Russell Roberts
Russell Roberts brings wise economic counsel.
In testimony before the congressional Joint Economic Committee last week, George Mason University economist Russell Roberts made a … point with regard to job creation and the stimulus. “There is no reliable way of knowing whether the stimulus package has averted a worse situation—or whether it’s part of the problem. There is no consensus in the economics profession on this question, and no empirical evidence that can settle the dispute.’’
Economics, a tremendous science, is badly abused when policymakers fail to grasp the crucial message Dr. Roberts quietly conveys. The message: economics knows some things pretty well; about other things, economics offers interesting theories which observable facts sometimes refute—theories which, though interesting, though even theoretically unrivaled, must therefore be regarded as probably false.
In the particular case in question, regarding the stimulus, Dr. Roberts admits that he finds himself in a double bind. In this case, the facts which might refute the relevant theories are not even observable. That of course does not mean that all the theories are wrong. It does not even mean that the stimulus should not have been tried (though the Economic Nationalist did generally oppose it). What it means is precisely what Dr. Roberts says that it means.
One should hardly expect to discern the proper real-world application of economic theory until one has understood, not only theoretical economic principles, but also Dr. Roberts’ overriding metaprinciple—that there remain important aspects of the real economy economic theory has never adequately explained, nor can hope to explain any time soon.
HJH
December 18th, 2009 at 7:38 pm
One really good reason for not doing the economic stimulus was that it involved spending foolishly money that we did not have in the first place. Other than that, it was a great way for the pols to buy some votes.