The ladder of social science reasoning, 4 statements in increasing order of generality, or Why didn’t they say they were sorry when it turned out they’d messed up? — Andrew Gelman

Reinhart and Rogoff. Why didn't they take responsibility, a student asked Andrew Gelman. Statistics professor Gelman answers:  It wasn't actually about the data in the minds of R & R, so being wrong about it apparently made no significant difference to them. Empirical result? Meh.

Rationalists, or just ideologues with a cognitive bias?

Statistical Modeling, Causal Inference, and Social Science
The ladder of social science reasoning, 4 statements in increasing order of generality, or Why didn’t they say they were sorry when it turned out they’d messed up?
Andrew Gelman | Professor of Statistics and Political Science and Director of the Applied Statistics Center, Columbia University

See also

Paper by Mohsen Javdani and Ha-Joon Chang
Marginal Revolution
Ideological bias and argument from authority among economists
Tyler Cowen | Holbert C. Harris Chair of Economics at George Mason University and serves as chairman and general director of the Mercatus Center

Bet against the fools when the Fed raises rates. It's a lock!

They were all wrong about monetary policy and in particular the rate cuts, ZIRP, QE, balance sheet expansion, everything. They had it all wrong. 

People like Schiff, Faber, Rogers, Reinhart & Rogoff, Bill Gross, Martin Feldstein, the GOP, Obama, and so many more. Quacks and elite quacks. Ideologues. Snake oil salesmen and snake oil saleswomen.

We were told that interest rates would spike, there was going to be hyperinflation, gold would soar to $5,000 an ounce or higher, the dollar would get crushed, yada, yada, yada.

Some are still saying it.

Now as we are on the verge of the first rate hike in seven years many of these same quacks and fools are warning of dire consequences. They're saying that the Fed has no room to "undo" what it did, that it will bring on dire consequences, that the bubble it created will blow up with a ferocity of the Bikini Atoll H-bomb test.

What do YOU think will happen?

I'll tell you what I think will happen. The exact opposite of what the aforementioned, "Gang of Clueless" think is going to happen.

Even if I didn't know a stick of economics (MMT economics), I would bet the ranch and do the opposite of whatever those idiots say just because they've been sooo wrong for so long on so many things. Now they're talking about the dire consequences of  the coming rate hike cycle.

Ha!

Wild horses couldn't keep me from betting against these fools even if I knew nothing.

Any good horse racing handicapper will tell you that you always bet on form. If a horse is prone to winning and if that horse is prone to winning even more consistently under certain conditions then you bet and you bet aggressively. But these horses are prone to BEING WRONG AND LOSING! So I will bet heavily against them.

That’s what I will be doing.

So...rate hikes? Yep...and stocks soar, dollar crashes, commodities finally get off the floor.

Why? 

Because it's the opposite of what we've been doing for the last eight years, which has been to cut rates, strip the economy of assets (central banks are doing this) and take income away from people. 

Sure, you're helping a few folks get cheaper credit, but they have to pay it back to the banks so the banks are the ones who earn and more importantly, lower rates set the price lower of many other things.

On the other hand, when the government starts issuing people checks--I don't care whether that's a Social Security check or a payment to a doctor via Medicare or INTEREST PAYMENTS--that's  money to keep and money to spend and that's a fiscal stimulus.

The past eight years have been deflationary. The idiots got it wrong. WE got it right. The next few years of rate hikes will start the boom cycle again. Buy stocks, buy commodities, short the dollar, short bonds, clean up make a fortune and invite me on your sailboat or yacht, but make sure it's somewhere warm where the water's nice and clear. 

Greg Mankiw on Piketty's mistakes versus Reinhart and Roggoff's mistakes.

 Compare Greg Makiw on Piketty's mistakes with his assessment of Reinhart and Rogoff's mistakes.

Robert Pollin — Public debt, GDP growth, and austerity: why Reinhart and Rogoff are wrong

Burying R & R deeper.

And still no discussion of differences in historical context, such as fixed versus floating exchange rates.

LSE
Public debt, GDP growth, and austerity: why Reinhart and Rogoff are wrong
Robert Pollin | Distinguished Professor of Economics at the University of Massachusetts-Amherst and Co-Director of the Political Economy Research Institute (PERI)
(h/t Brad DeLong)

The pattern is clear. It's a simple model, but the predator finance capitalist model is devastatingly effective.

The pattern is clear. America's predator finance capitalists, who are clearly in control, run roughshod over the global economy with nothing stopping them.

Their model is simple: First, lever nations up with debt by using schemes that involve massive control fraud, then force them to the brink of bankruptcy and then offer to "save" them with "bailouts" via central banks or the IMF or World Bank, in exchange for brutal austerity. This destroys labor bargaining power and income, it also necessitates asset liquidations at fire sale prices.

That's when the predators swoop in to buy up these assets at pennies on the dollar and begin imposing fees for the use of the very same assets that once belonged to the people, which by the way, were paid for many times over as a result of taxes collected. In effect the new owners, the finance capitalists, impose a new tax for an asset that we the people once owned free and clear.

Now for the loans. Of course the loans are such that they can never be paid off because their terms are so onerous. This ensures that the austerity never stops because the threat of bankruptcy is always there. Only when the body of the victims have been sucked dry of every possible remaining asset do the predators discard the wretched carcass, but before they do, they take whatever is left of the pensions of the public workers. Then they look for a new victim and repeat, all the time aided by the law enforcement and military apparatus of the United States, which is unchallengeable.

