If the past is anything to go by, this is probably the most powerful endorsement of the Trump presidency yet.
The letter writers are not socialists. Like all good economists, they know that free trade, free markets, sound money, and balanced budgets are generally a good idea. They also know, as good economists do, that politicians need to get involved now and again to keep the Good Ship Capitalism afloat.
That’s where things get tricky. Economists are out of their depth in thinking about the complex interaction of politics and economics. As a result, they tend to fall back on a simple rule of thumb: trust the government when it is run by center-left technocrats like themselves. If populists are involved, they stand in opposition even if the results would be good. They fail to see that populists of the right are often better stewards of the economy than center-left technocrats or populists of the left.
If the laureates had a better grasp of the difference between academic theory and policy practice, they would not have issued their silly letter. As an International Monetary Fund official noted in a sharp riposte to Stiglitz’s left-populist book Globalization and its Discontents of 2002: "Stiglitz evidently feels that being a top-notch academic economist is ample qualification for being a good policymaker. The fact is that Joe got a late start in policymaking and shows it."
This is not the first time Nobel economists have miscalculated by dabbling in politics. Back in 1997, during the heyday of the Clinton-Gore technocracy, a feisty Congress led by Republican party populists grew alarmed by the federal debt, which had doubled to 63 percent of GDP from a post-war low of 31 percent in 1981. A coterie of more than 1,000 economists, including 11 Nobel laureates, rushed out a joint statement calling a balanced budget proposal "unsound and unnecessary." In retrospect, the economists opposed what might have been the last chance to save the American economy from its current fiscal crisis.
Related:
Joseph Stiglitz 08/14/2022 U.S. Announces $30M to Empower Afghan Women
Joseph Stiglitz 04/07/2022 Nobel economists were dead wrong on inflation
Joseph Stiglitz 08/17/2016 Inequality Is a Distraction. The Real Issue Is Growth
Joseph Stiglitz 08/14/2022 U.S. Announces $30M to Empower Afghan Women
Joseph Stiglitz 04/07/2022 Nobel economists were dead wrong on inflation
Joseph Stiglitz 08/17/2016 Inequality Is a Distraction. The Real Issue Is Growth