I was going to blog about the Reinhart-Rogoff thesis this morning, but Paul Krugman not only beat me to it, he (unsurprisingly) said it better.
What–you aren’t familiar with Reinhart-Rogoff? The term is shorthand for a paper circulated by two Harvard economists, Reinhart and Rogoff, in 2010. (It evidently wasn’t even a peer reviewed article–just a working paper.) The paper purported “to identify a critical “threshold,” a tipping point, for government indebtedness. Once debt exceeds 90 percent of gross domestic product, they claimed, economic growth drops off sharply.”
The paper was immediately seized on by proponents of austerity, despite the fact that other economists criticized the methodology, and still others tried but couldn’t replicate the findings. It became the basis of policy decisions throughout Europe. It was a justification for Paul Ryan’s budget. And then, when the authors finally shared their calculations, it turned out that a coding error–in lay language, a mistake in their use of the Excel computer program–invalidated their results.
There is a moral to this story, and it has nothing to do with economics, or the importance of peer review, or the tendency of a Harvard pedigree to lend unearned credibility to a scholarly product. This fiasco is another example of a growing phenomenon: ideologically-driven choices of reality. In today’s America, too many of us read everything selectively; we comb the news for evidence that supports our pre-existing beliefs. We read the bible and the Constitution selectively, conveniently ignoring the parts that conflict with our worldviews. We dismiss evidence that confuses us. Ambiguity and complexity become enemies.
The problem is, the clarity we achieve with our chosen authorities often conflicts with messy, ambiguous reality. And that makes matters worse.