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Six economists and the New York Times

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Six economists and the New York Times

The New York Times put in place a pay wall to generate new revenues to partially offset the newspaper’s declining ad revenues. While I do not believe that this is the answer to the broken business model of this and most every other newspaper, the New York Times has to offer compelling proprietary content in order to attract subscribers. Such content is produced by the newspaper’s stable of writers.

In the January 1 edition of the paper, six prominent economists, who write the Economic View column in the Sunday Times, were asked to do a “little blue-sky thinking” about key issues in 2012. If their ideas are indicative of the value they bring to the table with their regular columns, then there is not much to entice anyone to pay for their content. Furthermore, their contributions this past Sunday reinforce the skepticism most people have about the ability of economists to contribute anything of relevance to policy debates. Indeed, after I read each of their “blue-sky thinking”, I realized why the state of economic policy advice is in such bad shape. Combine weak advice with dysfunctional political systems and you get the economic turmoil and uncertainty that have engulfed the US and the EU this past year.

Only two of the six actually provided some policy advice. Christina Romer, the former Chair of President Obama’s Council of Economic Advisors, recommended that the federal government provide state and local governments with a lot of money for investments in infrastructure, job training, education and research. Robert Shiller, a professor of economics and finance at Yale, recommended replacing mortgage interest rate deductibility with a refundable tax credit as a percentage of mortgage interest rate payments. Both ideas have much to commend them.

The other four obviously lost their ways in the blue sky. Greg Mankiw, an economics professor at Harvard, answered his question “What can we do to get the economy going?” by ruminating about what the Federal Reserve should do some time in the future. His best line was “Unfortunately, economists don’t offer simple and unequivocal advice.” I would like to have seen the look on Mitt Romney’s face when he was told this by Mankiw. By the way. Mankiw is an advisor to Mr. Romney.

Tyler Cowen, a professor of economics at George Mason University, talked about the crisis in the EU without saying anything new or useful. Richard Thaler, an economics professor at the Booth School of Business at the University of Chicago, demonstrated why there will be limited scope for behavioral economics in the field of policy advice. He discussed how companies could help their employees become healthier. Good idea, but is providing “salad bars”, exercise facilities and incentives to become healthier what is really needed with an unemployment rate hovering around 8.5% and a budget deficit in excess of $1 trillion?

I do not even want to waste your time with Robert Frank’s “toil index”. Suffice to say that he believes keeping up with the Joneses alone explains why the average size home in the US has increased 50% in the past 40 years.

To paraphrase: with advisors like these, who needs economists? Or, with the content like this, why would I pay?

The opinions expressed in this blog are personal and do not reflect the views of either Global Brief or the Glendon School of Public and International Affairs.


1 Comment

  1. Derek January 7, 2012

    To whom will the built infrastructure belong to, the state or federal government? How do the plan attract businessmen to help politicians?
    Does Robert’s advice mean government will pay interests for individual mortgage?

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