Friday, May 3, 2013

He who crows last

Would be named Scott Sumner, because he can use the latest jobs report to say, I told you so.

Well you guys [Keynesians, anti-Austerians] had a nice little run, but it’s all over now.  Monetary offset stands triumphant.
PS.  I should clarify that the big story is the revisions.  We are adding 196,000 jobs per month this year, which is actually more than last year, despite the austerity.
Which Scott attributes to 'monetary offset' (expansionary monetary policy by the Fed) of 'austerity';
So far it looks like I was right and the Fed was wrong.  Admittedly things could change, but Fed officials are already in full CYA-mode, blaming fiscal austerity for the slowdown, despite the fact that they anticipated fiscal austerity when they made their forecasts in late 2012.  You don’t hear them say; “Sumner was right, we never should have forecast such robust RGDP growth in the first place.”
... Meanwhile the anti-austerians predicted a 1.5% hit to RGDP, some even mentioned 2%, and yet those predictions also look off base so far, as 2013 will look much like 2012.  Yet the press has an overwhelming Keynesian bias, so any facts are assumed to support the Keynesian model, no matter how much at variance. For instance, the US is doing more fiscal austerity that Europe, and yet David Beckworth showed that it’s Europe that has the big slowdown, not the US. 
Which also makes Paul Krugman's latest jihad against the Devil's Disciples look pretty silly too. 
These aren’t good times for austerian economics; and, to be honest, they aren’t too good for economics in general. Even if some economists have come out of the Reinhart/Rogoff/Alesina/Ardagna business looking pretty good, the reputation of the intellectual enterprise as a whole has clearly suffered.

Well, someone's reputation has certainly suffered.

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