Sunday, August 25, 2002

I didn't say a whole lot about the Brendan Nyhan vs. MWO flap, in part because some things are so silly on their own that they are hard to mock --- as, for instance, suggesting that right-wing liars like Coulter and Limbaugh, and a web site that exposes their lies, are morally equivalent because they both use strong language.

Strong language can be useful even when it's not explicitly partisan, as for instance, when Daniel Davies talks about economics:

The American consumer is pretty much all that's holding up the entire world economy at the moment. This is because final demand has to come from investment or consumption, and nobody appears to be in the mood to invest. Meanwhile, the Japanese don't care to (deflation and recession), the Europeans don't dare to (an ECB more worried about credibility than sensible anticyclical monetary policy), so mad dogs and Americans have to go down to the shopping mall.

Which wouldn't be a problem, except that, as far as we can tell, the American consumer is basically only still spending because he thinks that magic beans grown on the Internet will pay for everything. The strong suspicion is that when the Yanks look under the bed and discover that all of their magic Internet stock market money has turned back into rotting leaves, they're going to feel a little bit embarrased (and broke), and stop buying goods from Asia with money borrowed from Europe, a process which doesn't look like it would be enough to keep the world going but in fact is. And given that the stock market's been performing pretty badly these days, and is beginning to appear on the cover of USA today, lots of people are beginning to worry that the day of reckoning might be at hand. Which would obviously, leave us in the shit.

This is the doctrine of the "wealth effect", and if you can dig up a few factoids and linear regressions to illustrate it and avoid using the word "shit", you can make a quite decent living as a pundit by repeating the paragraph above. ...


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