests.
  • Enacted health care legislation that centralizes health care decisions and increases the power of the federal bureaucracy to impose one-size-fits-all solutions on patients and doctors, and creates greater incentives for waste.
  • Favored expansion of one-size-fits-all federal rulemaking, with an erosion of the ability of state and local governments to make decisions appropriate for their particular circumstances.

In sum, Governor Romney’s economic plan is far superior for creating economic growth and jobs than the actions and interventions President Obama has taken or plans to take in the future. This November, voters will make a fundamental choice between differing visions of America’s economic future.

[end of e-mail]

Here is my response:

You all sent me one e-mail, and I treated is as spam; for this second one, I’m going to tell you what I think. You people are high as kites. The propagators of this e-mail don’t know much about economics, and the signatories come across as hapless academic rubes who must not have read what they signed. A successful capitalist economy takes government oversight…do you forget 2007 and 2008? IDIOTIC! I’m not saying Obama has done a perfect job…but he (and Bernanke) are trying to strike a good balance. The stimulus was needed…and may not have been enough.

And here’s some basic micro for you: increased productivity comes about from (among other things, but largely) increased specialization (facilitated by ever more complex technology)…that requires increased coordination; as a result transactions (rather than transformation, aka production) become relatively more important in an advanced economy…yes, a lot of those lawyers are actually doing something useful. And transactions require government to provide the right institutional framework…so government gets bigger! I’m not a big fan of it, I don’t like big government…but there is quite a bit of logic to it. I voted for Reagan, twice…but this is not Reagan’s economy!

The attacks you make are simplistic; good economists understand complexity and don’t go out on a limb with simple claims; the economists who signed this statement are the type who are too in love with their precious (Chicago) models, and are an embarrassment to the profession (assuming they really did sign…perhaps this is just some scam).

Davis Taylor, PhD
Professor of Economics
College of the Atlantic

Grasshopper: How is the bay and the islands in the photo above related to the topics of this blog?

This is a new blog. I haven’t quite figured out what is going to be in posts, what is going to be in pages. Right now, just about everything is in pages, accessed by the menu of links above. Have fun exploring.