As both of my regular readers (Hi Mom!) might have noticed , I tend to come down on a particular side of most policy debates. In part, that has to do with the way I see the world-- I'm instinctively skeptical of government intervention in the economy, but I'm not viscerally opposed to it, and I tend to think that selective, smart government intervention can play a role in improving social outcomes. But I like to think that I'm pretty open-minded: I like to read things from people who I'm likely to disagree with, just so that I can feel like I have a good sense of what the debate is, and can justify why I come down on a particular side. A lot of times, those bloggers make interesting, innovative arguments, and I learn from them (Bentley's Scott Sumner and George Mason's Tyler Cowen are two of my favorites in that category). Other times, the blogs, despite the author's academic credentials, are either thin on substance (Harvard's Greg Mankiw is the primary example; he mostly posts links, and when he does make arguments, they're... curious and frequently at odds with his academic research) or spend their time playing politics (Stanford's John Taylor is guilty of this one more than anyone else; he makes claims that are directly at odds with his own statements from a few years back, for what seems to be no better reason than that his political party has shifted to the right and his research bolsters Democratic positions).
But the most curious case is the University of Chicago's John Cochrane. Cochrane spends so much time twisting himself in circles to get to particular outcomes that he ends up making arguments that are either blatant contradictions or have logical implications that are entirely absurd. Which leads to bizarre posts like this one. The best thing you can say for Cochrane is that he doesn't close his eyes, plug his ears, and yell that up is down-- the austerity experiment in Greece is a proven failure, as austerity (predictably) reduces output, which depresses tax receipts, which means that hiking taxes and cutting spending isn't just bad for growth-- it's also bad for the budget. Cochrane acknowledges all this. But then he dismisses the notion, advanced in Brad DeLong and Larry Summers's recent paper, that, when the economy is in a liquidity trap (as the US presently is), expansionary fiscal policy can actually pay for itself (by stimulating growth enough to actually improve the fiscal situation. He then goes on to talk about structural reform, but that's neither here nor there.
What Cochrane's position implies is that, while we know austerity doesn't help the budget problems in Europe, it seems he thinks stimulus doesn't either. But we know that changes in fiscal policy have to have some effect on the budget picture; the deficit isn't going to stay at a constant level regardless of what changes government makes to taxes or spending (that's a pretty self-evident argument). The implication, then, is that, in purely budgetary terms, government spending, both in Greece and everywhere else in the world, is OPTIMAL. In other words, he's either making the patently absurd claim that it doesn't matter what kinds of taxing and spending decisions government makes, or the even more patently absurd claim that every government in the world has gotten its taxing and spending decision exactly right, and no changes can be made to improve that outcome.
And it's posts like these that convince me that I have the opinions I do for a reason...
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