Tuesday, May 1, 2018

Jason Smith — No one saw this coming: Bezemer's misleading paper

Jason Smith calls out Dirk Bezemer (who now identifies as an MMT economist).

Again the difference among 1) scientific prediction based on generating testable hypotheses from a theory, 2) forecasting probabilities of outcomes from data, and 3) foreseeing and forewarning based on contingencies.

Information Transfer Economics
No one saw this coming: Bezemer's misleading paper
Jason Smith

See also
On occasion when I mention things about econ twitter or my blog, my wife responds sarcastically with "Oh no. Are you making friends again?" with the obvious connotation (because she knows me well) that I am starting fights. I'm not sure what sets me off, but one ingredient is usually some reference to physics in the context of economics. The latest version got a response from the subject David Orrell in comments. This is actually a two-part blog post, the other having been scheduled earlier and contains much more detail about the numerous fabricated and out of context quotes in an article by Dirk Bezemer about claims to have predicted the global financial crisis or global recession.

Below, I have responded to David Orrell's comments on my post. Given how blunt I was, David was relatively nice. But this is exactly the kind of discussion I'd like to be having: What does it mean to make macro- or micro-economics more scientific? My general feeling is that what comes under the broad heading of alternative or "heterodox" approaches is strangely exactly like "mainstream" economics, just with different jargon or mathematical decorations. Neither appear to value empirical data. Neither appear to make accurate forecasts. Neither appear to reject models or give up models that so complicated relative to the data they can never be rejected.

Here is my response:
Making friends: David Orrell


Matt Franko said...

Jason is correct here no one saw it coming or predicted it... Jason is a competent scientist..

Australia avoided the problems the others had because the Australian CB never did asset purchases...

This is how science works you see an inequality like this (ie Australia never had the problems...) and then you have to go back thru the policies of the different nations and look for the differences in the POLICIES...

US, Japan, UK, EZ all had problems and they all did asset purchases... the nations that avoided asset purchases never had the problems...

Matt Franko said...

Here let me spoon feed:

Australia.... never.... had... problems...


US... did... have... problems....

Are.... we .... seeing .... this .... inequality.... morons... ????

What... did... the .... US.... do... that .... Australia... didnt.... do... ?????

there is your tip....

Matt Franko said...

don't tell me..... the Australian "neo-liberals!" performed their "neo-liberal conspiracy!" better than the US did... I know.. I know....

Tom Hickey said...

I update the post with a link to Jason's follow up.

Here's a clickable link.


Ramanan said...

Jason is a major charlatan.

For example he quotes about unemployment rising and not falling. And then says unemployment has come down.

The claim was that unemployment will rise and not come down in the scenario unless responded by policy, implicit in the forecasts.

Ramanan said...

Btw, the second quote of Godley which Jason Smith claims is fabricated by Bezemer appears in:


Page 3, right column.

It's a different paper and Bezemer prolly got the citation wrong but it's there.

Sure we can find the first quote too. Bit busy but don't care much about the charlatan Jason Smith.

Ramanan said...

Also, the exact words of the 2006 paper are different but it's eseentially the same prediction.

There's "sustained growth recession" (page 3, column 2)

There's "if house prices stop rising or if the financial-obligations ratio published by the Fed continues to rise, the debt-to-income ratio will slow down during the next few years" (column 1)

Bezemer prolly took another version of the paper which has slightly different words and quoted from it but the idea is all there in the final version.

Very bad faith from Jason Smith.

Matt Franko said...

Oh come on Godley is just polished up Peter Schiff here...

Ramanan said...

Matt :-)

Calgacus said...

Basically side with Ramanan, but I find it hard to think about Smith. Talked to him about Galois theory a few years ago. Aaarggh. Well, I advise him not to visit the Eiffel Tower with a French mathematician and talk like that.

Tom Hickey said...

I link to Jason Smith for two reasons:

1. I think his physics-based approach to using information transfer in economics is interesting.

2. He makes some interesting points wrt philosophy of science, philosophy of social science, and economics, and often provides a critique of economics as science.

Since these are controversial areas, there are no definitive answers. Usually that occurs when there is disagreement over criteria or meaning and such, which are logical matters rather than empirical ones.

But the issue here is whether Bezemer's citations are accurate. He has provided some evidence suggesting that they may not be.

It's up to Bezemer to respond, if he is aware the criticism.

Ramanan said...

I understand Tom.

But his article just looked bad faith. Especially since the second quote is present in another paper, as I linked.

I mean if some serious accusations are to be made, then he should have checked with the author.

It's of course true that Bezemer's article looks sloppy but his sloppiness isn't an excuse to do what Smith is trying to do: discredit all predictions. Those authors aren't responsible for Bezemer.

The predictions are great whatever said.

But Smith should at least correct the second quote I dug out.

Tom Hickey said...

Discredit the opponent is what making objections in a debate based on inquiry is fundamental to the liberal traditions and the practice of science, too.

However, to conform to the standards of the liberal tradition, the debate should be based on facts and reasoning rather than rhetoric or sophistry.

Heated argument is a sign of weakness on the part of the parties that exhibit it.

The method is to set forth the issues and then make a case for them. The task of the opponent(s) is to make objections based on sound reasoning, that is, factual premises and valid logic, while pointing out deficiencies of the other side in this regard, or appeals to rhetoric or use of sophistry.

The PhD is a research degree, the master's being a teaching degree by tradition. Those with a PhD are presumed to know the importance of attribution, documentation, and accuracy of citation, and they are also presumed to be familiar with the relevant source material.

This applies to Bezemer's papers but not as much to Smith's objection in a blog post. I was quite surprised that he went to the trouble to check out the citations and point out what he assumed to be deficient. So I am willing to cut him some space on this, since this is not his field and he cannot be expected to be entirely familiar with it. That is not the case with an economist like Bezemer.

The counter objections raised here are relevant, of course, but unless registered at his place involve no obligation on his part to respond.

I agree that the better course was for Smith to query Bezemer before leveling accusations when Smith cannot be expected to know the entire background since it is out of his field.

Dialectic is always oppositional, which creates some charge around the process. The liberal tradition is based on minimizing this charge and conducting a polite and "correct" inquiry.

The process of inquiry can be compared to a martial arts competition. Its' a sport, so there are rules, but those that step in the ring know they are taking the risk of being bruised in the process of being defeated, or even defending while winning. But in sport the objective is not to damage the opponent.

Unfortunately, polling often gets unnecessarily rough.

Anyway, I would like to see Bezemer or someone clean up any sloppiness if there actually is any, since this is a topic of considerable importance. Unfortunately, it has not yet created the kind of debate it deserves, and I am glad to see it resurrected.

Tom Hickey said...

"polling" should be "blogging."

Matt Franko said...

Unless you guys have somehow figured out how to read the minds of policymakers you or anybody else cant predict shit... sorry to break the news to you...