Today we discuss economic predictions: he who makes the best predictions has the best model. The predictions I make are based this tweet:
126 economists wrote that the Inflation Reduction Act would lower costs for families, set the stage for strong economic growth, and tackle the climate crisis.
Send it to my desk. pic.twitter.com/nZpIpBFgj7
— Joe Biden (@JoeBiden) August 2, 2022
We have been told that the 126 leading economists—didn’t we meet top scientists yesterday?—who signed this letter include “seven Nobel Prize winners.” It’s not clear what this “Nobel Prize” is, but given the track record of leading economists, it’s not likely to be a mark of distinction.
The letter begins:
We write to strongly urge you and your colleagues in Congress to swiftly pass the Inflation Reduction Act of 2022. This historic legislation makes crucial investments in energy, health care, and in shoring up the nation’s tax system. These investments will fight inflation and lower costs for American families while setting the stage for strong, stable, and broadly-shared long-term economic growth.
The letter is a series of predictions of the good things this Act would bring. Here, then, are the things I instead think would happen.
The Inflation Reduction Act of 2022 is a bill which will likely to increase inflation, and will lead to a weak, volatile economy which will benefit only a narrow group. Plus, your taxes will increase.
“Investments” means taking your money and giving it to rich people. Whenever the government “fights” anything, the thing fought against is either gay or does not need “fighting” against. The real thing to fight against is government itself. But it’s unlikely we’ll see politicians punching themselves in the face.
The letter continues:
This legislation represents the single biggest step to date in tackling the climate crisis. It makes key investments to incentivize the transition to cleaner energy sources and greater efficiency. It also invests in the current energy distribution system to make it more resilient, lowers energy costs for families, and helps protect U.S. family budgets against future shocks.
There is no “climate crisis”, so there are only two possibilities. The Noble Prize winners and other signers are (a) willing to lie, or (b) ignorant. I mean “ignorant” in the neutral sense, such as I, Yours Truly, am ignorant of the type of ink used in Peruvian stamps. Both lying and ignorance are surely true, but in what proportion we are uncertain. Academics are prone to accept without question the work of academics in other fields, so ignorance likely holds for a majority of the signers.
“To incentive” means to create regulations which add layers of bureaucracy, which increases costs to suppliers and you. But it also is meant to punish smaller companies, i.e. those who cannot donate as much as large companies who can afford the lobbyists to write the new regulations. The Act will also lead to fewer innovations in energy.
Your energy costs will rise a significant amount, and we will be blighted by more inefficient and ugly solar and wind power plants, which are on the whole silly, but which are lucrative for those selling them to government.
The letter continues:
This legislation will quickly and noticeably bring down health care costs for families. It allows Medicare to negotiate lower prices with pharmaceutical companies, reduces Medicare out-of-pocket costs for drugs, and reduces insurance costs for 13 million Americans by building on provisions in the Affordable Care Act.
Translation: your healthcare costs will increase. Large pharmaceuticals will broker exclusive deals with government, enriching stockholders, of which nearly all Congresscreatures are.
Insurance costs will also increase, because “insurance” does not mean “insurance”—which is a bet you make you hope you don’t win—and instead means mandatory healthcare, which has to be paid for by somebody. You.
The letter continues:
These investments would be more than fully paid for. The revenue raised to finance them would come exclusively from wealthy individuals and corporations. Further, the revenue stems from enhanced tax enforcement and closing some of the most distortionary loopholes in the tax code.
The new deficient spending (“investments”) will increase the deficit. Taxes will rise, and the greatest share will be paid by you, not the rich, who will win exceptions for various reasons. These will not be called loop holes, but direct legislative gifts, such as paying the rich to build more windmills.
The letter ends:
This proposal addresses some of the country’s biggest challenges at a significant scale. And because it is deficit-reducing, it does so while putting downward pressure on inflation. We strongly recommend Congress act decisively to build a stronger economy by passing the Inflation Reduction Act as soon as possible.
The proposal addresses none of the country’s biggest challenges. It is deficit-increasing, and will put upward pressure on inflation.
Congress, if it signs, will build a weaker economy, more dependent on government and Experts than ever.
