Noam Scheiber of The New Republic writes:

Becker, Davis, and Murphy are political conservatives, and they badly want you to believe government intervention is counterproductive.

My understanding is that while Becker, Davis, and Murphy have a libertarian bent, they are not partisan Republicans. The clause that does work here is “badly want you to believe government is intervention is counterproductive,” which begs the question of how one should evaluate the work of, say, Paul Krugman or Brad DeLong, two scholars who are held in similarly high regard. One gathers that while Krugman and DeLong, and by extension Scheiber, are honest brokers, Becker, Davis, and Murphy “badly want you to believe” certain things. Of course, it could be that political views are not exogenous, and that Becker, Davis, and Murphy have developed certain policy biases on the basis of their scholarly work. I’d extend the same courtesy to Krugman or DeLong, though of course plenty of economists would push back.

Scheiber proceeds to offer a few interesting propositions.

They argue that health care “reform” (scare quotes theirs) is a job killer because businesses worry that new insurance mandates will raise labor costs. But couldn’t the logic run the other way? With health care costs rising five to ten percent each year, wouldn’t many businesses benefit from a reform that restrained medical inflation? And even if these businesses wouldn’t (or didn’t think they would), they must realize that such rapidly rising costs are unsustainable over the long-term. Shouldn’t business, so averse to uncertainty, prefer that the inevitable reform come sooner rather than later? (Though I’d certainly expect businesspeople, generally a conservative lot, to grumble while it was happening.)

Of course the logic could run the other way! It would help, though, if we were dealing with a different reform model. I guess the salient question is whether the Democratic health reform model really will restrain costs and reduce rather than increase labor market rigidities. A Medicare-for-All approach would have many downsides, but it would arguably reduce labor market rigidities and treat all firms fairly equally.

Ditto for cap-and-trade, which the Chicago schoolers insist will “surely discourage investments in refineries, power plants, factories and other businesses that are big emitters of greenhouse gases.” But there is a vast scientific consensus that greenhouse gases are warming the earth to unsustainable levels. Clearly the political system is going to respond to this looming catastrophe sooner or later. Wouldn’t the prospective builder of a power plant, an investment whose lifetime spans several years if not decades, want to know as soon as possible whether the plant will be profitable under the eventual gas-reducing regime? The alternative to some short-term uncertainty is several more years of political limbo before the inevitable reform passes anyway.

This is also interesting. Another possibility is that a gas-reducing regime of the kind Scheiber has in mind is not inevitable, not least because of the costs involved, the international regulatory landscape, the coming crunch in refining and generating capacity, etc. Scheiber is right as to the vast scientific consensus, yet there remains considerable disagreement regarding the likely impact of different carbon pricing regimes, not least because China, India, and other emerging economies have already made heavy bets on coal-fired generation. Other approaches that do not discourage the aforementioned investments could include heavier emphasis on air-capture technologies and investments in small and medium-sized nuclear reactors, or improving the regulatory regime so that we can facilitate efficiency measures that, as the always excellent Brad Plumer described in The New Republic, are currently illegal.

Even taxes, that great conservative hobbyhorse, are hardly so clear cut. Becker et al complain that Obama’s plan to “increase greatly marginal tax rates for higher incomes” is stalling the recovery by creating uncertainty and risk. Set aside the dodgy economic logic employed here (higher-income people consume only a small fraction of their income, so raising taxes shouldn’t affect their consumption much). Wouldn’t the uncertainty argument apply to a prospective tax cut in the same way it applies to a prospective hike? If a president came into office promising a tax cut, rich people—at least the subset who base their spending decisions on income taxes—might sit on their wallets until it actually passed, thereby depressing consumption. Alas, I’m not holding my breath for Becker et al to condemn tax cuts.

I’m puzzled by Scheiber’s emphasis on consumption. One assumes that work incentives play some role in generating sustainable economic growth. Also, Becker et al have been critical of unfunded tax cuts. But I’m sure I’m missing something.

One might suggest that because Scheiber is a political liberal and a partisan Democrat, he badly wants you to believe that the Obama White House’s government interventions are harmless. That doesn’t seem very sensible or fair to me.

P.S. One thing that saddens me is that Kevin Murphy has a reputation as an extremely generous and intellectually honest colleague. In any academic department, you have scholars who devote themselves primarily to enhancing their own reputation. In a lucky few, there are also scholars who serve as “public goods providers,” i.e., scholars who dedicate considerable time and effort to improving the work of their graduate students and colleagues that could be spent burnishing their own credentials. Murphy is one of those scholars, and he hardly limits his generosity to people who share his skepticism regarding the competence of central planners — quite the opposite. The idea that Murphy is an anti-Obama propagandist or reflexive partisan Republican seems unusually wrongheaded to me, even by the standards of the blogosphere. I’m curious as to what Austan Goolsbee thinks of Murphy.

It’s worth noting that the Obama economic team reaches out to academic critics, and my sense is that subtle changes in the jobs tax credit that was recently floated suggests constructive input from free-market economists at Chicago. As to why critics of the Obama administration would take the time to do this, well, one that is that they badly want you to believe that they have the interests of the country in mind.