White Paper, Great Economists and (really) Bad Science

In Denmark, where I come from, academic economists are often used in the media. Whenever there is a political debate on an economic issue or policy proposal, TV and newspapers call out for economists to get their views and analyses. The norm is that journalists try to cover most views on a given issue, and that the economists in question try to be as balanced as possible. Ideally, the economists act as a sort of independent “expert witnesses”. Of course, personal opinions will to some extent color what a given economist will focus on, but one line is never crossed: An academic economist never endorses a given politician or party publicly. If that happens, the credibility of the economist as a reliable source for journalists drops to zero and the scientific reputation among peers drops to a low. When crossing the line, the economist effectively becomes a politician, which is a completely different trade. (As universities are state funded, one is obliged to make it very clear that if one makes a political statement, which of course is not illegal, then it is in the capacity as a private individual and not as an academic economist.)

The reason why I write this, is that in the US things work very differently on these matters. As is well known, a presidential election is coming up in November where President Barack Obama will take on Republican Mitt Romney. As seen here from a list of Mitt Romney supporters, academic economists of all vintages and qualities are not afraid of making an official endorsement. To me, this in itself is a cross of a line, which hampers these economists’ future statements in terms of the scientific objectivity many would ideally see academic economists live up to (their employers are often not the state, so they may not care?). As N. Gregory Mankiw indeed writes in the Introduction to one of the editions to his undergraduate text “Principles of Economics”:

“Economists try to address their subject with a scientist’s objectivity. They approach the subject of the economy in much the same way as a physicist approaches the study of matter and a biologist approaches the study of life: They device theories, collect data, and then analyze these data in an attempt to verify their theories”

However, the endorsement per se is only the beginning of a story of scientific objectivity that is currently stirring the debate. The core is the publication of a “White Paper” by economists R. Glenn Hubbard, N. Gregory Mankiw, John B. Taylor and Kevin A. Hassett. This White Paper is called “The Romney Program for Economic Recovery, Growth, and Jobs” and is thus an unconditional endorsement of Mitt Romney as new president and, in particular, of his proposed changes in economic policy. What is particularly remarkable in this paper is that the authors use academic references to back up their affirmative views on Romney’s policy proposals. I.e., they have not only crossed the line in terms of showing their colors, but they use the methods of their economic profession in the process of being politicians. The result is a horrible mess, which has received strong criticism.

Paul Krugman notes that the authors are trying to “destroy their own reputations”, while Brad DeLong meticulously, and very critically, dissects the paper and its particular use of references to back up its claims. (Note to Brad’s sports analogy: He observes that dishonest referencing sends you to the showers in the US but earns you four red cards in Europe; well, one red card sends you to the showers in Europe!) Ezra Klein has interviewed many of the researchers who are being cited and find that they mostly think that their research lends no support to Romney’s politics. John Taylor has a rebuttal where he notes that

“But the research papers and books that are cited are quoted correctly and do provide supporting evidence. As Scott Sumner reports ‘when I looked at the paper I couldn’t find a single place where they had misquoted anyone.’ ”

(N. Gregory Mankiw on his blog, which nowadays is mostly a link hub, just links to, well, a few links.)

I have no doubts that the white paper does not contain any misquotes as such. Sure, there is a simulation in Altig, Auerbach, Kotlikoff, Smetters and Walliser which shows that some tax reform gives a gain in GDP of up to 1%. This is, however, not inconsistent with the cited authors being in disagreement with the conclusions of the white paper (in the example, according to Ezra Klein, Auerbach did not think the simulation had much to do which the Romney tax plan as that plan is not sufficiently spelled out). As long as researches share their work with the public, it is an occupational hazard to be cited, as well as to be cited in a way that backs conclusions you may not agree with.

This is not the problem either. The problem is that the white paper is written with a political premise, and that the academic evidence is picked selectively to back up the premise. Gone is the objectivity that Mankiw elsewhere states is a goal to strive for. Gone is therefore science. What is left is Bad Science. Bad science is not illegal, it is not even malpractice—bad science is made by many economists all the time. It is just particularly disturbing when highly regarded economists (some of whose work I admire a lot) engage in bad science. It does indeed tear their reputation to pieces, and makes you suspicious whether their next NBER working paper or text book has a gist of “Paid for by Romney for President, Inc.”

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