Why oh why can't we have a better press corps?
Hilzoy: "I take the point of [Robert Samuelson's] op-ed to be that he is not competent in his alleged area of expertise, and moreover lacks one of the basic skills that a PhD in a discipline almost always provides: the ability to spot good arguments in that discipline made by other people, and to decide who is worth listening to and who is not":
Obsidian Wings: What Do You Mean 'We', White Man?: Robert Samuelson has an infuriating op-ed in today's Washington Post. It's called "Humbled By Our Ignorance":
"It's the end of an era. We know that 2008, much like 1932 or 1980, marks a dividing line for the American economy and society. But what lies on the other side is hazy at best. The great lesson of the past year is how little we understand and can control the economy. This ignorance has bred today's insecurity, which in turn is now a governing reality of the crisis.
The entire column is devoted to explaining all these things that "we" were ignorant of. But who, specifically, are "we"? It's hard to say. Mostly, it seems to be the nameless subject of the passive voice:
"It was once believed that the crisis of "subprime" mortgages -- loans to weaker borrowers -- would be limited, because these loans represent only 12 percent of all home mortgages. (...)
It was once believed that American consumers could borrow and spend more, because higher home values and stock prices substituted for annual savings. Ed.: Apparently, it was also believed that stocks and home prices always went up.
It was once believed that the rest of the world would "decouple" from the United States.
And so on, and so forth. All these beliefs, and no believers in sight. All this bustle and commotion, and there's nobody around!
The closest Samuelson gets to identifying people who actually believed these things is at the beginning of his piece ("The great lesson of the past year is how little we understand and can control the economy"), and at the end ("Our ignorance is humbling.") Which is to say: it's "us".
And yet, strange to say, I did not believe these things. I'm almost sure I wrote about this in 2006, but I can't recall where, so this from March 2007 will have to do. In it I predict that the mortgage meltdown will knock the legs out from under consumer spending, create a serious credit crunch, and slam the many investors who own CDOs based on mortgages; and that the combination of these three things will be very, very bad, even without taking into account the possibility of systemic risk.
Apparently, I did better than Robert Samuelson. I'm not saying this because I think I deserve credit for that. I don't. That's the point. I'm not especially astute about the housing market, or an expert in economics. I do tend to be common-sensical and cautious about economics -- I do not, for instance, tend to believe such things as: that houses will go up in value indefinitely, or: that we can keep living way beyond our means forever. But that shouldn't exactly set me apart from anyone.
The only reason I saw this one coming was that I read people who know a lot more than I do: people like Paul Krugman, Dean Baker, Tanta at Calculated Risk, Stephen Roach at Morgan Stanley, and Nouriel Roubini. They all challenged one or another of the myths Samuelson lists, and they did so years ago. Moreover, they had arguments to back up their claims, and I found these arguments much more persuasive than the arguments of the people who disagreed with them.
There were very smart people who did predict this. Their writings were not arcane or hard to find -- I mean, I found them, and this is not my area of expertise. Nor was their basic point that hard to grasp. If I could grasp it, then anyone remotely worthy of having an economics column in the Washington Post should have.
Whether or not Samuelson realizes it, I take the point of his op-ed to be that he is not competent in his alleged area of expertise, and moreover lacks one of the basic skills that a PhD in a discipline almost always provides: the ability to spot good arguments in that discipline made by other people, and to decide who is worth listening to and who is not. In his shoes, I would ask myself what, in the absence of competence or the ability to learn from the writings of others, could possibly justify my continuing to take up valuable space in the Post. It's certainly not obvious to me.