I came across two articles recently that caught not just my attention but also my ire.\u00a0 They were excellent examples of what is wrong with much of the policy material that comes out of the \u2018dismal science\u2019.<\/p>\n
Simply put, the presentation of evidence and the offered arguments built on this evidence are too scant to be respectable.\u00a0 The conclusions reached are too certain with no countervailing opinions considered or addressed, except in passing.\u00a0 The tones of the articles are too much schoolyard \u2018see I told ya so\u2019 and too little of the scholastic \u2018let\u2019s weigh all sides and pick the best path, regardless of who is right.\u2019 Their logic is faulty and their argumentation depends on tautologies and equivocation rather than well-formed formulas required.\u00a0 In short, they are polemical opinion pieces better suited for a candidate running for office than they are serious pursuits of truth.\u00a0 And the validity of their conclusions is, shall we say, dismal.<\/p>\n
The first example is a recent article about economic inequality by Christine Lagarde, entitled Equality is key to global economic growth<\/a><\/em>.\u00a0\u00a0 Lagarde is currently the managing director of the International Monetary Fund (IMF).\u00a0 A lawyer by training, she has held a variety of economics-related roles, including as an antitrust and labor lawyer and as France\u2019s Trade Minister and Minister of Economic Affairs.\u00a0 So I had hopes that her article would offer a well-thought-out support of the position so concisely summarized in her title.<\/p>\n Instead, I found a fluff piece with numerous examples of equivocation.\u00a0 For instance, the third paragraph of the article reads:<\/p>\n <\/p>\n Surely a definition of \u2018excessive inequality\u2019 would be coming after such a lead-in.\u00a0 Does she mean wealth inequality, income inequality, or some other form of inequality?\u00a0 After all, the inequality between Warren Buffet and the average wage earner in the US is much smaller when considering their incomes versus net wealth.\u00a0 Buffet makes a comparatively small income (defined as wages and salaries) every year but resides over a vast fortune.<\/p>\n But alas no.\u00a0 Lagarde does say about inequality that:<\/p>\n <\/p>\n What kind of logic is being used in this sentence?\u00a0 It is almost certain that wealth inequality is a necessary by-product of economic activity.\u00a0 But where did income inequality creep in.\u00a0 And what is excessive inequality.\u00a0 At what value of the Gini Coefficient<\/a> does income inequality become excessive?\u00a0 And so what if there is income inequality; it doesn\u2019t mean anyone is poor.\u00a0 Both the players and owners in the National Football League are quite well-off, even though there is a distinct income inequality between the scant millions earned by the players versus the meatier hundreds of millions and billions earned by the owners.<\/p>\n Without any additional support, Lagarde then goes on to say that:<\/p>\n <\/p>\n How much faster and how much more sustainable is the growth \u2013 would 0.1 % be statistically significant?\u00a0 How little is little adverse effect on growth \u2013 would 20% be little?\u00a0 Sigh\u2026<\/p>\n Lagarde ends with this chestnut<\/p>\n <\/p>\n There is no rational statement in that sentence other than to say the \u2018excessive inequality\u2019 (still undefined) makes people say that they feel bad.<\/p>\n So much for Lagarde!<\/p>\n The next candidate in the bad logic hit parade is the article entitled Free Trade With China Wasn\u2019t Such a Great Idea for the U.S.<\/a><\/em> by Noah Smith. \u00a0Smith\u2019s bona fides tell us that he is an assistant professor of finance at Stony Brook University.\u00a0 So I had hoped for a well-reasoned discussion.\u00a0 But those hopes were soon dashed.<\/p>\n Smith is more subtle with his equivocation and, as a result, his misdirection is harder to spot.\u00a0 His starting position is that:<\/p>\n Nowhere is this evangelism clearer than on the issue of trade. Ask any economist what issue they agree on, and the first answer you\u2019re likely to hear is \u201cfree trade is good.\u201d\u00a0 The general public disagrees vehemently, but economists are almost unanimous on this point.<\/p><\/div>\n <\/p>\n These two paragraphs, examined closely, open all sorts of questions about Smith\u2019s positions.\u00a0 First, by his own rules, should we be regarding Smith as a preacher rather than a scientist, since he is talking in public?\u00a0 Second, is being a preacher bad or, perhaps, is Smith revealing both his ignorance and his bias when it comes to faith and science<\/a>?\u00a0 Anyway, let\u2019s leave these questions aside and focus on the question he would like us to focus on.\u00a0 Is free trade with China bad?<\/p>\n To support the premise of his title, Smith provides us with this little gem:<\/p>\n <\/p>\n Increased trade equals free trade? How many workers constitute many? Is 3% of the workforce many? And how many counter-examples are there on free trade? Would 10 papers out of 100,000 be enough to paint a 'very different picture'? I don't know the statistics and since Smith doesn't say how he defines free trade and what criteria he uses to say that the picture is different, I never will know. <\/p>\n Smith then argues that:<\/p>\n <\/p>\n My response is \u2013 so what?\u00a0 I feel for these people who have been hit hard and have not recovered.\u00a0 Collectively, we as a nation should do something, and individually, me as a person should do (and am actually doing) something.\u00a0 But where is the evidence that free trade is the culprit?<\/p>\n How do I know that some economists or lawyers or professors of finance haven\u2019t rigged the trading with China to favor themselves?\u00a0 After all, income inequality (or is it wealth inequality) has to come from somewhere.\u00a0 Or maybe government policy has left trade unfettered but has prevented these displaced persons from finding other jobs. Perhaps welfare and unemployment benefits are perversely constructed so that the displaced worker has no incentives or options to support himself while he looks or trains for new jobs.\u00a0 Perhaps, in an imperfect world, the benefits to society as a whole far outweigh the localized losses, as painful as they may be.<\/p>\n There are lots of questions and no forthcoming answers because Smith avoids examining these questions entirely.\u00a0 He seems to simply want to inflame the passions of a populist subject.\u00a0 Just the kind of behavior I would expect to see from a fly-by-night preacher.<\/p>\n So let me close by saying that one should stay on one\u2019s toes when reading articles that pass for economics but are really politics.\u00a0 When the author argues without defining terms, without presenting quantitative evidence, and with liberal shortcuts through logic, the article probably isn\u2019t worth one\u2019s time.<\/p>\n","protected":false},"excerpt":{"rendered":"