Obamacare

Put Him In Bed With the Captain's Daughter: J.K. Galbraith Binge-Drinks to the Death of the CBO

|

The "K" must stand for Kissable!

University of Texas professor James K. Galbraith is a "political economist," a position somewhere between "Christian Scientist" and "Undersea Birdwatcher" on the incompatibility scale. Galbraith's antipathy toward free markets and his fondness for the drunken sailor approach to fiscal responsibility are widely known. And when you don't have to worry about meeting a budget, what could be more pointless than a budget office?

Participating in the Washington Post's "Twelve things the world should toss out" roundup, Galbraith suggests getting rid of the Congressional Budget Office, an agency that (though he doesn't mention it) infuriated supporters of Obamacare with its often terrifying predictions of what the bill would cost. Galbraith blames the CBO for simultaneously predicting that unemployment will fall in the next half decade and that interest rates will rise:

These things cannot happen together. If the CBO's happy growth scenario is right, with low inflation and low unemployment, why would short-term interest rates rise? Conversely, if the CBO's assumptions about health-care costs and interest rates are correct, how can inflation stay low? Ballooning interest payments and health-care spending would spur the economy to full employment and drive up prices—but also slow the rise in debt as a proportion of the nation's gross domestic product.

So where does the CBO get its numbers? That miraculous return to full unemployment and those higher interest rates both come from thin air. More likely, given the passivity of today's banks, high unemployment and low interest rates will linger, unless the government moves on a real jobs program. And that won't happen, because of fear-mongering about the debt—buttressed by the CBO.

If we'd had a CBO in the 1930s, Franklin Roosevelt could never have gotten the New Deal off the ground.

You say that like it's a bad thing! If Galbraith were truly interested in understanding how the CBO can come up with radically different projections, he would 1) consider that the agency's job is to respond to a variety of scenarios that are often mutually exclusive, and 2) read Peter Suderman's masterful (and considerably more nuanced) history of the CBO from the January issue of Reason. Sample:

[E]ven good guesswork is still guesswork. As the George Mason economist Arnold Kling says, "it is literally an impossible task" to accurately make the sort of projections the CBO specializes in. "We don't do controlled experiments in economics," Kling says. "So when you're talking about figuring out the effects of health care policy, it's very difficult."

Part of the difficulty is that the CBO is trying to replicate systems it can't really see. To understand the problems with building an economic model, consider what it takes to make a working scale-model train. To build that train, you'd first need accurate information about how the full-size train works: how big its parts are, at what speed those parts move, its power consumption and control system. Imagine trying to build a model train without ever being allowed to look inside the engine compartment. A smart engineer would be able to make reasonably educated guesses about the internal workings by measuring the outside and by looking at various external controls, but those guesses would almost certainly come with a high margin of error.

Suderman doesn't exactly give a ringing endorsement to the CBO, but Galbraith's motive is sadly obvious. He loves deficits the way drunks love booze, and his vision is of that moment when the bartender steps outside for a smoke and you can slip behind the bar and help yourself. Sure, we've all been there, but it's not something you want to recommend for the whole country.

 

There are other interesting suggestions in the Post feature. Onion editor Joe Randazzo recommends getting rid of internet memes, Flamin' Jay Rosen says no to Washington Week, and Kara Swisher says it's time to 86 keyboards in favor of touchscreens. (I have a physical reaction against touchscreens and find few things more off-putting than the flamboyant, limpwristed gestures the hand models make in smartphone commercials, but I fear Swisher's right on this one.) Also Ed Begley Jr. wants to take away your front lawn. Maybe we can create a federal department of grass eradication once the CBO's not around to worry about the cost.

NEXT: Unpaid Interns Are Exploited?

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Perhaps he could explain why his hair is leaving his melon and migrating to just south of his cakehole.

    1. University of Texas professor James K. Galbraith is a “political economist,” a position somewhere between “Christian Scientist” and “Undersea Birdwatcher” on the incompatibility scale

      In other words, our kind of crackpot.

  2. From Galbraith’s Article in The Nation:
    “Governments and banks are the two entities with the power to create something from nothing. If total spending power is to grow, one or the other of these two great financial motors–public deficits or private loans–has to be in action.”

