My favorite incompetent/professionally indifferent public economic forecaster showed up briefly in the online news world this week.
You may remember Brian Wesbury as a fixture at the annual Lakeland Chamber Economic Forecast, which Allen and Company sponsors, and who, I’m told, controls the speakers. Wesbury’s the guy who, in 2008, predicted the Dow would swoosh to 16,000 by the end of the year. I bet him via blog that it would not. I won. Unsurprisingly, he never acknowledged my existence because I’m just a dude with a computer and basic common sense and a respect for my audience.
Anyway, Wesbury wrote a commentary somewhere recently attacking Nobel-Prize-winning economist Paul Krugman for various things. Now, understand, Krugman has gotten virtually everything right during this period of eocnomic turmoil. His policy recommendations have generally not been followed, but no one has seriously or effectively questioned the fact-basis of his analyses. Bottom line: Stimulus was much too small to sustain robust economic growth over time, but the U.S. economy is far better off than it would have been without it. And borrowing money for stimulus spending when the FED has its prime interest rate at zero does not cause inflation. Rather, lack of spending tends to cause deflation, which is bad. We continue to be locked in a crisis of overcapacity that echoes the essence of the Great Depression, a true repeat of which we headed off by spending and dropping interest rates as low as possible.
Wesbury’s piece declared: “Krugman is Wrong,” which is a little bit like Sarah Palin accusing someone of being Alaskan. (I’m not going to link to him because he’s a clown and huckster.)
To which Krugman responded with Wesbury’s own words, a quote from the day Lehman Brothers collapsed in 2008. I hadn’t heard this one before:
The key thing to remember here is that the emphasis belongs on the word financial. These financial market problems are not a result of widespread economic weakness, otherwise known as a recession. In fact, real GDP has grown 2.2% in the past year and accelerated to a 3.3% annualized growth rate in the second quarter. — FirstTrust Monday Morning Outlook
The good news is that this financial earthquake is unlikely to turn into an economic earthquake. The bad loans made earlier this decade did not create a widespread economic boom; and the realization of how bad some of these loans are will not create an economic bust. — FirstTrust Monday Morning Outlook
To me, this is just the essence of modern conservatism: Nothing matters except who you say is wrong. Doesn’t matter if they are wrong. Or if you are wrong. There is no shame, no professional integrity, no self-analysis. Just endless, relentless teamism. If you say the right thing about the right people, you get free travel, meals, and a fat check to repeat your incompetence year-after-year. That’s the free market at work, baby.
I don’t have any money to speak of, but if I did, I certainly wouldn’t spend it on a place that thinks this guy knows — or even cares — what he’s talking about.
I know a number of smart, honest people who work at Allen and Company. Come on guys, doesn’t this embarrass you? Just a little?
Why not bring Krugman in? That would make for great debate. He can joust with the economic conservatives in the crowd. He’ll defend his positions with analysis and numbers and honesty. Actually, you probably couldn’t afford him, which says something about the relative value the real market places on him and Wesbury.