The Corner

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Stimulus Humility


In my experience, entrepreneurs tend to be contrarians. Recognizing that a willingness to court unpopularity is actually my core competence, The New Republic asked me to be their “from the right” guy in a new blog designed to criticize things they publish. How could I refuse?

My first contribution took on the hysteria in a global-warming piece by Al Gore. I wasn’t gentle — to TNR’s great credit, they were fine with that — and the post stimulated a lot of back-and-forth, though I think that the key claim in my criticism — that the scientific findings of the bodies Gore cites as authoritative do not justify anything approaching the actions Gore proposes — stands unrefuted.

I have a piece up today in which I make an argument that will be familiar to Corner readers: The usefulness of stimulus spending is often asserted as a technical finding of macroeconomic science, but it is no such thing. Let me emphasize this. We cannot measure the actual effects of stimulus spending, and we do not know in any scientific sense whether it works or not. Numerous power-seeking academics and popularizers attempt to use a lot of math and pseudo-technical arguments to intimidate opponents, but in the end, that emperor is naked — they cannot provide and test relevant falsifiable theories.

I see obvious potential parallels between my global-warming and stimulus arguments. Many claim that the so-called science behind global warming is as speculative and untested as the so-called science behind various stimulus arguments. I don’t think that’s true. The fundamental distinction is the intervention of human mind: The atmosphere is a complex system, but next to the complexity of human society, it is a grain of sand next to Mount Everest.

Those who attack the physical science that supports global warming because they intuit that a (fantastical) global regime of carbon taxes and regulation is a bad idea are focused on the wrong failure of reasoning. Even if we accept every assertion produced by the U.N. Intergovernmental Panel on Climate Change as canonical and correct, it would not imply the political actions that environmentalists advocate. The key weakness of the arguments for cap-and-trade, carbon taxes, and all the rest is that they attempt to drape the mantle of scientific knowledge over assertions about human society — and that is the real parallel between the global-warming and stimulus debates.


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