    Something from nothing? Why do these people feel insulted when refered to as Keynesian wizards? That somehow banks and governments are magical entities that could provide us with everything we need, why even work? Why worry about scarcity?

    1. “”Governments and banks are the two entities with the power to create something from nothing.””

      It’s really a pretty stupid statement, but perhaps it say more about his views towards the citizenry who money banks and governments rely.

    2. Don’t you know the government can print its own money? Seriously, it helped the Germans recover from World War I. didn’t it?

    3. The question is: why does anyone pay any attention to any economist?
      Has any one of them ever made a specific predication that came true that could be verified by other than chance?
      You may as well be listening to a 8th century cleric. (my apologies to 8th century clerics, who often display more common sense than 20th century economists).

  3. the flamboyant, limpwristed gestures the hand models make in smartphone commercials

    They got a sissifying influence.

  4. It’s guys like Galbraith that ultimately lead to wild commie mobs firebombing banks with the employees still inside.

    1. Nope. He’d need at least four more syllables in his name.

      1. Well, Greece is being advised by NobelPrizewinningeconomistJosephStiglitz ….

  5. “…infuriated supporters of Obamacare with its often terrifying lowball predictions of what the bill would cost.”

  6. Why isn’t Galbraith’s head an animated GIF spinning around in circles?

  7. The touchscreen thing is insane. My recent purchase of a smartphone started with 1 rule – must have physical keyboard.

    1. Touchscreens are a decent substitute for a mouse. Not for a keyboard. Of course, I still think it was a big mistake to move away from keyboard interaction with computers to more GUI based interaction. Keyboards are just so much more efficient.

  8. Governments and banks are the two entities with the power to create something from nothing.

    Apparently Galbraith has never heard that “pushing on a string” metaphor.

    1. That was the 1930’s. Today, however, I fear we may be hanging by a thread.

  9. Completely off topic, new poll today: Rand Paul up 12 pts with 12 days to go until primary.

  10. This is way too fucking long.

    1. That’s what she said.

  11. Metaphor, analogy- whatever.

  12. That Post series is like footnotes from a diagnostic manual.

    Rove’s is the only entry that’s not a royal-“we” claim of vanguard mastery or a totally batshit neurotic self-justification.

    Rove.

    1. Trust me, it pains me to write this. But I think Donna Brazille made a… fair point.

      But yeah, most of those entries looked like “Write yourself a self-help book” day at the asylum.

      1. If your only credentials are “GOP shill” or “Democratic hack,” you’ve no business cluttering up the airwaves or the op-ed pages.

        Then what will she do for a living?

  13. “More likely, given the passivity of today’s banks, high unemployment and low interest rates will linger, unless the government moves on a real jobs program.”

    Since interest rates are driven by both demand for money and expected inflation, what he is really saying is that we could never have low growth, high unemployment and high inflation.

    To these clowns it is as if the 1970s never happened.

    1. Absolutely! James Galbraith is the clownish holdover of his father’s ideas – John Kenneth Galbraith who loved BIG banks, BIG corporations, BIG unions and BIG government, and who had no role for entrepreneurship in his model of the economy. Of course the 80s, 90s and 00s completely demolished that argument, not to mention the debt, deficits, micromanagement, price controls, and high inflation catastrophic spiral in the 70s which was supposed to demolish Keynesianism as well.

      ITS GHOST OF KEYNESIANS PAST, PEOPLE! Who you gonna call? GHOSTBUSTERS!

  14. in case some don’t know this, the “captain’s daughter” was slang for a cat ‘o nine tails.

  15. If we’re going to talk about sea shanties, we better damn well throw in some PIRATE METAL:

    http://www.youtube.com/watch?v…..re=related

  16. You give Galbraith a post at Hit & Run? C’mon, man.

  17. Here is a better version of Drunken Sailor: http://www.thefenians.com/index2.html
    Scroll to the bottom for the link to the MP3.

    If you live in S. California and you like Irish music, The Fenians are well worth the time to go see. The mandolin player is awesome; a Hendricks on the mandolin. I don;t live there anymore, but the The Harp is a good venue.

