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July 30, 2009

Martin Feldstein's Long History Of Hackery

Lots of people are enjoying the disastrous error in Harvard Economics Professor Martin Feldstein's op-ed in the Washington Post.

That's lots of fun, but not enough people appreciate what an astoundingly hacktastic hack Feldstein has always been. In fact, he's the reason I finally understood that places like Harvard have literally no allegiance to telling the truth. (This might seem obvious to people who aren't cosseted upper middle-class nimrods, but it was a shock to me.) Here's the story:

Back in the late nineties, Dean Baker was writing to other economists, trying to get them to understand an incredibly simple point: given then-high asset prices, there was no plausible way the U.S. economy could produce both (1) the slow economic growth projected by the Social Security administration, and (2) the historic average of 7% returns on stocks. So it made no sense at all to deal with the (imaginary) Social Security crisis by letting people invest in stocks. You can find the whole story here.

Feldstein responded with a letter sneering at Baker's incredible stupidity:

As a matter of basic economics, this is simply wrong...

I think it would be good if you stopped confusing the discussion with your simple mistake.

Of course, it was Feldstein who had made the simple mistake, which Baker patiently explained (without sneering). Feldstein then realized he was wrong (without apologizing).

At this point, Feldstein could have done two things:

1. Acknowledge Baker was correct to raise an extremely important issue that involved trillions of dollars, and make a good faith effort to discover the truth.

2. Ignore this issue and Dean Baker because he wasn't going to get the answer he wanted.

Martin Feldstein, former Chairman of the White House Council of Economic Advisors, once-leading candidate to replace Alan Greenspan at the Fed, and fancy professor of economics at a university whose motto is Veritas ("Truth"), decided to go with #2.

Again, I know non-morons wouldn't find this shocking. But frankly, I used to be pretty stupid.

P.S. Don't forget that Martin Feldstein is a longtime member of the AIG Board of Directors, and that Harvard University is one of the most left-wing institutions on the face of the earth.

—Jonathan Schwarz

Posted at July 30, 2009 02:21 AM

So, is he a cynical profiteer or a useful idiot? Sounds more like an idiot.

Posted by: abb1 at July 30, 2009 06:48 AM

To risk Social Security to play the stock market is to make war on the working class and it is appalling that Harvard professors would advocate it. Workers of the world unite. Any blue collar worker who finds himself in the position of being able to really stick it to some pompous professor from Harvard should... Wait a minute, why does this remind me of something? Oh, uh, never mind.

Posted by: cemmcs at July 30, 2009 07:55 AM

I clicked on the link to "Feldstein then realized he was wrong," because I've never seen a Harvard Professor realize he was wrong, and wanted to see what that looks like, but I didn't find anything that I - a mere mortal who did not go to Harvard - can translate as "Hey, I was wrong." What am I missing?

Posted by: SteveB at July 30, 2009 09:17 AM

Feldstein plays the most common game ever: the truth is what's good for him. He's hardly alone. As reported at TPM, Charles Millard at PBGC lately took this game to new heights while talking to Goldman Sachs 163 times during the year when he put hundreds of billions of dollars in federal pensions in the market, at a remarkably poor time for federal employees to say the least. These guys NEVER make idiotic mistakes that are bad for them personally.

As for Veritas at Harvard, that is about as good as "The Truth Will Set You Free" in the foyer at Langley.

By the way, since the only value of bullshit is being funny, here's a link to William Shatner reading part of Sara Palin's resignation speech:

Posted by: N E at July 30, 2009 10:18 AM

I've learned quite a lot from Dean Baker, VERY sharp.

Posted by: Mike Meyer at July 30, 2009 11:15 AM

NE, thanks for the Shatner link. No poetaster She! I wept tears of snow.

I didn't realize Shatner was so short. Funny how the camera can trick you.

Posted by: Oarwell at July 30, 2009 11:46 AM

Mike Meyer:

Dean Baker is actually a god. He only pretends to be mortal because being the god of economics is a little embarrassing when all the gods get together.

Posted by: N E at July 30, 2009 12:07 PM

I didn't realize Shatner was so short.

Actually, Conan O'Brien is seven feet tall.

Posted by: SteveB at July 30, 2009 06:22 PM

ImdB says O'Brien is 6'4".

Posted by: Carl at July 30, 2009 07:51 PM

I didn't realize Shatner was so short.

It was the boots.

Posted by: NomadUK at July 31, 2009 03:43 AM

It could be a case of Shatner maintaining a constant volume as he expands horizontally.

This is the age of the expanding man.

Posted by: artguy at July 31, 2009 04:33 AM

"Dean Baker is actually a god."

Well, one of the better ones, I'll grant you.

Posted by: bobbyp at July 31, 2009 04:31 PM

If you think universities are left-wing institutions, try starting a union at one.

Posted by: Hogan at July 31, 2009 04:52 PM

I've never thought of Dean Baker in the religous sense, more in the order of commonsense.

Posted by: Mike Meyer at August 1, 2009 03:47 PM

Mike Meyer:

Ok, fine, he's the god of common sense. We need one.

Posted by: N E at August 2, 2009 12:24 AM