I am, by training, a scientist. Anyone awarded a Doctor of Philosophy degree by an accredited university has a research degree. They are scientists. As in every field, some are better at their profession than others. Sometimes even bright, well-accomplished individuals can make pretty serious errors. That is why scientists value peer review. That is why research must be replicated [to try to] get the same results. If others in the field cannot replicate the research and get the same results, then the research is flawed. The conclusions reached may be seriously wrong. Decisions based on flawed research can be disastrous.
A current example of flawed research is in a paper written by Kenneth Rogoff and Carmen Reinhart titled “This Time is Different: Eight Centuries of Financial Folly,” published by Princeton University Press. Their work is widely touted. It received awards from the Council on Foreign Relations and the Independent Publishers Book Award in Finance/Economics. It was designated “An 800 CEO-READ Business Books Award.” It was listed as “Top Ten English Books of 2009” by Wirftschaftsblatt.
However, it should have been published in The Journal of Irreproducible Results, which, unfortunately, stopped publication 30 years ago. The latter journal published stupid stuff, which was aimed at a scientific audience and would elicit a good many laughs.
When a group of university grad students tried to reproduce Rogoff and Reinhart’s study, they could not get the same results. They found the research riddled with errors. Perhaps the worst error was the omission of a large chunk of data. When they corrected the errors, they found the conclusion to be the opposite of Rogoff and Reinhart’s findings!
Rogoff and Reinhart took an historical look at financial crises over the last eight centuries and concluded, “This time it is different.” Looking at countries with a 90% debt to gross domestic product (GDP), they showed a negative growth rate of .01–as opposed to the growth rates of countries with less debt. When corrected for the missing data, the conclusion was a positive growth rate of 2.2%. The incorrect conclusion of Rogoff and Reinhart has been, and continues to be, used by politicians like Congressman Paul Ryan, the Republican budget guru, to justify deep cuts in Government spending. Politicians throughout Europe, relying on the same flawed study, have been making the same flawed arguments. Did they choose this study to justify their positions, because they believed it was valid, or because it bolstered their bias?
There is an easy way to tell. If these politicians reverse their positions in favor of austerity, then it can be said they made an honest mistake. If they continue to hold their disastrous positions, then we know that they are very much ideologues, in the same sense as the Marxists before them. Just as Communism was a recipe for economic stagnation–if not disaster–so is their brand of “Conservatism.” What they are espousing is no less than “Voodoo Economics.”
Voodoo Economics is the term former Republican President George H. W. Bush used in his debate with former Republican President Ronald Reagan. It was also called the “trickle-down theory.” These are labels for economic policies that favor making the wealthy even more wealthy.
However, another Republican, Marriner S. Eccles, a millionaire by age 22 in 1912, was appointed by President Franklin D. Roosevelt to be the 7th Chairman of the Board of Governors of the Federal Reserve. In his memoir Breaking Frontiers (1966) Eccles wrote, “As mass production has to be accompanied by mass consumption, mass consumption, in turn, implies a distribution of wealth… to provide men with buying power…frustrated of achieving that kind of distribution, a great suction pump had, by 1929-1930, drawn into a few hands an increasing portion of currently-produced wealth…the other fellows could stay in the game only by borrowing. When their credit ran out, the game was over.”
It was Eccles who rightly observed that the Country had a wealth distribution problem. He suggested Roosevelt champion the Works Progress Administration and the Civil Conservation Corp, as well as Social Security. Eccles was a wealthy Republican, but he was a pragmatist and a problem solver. Thank heavens FDR listened to him! It would be good if today’s Republicans and Tea Partiers did the same. Their failure to listen to real wisdom has horrible consequences.
Here are some of the consequences particular to our State of Illinois. Today 19,700 children and mothers in Illinois will no longer be able to receive help from WIC (nutrition program for pregnant women, infants, and children.) In Illinois, 4121 low-income families will be deprived of rent assistance. In Illinois, $16 million will be cut from Head Start funds. This is what our Republicans are willing to do to cut the Federal budget. This is what they think of the hungry and the homeless: add to their numbers. This is not only sad. It is criminal and not based on real science, rather it is based on Voodoo Economics.
A word from the wise: Pope Francis on Thursday, May 16, 2013, while addressing some ambassadors said he, “oves everyone, rich and poor alike, but the Pope had the duty, in Christ’s name, to remind the rich to help the poor, to respect them, to promote them.” He exclaimed, “This will require a courageous change in attitude on the part of political leaders.” Congressman Ryan, are you listening?
The Pope went on to say, “We have created new idols. The ancient worship of the golden calf has found a new, ruthless image in fetishism of money and the dictatorship (emphasis mine) of the economy without purpose or a truly human face.” An economy that does not serve the common good of all in our society is a slave driver.
Economies are man-made, and they can be corrected and re-made. It is past time for us to address that task. There is no good reason why people in America should be hungry or homeless. There is no good reason why, in America, people should be out of work and our schools be second rate.
We must hold our political leaders accountable. We must demand better from them. We must give our economic system a “truly human face.”