Must We Bash Economics?

The publication in TNR of an excerpt from Jonathan Chait’s The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics must signal that this is now the publisher-approved time to start praising the book. At any rate, I agree with Kevin Drum: “long story short, I liked it.” Unfortunately, so far it only has one review on “Don’t waste your money. The author is indulging in ideological axe grinding. Books to read: The Road to Serfdom F.A. Hayek, Capitalism and Freedom Milton Friedman.”

For the rest of us, though, it’s a very good book. Indeed, it’s put into my mind some disquiet with the sort of economist-bashing that some of my cronies like Ezra Klein and Chris Hayes seem to have decided (figures like Max Sawicky and Dean Baker, themselves economists with credentials are, needless to say, influential here) is integral to the project of progressive economic policy. One effect of the sort of characterizations of mainstream economics that you get from Chris and Ezra is to, in effect, propagate the notion that conservative economic policies are well-supported by a professional consensus inside the economics world.

Chait’s book very convincingly shows that on the key dogma of present-day Republican Party policy thinking — a monomaniacal obsession with cutting taxes — this simply isn’t the case. The ideas the Bush administration, The Wall Street Journal, and all the rest are working with are marginal, crackpot notions that are being mainstreamed through relentless message discipline. There isn’t some army of orthodox neoclassical economists out there who think that returning to Clinton-era levels of taxation would wreck the economy, that retirement security can best be provided to all by expanding tax breaks for rich people, that health care can best be improved by expanding tax breaks for rich people, that sound education policy requires expended tax breaks for rich people etc.

Now, Ezra liked the book, too, so maybe there’s not a ton of tension between these two arguments at the end of the day. But insofar as there is, I tend to see Chait’s strain of argumentation as the more important one. It’s be fine to see the politics of the economy conducted as a discussion among reasonable people who put a different weight on the reality of market failures, on the one hand, and the problems of public choice theory and regulatory failure on the other. What we have instead is a situation where, as Chait shows, vast areas of the policy debate are dominated by liars and crazy people like The Wall Street Journal’s editorialists.