When Economists Attack—Defending Myself Against A P.O.’d Wonk

by Noam Scheiber | November 11, 2012

Dean Baker read my review of Nate Silver’s new book, The Signal and the Noise, and began his response thus: “It’s best to ignore personal slights in Washington and elsewhere…”

Let me briefly pause here to amplify this statement: It is best to ignore personal slights in Washington and elsewhere. It’s even better to ignore personal slights in Washington and elsewhere that are neither personal nor slights.

Okay, let’s continue. Baker’s beef is with a seemingly innocuous line in my review, in which I posit that “it’s not hard to imagine Silver and his ilk one day letting the air out of an inflating housing bubble.” This somehow drives him batty. He writes:

It shouldn’t be too hard to imagine since that is what some of us were trying to do from 2002 onward. The remarkable story here is that we were ignored at the time and are apparently still ignored even after the fact by people who have the credentials to write in the NYT. …
How is that history can be completely rewritten? The problem was not that people were not making the case that we had an unsustainable housing bubble. The problem was that people with authority chose to ignore the people making the case that there was a bubble. And even now they can claim that the people warning about the bubble did not exist.
This works out well for the bubble deniers since it makes it easier to claim the “who could have known?” defense. But it is not true, and it is outrageous that Scheiber could ignorantly write something like this and the NYT book editor could allow it into print.

Baker, you will not be surprised to learn, was among those who were early to identify the housing bubble. This is to his everlasting credit. But he only seems to have processed the one line in my review that obliquely applies to him, while missing the other 1190 words. If you read that line in context, it’s pretty clear that there’s no suggestion of any kind that the housing bubble went unpredicted by certain prophetic economists. I would never have said or suggested this because: a.) Even if I’d been completely oblivious to such economists before reading Silver’s book, I would have been aware of them afterward, since Silver discusses them at some length. b.) I was not in fact unaware of their existence, having personally written about and spoken to many of them—including one named Dean Baker, whom I wrote about back in 2006 in an obscure outlet called … The New York Times. (I’m actually a big Dean Baker fan. Or at least I was before this exceedingly bizarre and unprovoked tirade).

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The claim I make in the review is closer to the opposite of the one Baker attributes to me. In a nutshell, I argue that the media faces a kind of crisis. There are lots of people saying and writing lots of stuff, but very few who command the authority to move public opinion, the way some intellectuals and journalists were able to a generation or two ago. I posit that Silver may be approaching that bygone level of influence:

What Silver is doing … is playing the role of public statistician — bringing simple but powerful empirical methods to bear on a controversial policy question, and making the results accessible to anyone with a high-school level of numeracy. The exercise is not so different in spirit from the way public intellectuals like John Kenneth Galbraith once shaped discussions of economic policy and public figures like Walter Cronkite helped sway opinion on the Vietnam War. Except that their authority was based to varying degrees on their establishment credentials, whereas Silver’s derives from his data savvy in the age of the stats nerd.
That Silver is taking this on is, by and large, a welcome development. Few journalists have the statistical chops; most scientists and social scientists are too abstruse. Though his approach doesn’t apply to every issue, it’s not hard to imagine Silver and his ilk one day letting the air out of an inflating housing bubble, or unmasking tobacco-company spin, by appealing to nothing but the numbers.

So, just to make crystal clear how this might apply to housing: The point isn’t that no one called the bubble while it was inflating. The point is that some journalists and social scientists tried to warn us, but for whatever reason they didn’t get the message out. Maybe they didn’t have enough stature. Maybe they weren’t able to write and speak in plain English. Maybe they weren’t viewed as ecumenical figures (as opposed to partisans or ideologues). Maybe they just didn’t have a big enough platform. The beauty of Silver is that he has all of these things. If he decides to make the skeptics’ case during the next housing bubble, then maybe the people buying all those houses they can’t afford, to say nothing of the people who are supposed to crack down on fraudster bankers and brokers, will take notice. I would have thought someone like Baker would cheer this development, even if it didn’t bring him any personal credit. Apparently I was wrong.

Update: Baker is still at it, aggressively misrepresenting what I’ve written in a second piece up today. It would be highly compelling stuff if only it were true. But, hey, why let the facts get in the way of a chance to dwell on your personal hobbyhorse. 

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