Sunday, April 21, 2013

Reinhart, Rogoff... and Herndon: The student who caught out the profs - or not.

Three of the tired old standards of leftist propaganda are straw men, false choices, and redefinition of words. This article uses two of these methods in the problem statement.

“Some key figures tackling the global recession found this paper a useful addition to the debate at the heart of which is this key question: is it best to let debt increase in the hope of stimulating economic growth to get out of the slump, or is it better to cut spending and raise taxes aggressively to get public debt under control?”

Clearly this is an example of “false choice.” And it’s a goodie.

First the author establishes the boundaries for the discussion by calling her false choice “this key question:” She actually uses “key” twice in the same sentence first by associating it with “figures tracking the global recession.” This provides authority to the word “key” which she exploits to lend weight to her false choice “question.” Clever.

The author then sets a contrast between two alternatives both of which are themselves straw men.

Let’s take the left side of the straw man choice: “let debt increase in the hope of stimulating economic growth”.

First, there are at least two ways to “let debt increase.”
1.       Balance the budget but do not repay debt so debt increases due to interest.
2.       Continue spending more than income which increases debt.

Note that in physical systems rate is as important as direction. And certainly in psychology we see not only rate effects but perception of rate having profound effects on behavior. Rate is not considered as an important component of debt by the author. Such subtleties are apparently far beyond the author’s grasp or, perhaps, cleverly ignored.

Second, the author implies with the statement “stimulating economic growth” that debt stimulates economic growth. This is a surprising statement. Perhaps the author means that government spending beyond income stimulates economic growth. This statement is a variant of Keynesian economics where government spending drives economic growth. But it is not what the author says.

One has to assume that “stimulating economic growth” does in fact cause the economy to grow. Many would argue that this is a false belief.

So, for the left side of the author’s false choice, we are presented with the novel economic idea that increasing a country’s debt will increase its economy.

Now to the right side straw man: “…cut spending and raise taxes aggressively to get public debt under control...”

Here the author combines two different, unrelated actions as if they were somehow simultaneously required. Clearly spending cuts are not a requirement for raising taxes. And, in the US, these two actions actually define the argument between Dimocrats and Republicans. 

Dimocrats want to raise taxes. Republicans want to cut spending. Yet the author lumps these contrasting approaches into a single alternate bucket with the expectation that readers won’t notice. 

At this point an informed reader should simply throw up their mental hands and stop reading. Certainly any discussion flowing from such a misintentioned, or misguided, opening statement is unlikely to shed light on any real problem.

But I will soldier on – for a while.

The author next makes this statement: “EU commissioner Olli Rehn and influential US Republican politician Paul Ryan have both quoted a 90% debt-to-GDP limit to support their austerity strategies.” Thus the author implies that Rehn and Ryan both support an “austerity strategy.”

The term “austerity” has been used just once previously in the article as: “case for austerity cuts”. “Austerity strategy” has not been defined by the author but its meaning is implied both by the initial association with “cuts” (as well as “error”) and by placement after the problem statement.

The author continues to misdirect, or bumble, by saying: “while US politicians were arguing over whether to inject more stimulus into the economy…”

In US English ‘whether’ is part of a contrast ‘whether or not’ or ‘where a or b’. This writer leaves the ‘b’ part hanging. Readers can fill in their own b part.

To wit: Whether to inject more stimulus or not; whether to inject more stimulus or decrease debt; whether to inject more stimulus or not go broke; whether to inject more stimulus or buy a motorcycle. 

The author continues into her intellectual abyss with the statement: “the euro was creaking under the strain of forced austerity.” 

Now this is certainly a statement based upon belief and not fact. The author doesn’t even attempt to justify the statement. And, for the liberal Keynesian True Believers, she doesn’t have to.

 Here I end analysis of the article. Interested, or ideological, readers can pursue additional examples of propaganda in the article but I will wander on to the next of many challenges created by Lefty Logic in the Media.

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