  18. Galbraith blames the CBO for simultaneously predicting that unemployment will fall in the next half decade and that interest rates will rise:

    These things cannot happen together.

    Except when they do, and the resulting economic malaise is so brutal that it gets a name of its own: Stagflation.

    1. Ignore that post: meds must not have kicked in yet. I thought I had a good vein, but I guess not.

      1. Why? That is exactly what I posted above. He is assuming that interest rates can never go up in a time high unemployment and poor growth, which is of course exactly what happens during stagflation.

        I will say it again; it is as if the 1970s never happened to these people.

        1. Stagflation is not what characterized by declining unemployment and rising interest, that’s why.

          Of course he’s completely wrong that you can’t have rising interest and rising employment. That’s exactly what you get in a somewhat overheated economy – good job market, demand-driven price and wage inflation, and inflation-driven interest rate hikes.

          1. “Stagflation is not what characterized by declining unemployment and rising interest, that’s why.”

            You forgot a word or two and I don’t understand this sentence.

            To restate my point. He says the SBO numbers are bunk because he thinks that since we don’t have a jobs program, unemployment will remain high and interest rates low. I say that is not necessarily true because stagflation proved that you can have growth, low employment and inflation (and by necessity high interest rates) all at one time.

            1. CBO said “unemployment will fall” not “employment will fall” while interest rates rise.

      2. It’s perplexing though, because he also says “Ballooning interest payments and health-care spending would spur the economy to full employment…” I don’t know whether I’m missing something, or he’s making a funny, or something else. How can ballooning interest payments spur full employment?

        1. Maybe he’s never heard of the Broken Windows Fallacy and thinks that running around the streets of your city and firebombing buildings constitutes an actual job.

        2. I guess because everyone will hurry to spend their money before it inflates away. And people whose wealth has just inflated away will hurry to get off their asses and get a job. Or something.

  19. How can ballooning interest payments spur full employment?

    More repo men.

  20. It amazes me that crackpots like this not only get hired but manage to get tenure at otherwise respectable universities like UT.

    1. The problem with UT is the Lyndon B. Johnson School of Public Affairs where he works. Obviously a mutual admiration society

  21. Man, I just can’t wait for all these boomer assholes to die off from environmentally induced cancer!

  22. Ed Begley: You live in a desert that does not have enough water to support you. I live in a place where I need no fertilizer, pesticides, and have at least 3 species of grass.

    Maybe the bigger problem is assholes like you getting subsidized water from the rest of us?

  23. am I the only one who looks at that picture and thinks “Assclown”?

  24. Instead of “put him in bed with the Captain’s daugher”, how about “Put him in a dress and call him Linda”?

    Is a sea shanty where trailer-park pirates live?

  25. This guy is proof that you can’t point to failed socialist states that collapsed under their own debt and say “See?”

  26. Governments and banks are the two entities with the power to create something from nothing.

    Holy fucking shit!

  27. Kara Swisher says it’s time to 86 keyboards in favor of touchscreens. (I have a physical reaction against touchscreens and find few things more off-putting than the flamboyant, limpwristed gestures the hand models make in smartphone commercials, but I fear Swisher’s right on this one.)

    I doubt it. To master any musical instrument you have to learn to minimize the motions of your fingers. A flat screen will never provide the contours of 3d space that a decent even tiny set of keys provides to affect minimum movement and comfort when used. After the current trends of touch screens wanes, we’re going to see some fantastic ergonomical user input devices that don’t wear out the sockets in your wrist and elbows like those damn flat touch screens.
    Our medicared up parents are using up the titanium resources for their own joints, so it wont even be an option.

  28. Whenever you hear someone advocate for touchscreens, you know they never tried to get any work done with one.

    I was delighted when invited to help build a system based on touchscreens until I found out that an hour of serious work made my arms feel like they were falling off.

    Bill Drissel
    Grand Prairie, TX

  29. Governments and banks are the two entities with the power to create something from nothing.

    I read Galbraith’s book and this actually means something. Think of the “paper” in your wallet and your credit card. Now do you realize that you believe that nothing is something too?

    It is too easy to criticize things we don’t understand. Really, all the comments are just attacking a straw man.

Please to post comments

Comments are closed.