Well, we have two sets of predictions based on the same Act. If it is passed, we will see who is right and who wrong. Whoever is wrong must abandon their model (and theory).
Update HA!
Inflation Reduction Act drops most of Biden’s proposals to tax the rich https://t.co/lxFdLedlBU pic.twitter.com/aLvfO4Af3B
— The Hill (@thehill) August 4, 2022
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It’s so tiresomely easy to understand. Whatever they say, the opposite is the truth.
War is peace
Freedom is slavery
Ignornace is strength
“Well, we have two sets of predictions based on the same Act. If it is passed, we will see who is right and who wrong. Whoever is wrong must abandon their model (and theory). ”
– unfortunately, abandoning models and theories is rarely the consequence of being wrong. What is far more common is doubling down on models and theories. “Our regulations backfired not because they’re wrong, but because we didn’t impose ENOUGH regulations – we need more!”. “Communism didn’t work because governments weren’t communist ENOUGH – we’ll impose more communism, and create a workers’ paradise!”.
One would hope that these leading economists are better at predicting the future than at mastering the somewhat simpler art of English language grammar. They write:
thus blatantly splitting an infinitive. We know this is not inadvertent because in the next sentence they write:
Later, they employ the neologism
rather than “increase incentives” and the awkward
. (All loopholes distort the structure of an Act.
But we notice that all glory, laud, and honor are shed not on the actual provisions of the Act but on the hoped-for consequences thereof. This sort of soothsaying is become common. All they had to do was ignore the historical fact that dumping large sums of money into a stagnant economy always (as in “every time”) increases inflation and say, “this time it will be different.”
And price controls, whether on medicines, gasoline, or apartment rents in NYC, always result in price increases and/or shortages. This was as true of Diocletian’s price controls in the 3rd Century or Nixon’s in the gas ‘crisis’ of the 20th as it will be of Biden’s in the current crises du jour.
The so-called renewables provide something like 3% of all energy so if the govt takes more of our money and gives it to Gore and the Gang we may soon have about 4% of an unreliable renewable source of energy but a, roughly, 14% increase in positive feelings about ourselves because we are part of the solution to an imagined crisis.
Krugmanites rejoice, we have met the saviors and they are us.
Their list looks like 126 leading Esquimeaux with some flunkie padding. A usurious, exploitative, and parasitic financial system is the source of their illegitimate power. It funds all the corruption and lies that sway weak and sinful men. Ban usury, end the Fed, reform banking. Expatriate dual-citizens and ban the practice. Prohibit male circumcision; anyone convicted of foreskin removal to have their nose removed. But then I can’t decide if we should ban organized Protestantism or Catholicism, or both, in the new Christian Republic.
I haven’t read the full post, so bear with me…
Are these 126 “top economists” anything like (or related to) the 51 former intelligence official claiming Hunter Biden’s laptop was a Russian disinformation scheme?
Such letters, petitions, declarations are so specific, so dispositive of the subject matter that no hedge or caution is necessary, as to beggar belief. Few such certainties exist in life short of death and taxes–except now, the public relations spin given to any politically-motivated policy.
A couple additional points, triggered by comments above…
1) Paul Krugman is NOT a signatory (surprisingly!)
2) There is one, count ’em, one private sector signatory: Mark Zandi of Moody’s Analytics. (And he’s a clown!)
3) All the so-called economists are academics or academic-affiliated. (Exceptions in #4.)
4) A handful are from the Economic Policy Institute, a Marxist/socialist ‘think tank.’
5) Solow (98 y/o), Stiglitz, and Diamond are the Nobel Memorial Prize in Economics winners.
6) Perhaps surprisingly, George Akerlof, another Nobel winner, and Janet Yellen’s husband is not a signatory.
Poor economist: “The numbers say this.”
Average economist: “I have no idea what the numbers say. Let’s hedge our bets and be vague.”
Rich economist: “What do you want the numbers to say?”
Briggs wrote: “There is no “climate crisis” …”
Ha! but there is, and I have proof. The first is Leonardo DeCrapio. Here’s what he says (2016 Oscars):
“Climate change is real, it is happening right now. It is the most urgent threat facing our entire species …”
And this is what he does; he vacations on Vala II (a Superyacht).
