Must-Read: This is the kind of thing that every Republican economist who ever wants to opine on economic policy and be received in polite society at any time in the future should be writing today, about their colleagues who are shilling, loudly or softly, directly or indirectly, for the tax "reform" bill: Brad DeLong: Notes on Gerald Friedman: Larry Summers's and my decision to set our hysteresis parameter η = 0.1 as the central case was merely a calculation followed by a belief and then extended by a guess. But the argument was strengthened by... American economic history....
To me, back in the winter of 2016, projections finding large benefits that made sense only under an assumption of η = 0.4 thus seemed four times as large as was in fact likely to be the case. The world seemed to be telling us that η = 0.1 instead. It seemed—and it seems—to me that overpromising the benefits of even the best policies is not a good business to get in. Somebody like Irving Kristol could unashamedly take the Public Interest he edited and use it as a vehicle to publish things he really did not believe could possibly be true:
My own rather cavalier attitude toward the budget deficit and other monetary or fiscal problems [arose because] the task, as I saw it, was to create a new majority, which evidently would mean a conservative majority, which came to mean, in turn, a Republican majority—so political effectiveness was the priority, not the accounting deficiencies of government…
But this is not a good game to play. We all here seek to do better...
