Will Wilkinson goes off (read the whole thing) on economics and those who claim to practice it. By his own admission, his rant is inspired more by frustration than by a calculating approach to the pros and cons of various schools of economic thought, but he has a point:
In the debate over economic stimulus, I hear many otherwise brilliant people making a lot of baseless conjectures about mass psychology — about consumer and creditor “fear” and “uncertainty,” and what to do about it. But, as far as I can tell, none of them has even a rudimentary theory about the causes of micro-fear or how it scales up to aggregate consumer demand or aggregrate credit supply, etc. So I feel like I’m hearing a lot of smart people talking out of their asses about a subject they’ve never actually studied –the psychology of coordinated expectations — and pretending it is “economics,” a subject with much greater rhetorical prestige and political power than amateur psychology.
If booms or recessions are really based in coordinated psychological changes, then why should we think that monetary or fiscal policy is the most relevant policy lever? If the thoughts and feelings of the population are the issue, then maybe the real problem is that the mass media are unduly scaring people. Wouldn’t it follow, then, that good economic policy would have at least as much to do with controlling the media as controlling the money supply? If the problem with handing Maria Bartiromo a script of state-mandated talking points is that it wouldn’t work, how do we know that?
That's all interesting, and whether vesting the brown eyes of CNBC's original Money Honey with the force of government is a good idea is debatable. But this is provocative:
If the problem with turning the entire media into a servant of state macroeconomic engineering is not that it wouldn’t work, but that it’s repulsively illiberal, then we ought to face up to it. This is something that's been running through my head for quite some time. I oppose much government intervention largely on the grounds that it is less effective than most voluntary or market-based measures, but even the stuff that makes sense on many levels (ie: military draft) rubs me seriously wrongly on the grounds that morality requires liberty and government action by definition reduces the liberty of the person being acted upon. Libertarians *might* be better served (or would at least be more idealogically consistent) begging off the entire idea of the efficacy of Government Action X and focusing instead of its illiberalness. This, come to think of it, is very similar to the torture debate, except the sides differ (torture: left = "it's wrong"; right = "gotta do it if it works";; economic regulation: left = "gotta do it if it works"; right = "it's wrong").
Might write more about this later.