This column can be credited to (or blamed on) George Bush.
During the presidential campaigns before the 2004 election, I was very unhappy with the coverage of Bush’s economic proposals in the press. The reporting on the claim that tax cuts would cause so much growth they would pay for themselves, and the discussion of Social Security privatization were particularly irksome, but there was a more general sense that people writing about economic issues were too easily lulled into “bothsideism” and swayed by political spin. Readers were not being informed about what economic theory and evidence says about the policies the candidates were proposing.
In an attempt to do whatever I could to change that, I started writing letters to the local paper followed by three op-eds. Then, one day in March of 2005 I started a blog. That eventually led to this column.
I wasn’t the only one who began using blogs to try and improve communication about economics. The number of economists with blogs has grown substantially, and it has made a difference. The press coverage of economic issues is much better than it was during the campaigns for president in 2004. It’s not perfect, there are still occasions when I want to tear my hair out in frustration, but it’s far better than it was.
Reporters have learned from blogs. From my experience, it’s clear they read them when they are writing a story and then call for clarification if they still have questions. When they get things wrong, economics bloggers let them know about it, and that has helped to prevent and correct lazy writing. Because of blogs, reporters now consult a much wider variety of knowledgeable people on the issues they are covering rather than turning to the same people again and again that they know will answer the phone or return an email and provide good quotes.
Academic economists who have shown they can talk about economics in a way that the general public can understand have been hired by major publications to do the reporting themselves, and they are asked to appear on radio, TV, and podcasts. The general knowledge of economics among reporters is much better than it used to be, and economics blogs have played a key role in bringing about this change.
So it’s been frustrating to see how little difference it has made in the current presidential campaign. Trump’s economic plan, if you can call a mishmash of unrelated, ever-changing proposals a plan, provides a good example. You can find economists who support Trump’s economic plan, but they are as rare as scientists who believe that global warming is a hoax.
His incoherent plan to cut taxes by trillions, protect Social Security and Medicare, and balance the budget and his various ramblings about international trade (the latest is a threat to pull out of the WTO) have been reported, along with strong denunciations by economists from both political parties. But it seems to have made little difference to his supporters.
Part of the reason economists are dismissed is the failure to predict the Great Recession. Also, the failure to thoroughly denounce and ostracize economists who have misled the public to achieve political goals has caused the public to be unsure of who they can trust to tell them the truth about what we do and do not know. It’s not clear, however, that economists have ever had as much influence as they like to imagine.
Can that change? Economists are pretty good at explaining events that have already taken place. We can tell you what caused the inflation of the 1970s, the recession of 1982, and so on. That is valuable knowledge that can be used to design policies to prevent problems from reoccurring, or softening their effect if they occur despite our effort to prevent them. Even when we don’t agree on the cause of a particular event, as with the financial crisis, since the result is the same no matter which explanation is correct – a run on the shadow banking system – we can suggest effective circuit breakers that can limit the effect on the economy. Dissecting events after they happen and designing effective policy responses is, in my view, where economists have the most to offer.
But the public doesn’t care about that. I have been asked I don’t know how many times what’s going to happen to the stock market or the economy in the future, but I don’t ever recall being asked why the stock market went up or down last month. People aren’t interested in the water that has already passed under the bridge; they want to know what is going to happen in the future and how particular policies will affect their lives.
Forecasting exactly when or if a recession will occur is not something we are very good at, but when it comes to the impact of changes in policy we have more to offer than we are given credit for. We can’t determine the exact magnitudes of how variables such as output, employment, interest rates, and inflation will change in response to a change in policy with the precision the public would like, and the forecasts are often given in terms ranges and probabilities. But we can usually predict the direction of change – whether a particular variable will go up or down – and give some sense of the expected magnitude.
So let me make a prediction. Donald Trump’s economic policies, if he is elected and Congress is foolish enough to enact them, would be disastrous for the working class. I can’t tell you exactly how bad they would be, or even the precise range of negative effects we should expect. But I have no doubt at all that his policies would do great harm to the US economy.