I may have left some things out, like a corrupted academe (economics profession, certain universities i.e. Harvard, Stanford, U. of Chi.), which enables these frauds and thefts thanks to bogus research (Reinhart & Rogoff stuff), a cowardly and unsrupulous media that will do or say anything for ad dollars and a dumbed down citizenry.

But you get the picture.

Mark Gongloff — Krugman Trolls Deficit Hawks With One Amazing Chart

The Huffington Post
Krugman Trolls Deficit Hawks With One Amazing Chart
Mark Gongloff

Izabella Kaminska — Why the level of government debt may not matter

The following is the conclusion from an NBER paper by Anmol Bhandari, David Evans, Mikhail Golosov and Thomas J. Sargent. Published in September, it looked at the relationship between taxes, debts and wealth transfers, and how economic context effects them.

In other words, when it can, or cannot, be helpful to run high debt.
What’s interesting, of course, is that the paper’s findings contradict those of the famous Reinhart and Rogoff paper of 2010:....

But the main point is that in the context of a recession it’s sometimes better to think of the national debt as the national saving, or the national equity, rather than debt outright. 

The Financial Times | FT Alphaville
Why the level of government debt may not matter
Izabella Kaminska

Not wholly in paradigm, but a huge improvement over R&R.

Essentially, taking a blanket approach to debt-to-GDP ratios across the world is not necessarily effective at all. What applies to one country, may not apply to another country.

Yves Smith — Beyond Debt and Growth: An Interview with Robert Pollin

As readers likely recall, Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst wrote a paper, “Does High Public Debt Consistently Stifle Economic Growth? A Critique of Reinhart and Rogoff,” which revealed serious methodological problems with one of the linchpin papers used to justify cutting government spending even in times of recession. Nevertheless, Reinhart and Rogoff have been trying to salvage what they can by claiming they never said the relationship between high deficit levels and their claim of serious economic damage was causal. The interview that we’ve republished includes a box that shows that, au contraire, Rogoff did in fact did push the austerity line. 

Naked Capitalism
Beyond Debt and Growth: An Interview with Robert Pollin
Yves Smith

Caught again. Reputations shredded.

Stephen Colbert DESTROYS Reinhart and Rogoff. Hilarious!!!

The Colbert Report
Get More: Colbert Report Full Episodes,Political Humor & Satire Blog,Video Archive

And here's Colbert's interview with Thomas Herndon, the kid who brought down Reinhart and Rogoff.

Massive idiocy! Fitch downgrades Britain!!!

These moronic rating agencies never learn do they?

After S&P's laughable downgrade of the U.S. two years ago you would have though Fitch would have learned something, but, NO! They downgrade Britain.

Once again the rating agencies PROVE that they don't understand the distinction between a currency issuing nation like Britain and a currency using like Greece or, Italy or, Spain or, yes, even Germany!
Britain can never, ever, ever, ever, default on its debts because all its debts are denominated in Sterling!

Here's what Fitch stated as its rationale for the downgrade:

KEY RATING DRIVERS
The downgrade of the UK's sovereign ratings primarily reflects a weaker economic and fiscal outlook and hence the upward revision to Fitch's medium-term projections for UK budget deficits and government debt. Despite the loss of its 'AAA' status, the UK's extremely strong credit profile is reflected in its 'AA+' rating and the Stable Outlook.

- Fitch now forecasts that general government gross debt (GGGD) will peak at 101% of GDP in 2015-16 (equivalent to 86% of GDP for public sector net debt, PSND) and will only gradually decline from 2017-18. This compares with Fitch's previous projection for GGGD peaking at 97% and declining from 2016-17 and the 'AAA' median of around 50%.

- Fitch previously commented that failure to stabilise debt below 100% of GDP and place it on a firm downward path towards 90% of GDP over the medium term would likely trigger a rating downgrade. Despite the UK's strong fiscal financing flexibility underpinned by its own currency with reserve currency status and the long average maturity of public debt, the fiscal space to absorb further adverse economic and financial shocks is no longer consistent with a 'AAA' rating.

Check out the highlighted part. "gross debt to 100% of GDP." They must be using Reinhart and Rogoff, still, even though those two have just been shown to be charlatans!!! LOL!!! Unreal!!!

Fitch...YOU SUCK!!!!

Watch me take apart Reinhart and Rogoff, deceitful, lying, manipulative, self-serving scum

Charlatans!!! Reinhart and Rogoff totally doctored their work to make their bogus claim about sovereign debt

The truth is finally out, but I knew these two were scam artists all along. See my video.

Harvard economists, Carmen Reinhart and Ken Rogoff, whose work, "This Time It's Different," has become the "blueprint" for massive and destructive global austerity is not only flawed (as is obvious), but it's pure manipulation and distortion!

These charlatans doctored their data a new study clearly shows. They omitted years, purposely left out countries that did not support their theories and used misleading weightings and analyses.

Check it out here.

Liars and con artists.

But don't get your hopes up. While their reputations may have been tarnished slightly within the very tight knit and closed economics community, their work will continue to serve as a blueprint for the elite to inflict misery upon millions through forced austerity.

As for Harvard, don't worry, it's reputation will remain unblemished. Hell, if Robert Rubin and Larry Summers couldn't destroy Harvard's rep, nothing will.

Bill Mitchell — Ratings firm plays the sucker card … again

Bill excoriates Moody's for the UK downgrade and George Osborne for lying about it. Reinhart and Rogoff come in for criticism too.

Bill Mitchell — billy blog
Ratings firm plays the sucker card … again
Bill Mitchell