“The luxury yacht reportedly emits as much carbon from sailing seven miles as an average car produces all … year. ”
To which Brazilian President Bolsanaro wrote on Twitter “You again, Leo? … I could tell you, again, to give up your yacht … but I know progressives: you want to change the entire world but never yourselves”
Or other “Climate Activists” like Taylor Swift, Oprah Winfrey and Steven Spielberg who are now being called “Carbon criminals”, or “Carbon Queens” etc. LOL. Swift was identified by The Yard as the celebrity with the largest carbon footprint; her private jet alone is estimated to have emitted “8,293.54 tonnes … 1,184.8 times more than the average person’s total annual emissions.”
Bill Gates is not a celebrity (yet; he’s trying hard though) but his stance on climate is impressive; from Newsweek (2021):
The Microsoft co-founder said during an interview with Fox News (Chris Wallace) … that the world needed to bring the amount of emissions from the current amount of 51 billion tons to zero in the next 30 years or there will be severe consequences.
Gates was on the television show to promote his new book, “How to Avoid a Climate Disaster”…
“How do you answer people who say ‘well, who is Bill Gates to preach to us?” Wallace questioned, to which Gates appeared to suggest the stance was “absolutely right” but noted he takes steps to make up for his personal carbon footprint via his work.
Gates elaborated: “I am offsetting my carbon emissions by buying clean aviation fuel and funding carbon capture and funding low cost housing projects to use electricity instead of natural gas …” yada yada yada.
There is a climate crisis, most definitely. The crisis can be defined thusly: the “Climate of Hypocrisy” that can be found among the uber wealthy and elite celebrity “do as I say not as I do” crowd.
Are you bristling yet? I am.
John Pate-
It is indeed all so tiresome:
https://youtu.be/ZOfql4OWTng
After the Gore and Obama Nobel prizes, the award means nothing. They give them out in cereal boxes.
Any proposal that transfers money from your pocket to the government is good policy, by definition.
Consider:
You are, at best, ignorant. Far from being an Expert. And probably are doing all kinds of things with your money that Experts would not do. It is clear, therefore, that you retaining spending control of your money is bad policy as it yields bad results.
Conversely, transferring your money to the Government, which contains nothing but Experts will yield nothing but good results, as per the Experts, and therefore must be good policy.
Of course 126 idiots signed the letter. The only real mystery is that it was only 126.
I am led to understand that part of this miracle bill is to provide money to construct charging stations for our electric cars. Since I never heard of the Feds building us gas stations I have to question the process. Do we get free charges? Do the Feds operate these stations as for profit reducing their deficit? Will the Feds provide the power to these stations or will that come from the existing grid? Just curious.
People have gamed lists of big numbers for years. Most people here are probably familiar with that 97% consensus on AGW claim. You’re probably already at least a little aware of why it is fallacious (short story is basically using an extremely broad definition of “support” for AGW, really anything that mentioned climate change even incidentally, and going by papers to allow those with large publication histories to pump the numerator.)
Petitions are even easier to pump. Once it gets past 20 or so people, most people are not going to check the credentials of those on the list. So you just get any warm body to sign. If it is at the highest levels you might restrict yourself to only those tenured in accredited academic institutions, but many similar things haven’t even bothered with that. Whenever you see a letter signed by four digits or more of “scientists” you can bet that the list will have tons of “PhD Candidate”s on it. Often you’ll also get undergraduate students, museum curators, high school teachers, etc. And they generally will not be picky about the discipline: even if it is something to do with climatology expect to see signers in Chemistry, Astronomy, various Social Sciences, Law Professors, Theologians, Veterinarians, etc. Every name adds to the count.
The establishment will point this all out when the conclusion is wrong. For example, there’s a petition about scientists rejecting global warming claims with over 30,000 signatures. You can find all sorts of articles talking about how this is invalid since it didn’t verify the identities of the signers, only asked for an undergraduate degree, didn’t require a degree in fields related to climatology, etc. etc. etc. But the second you say the same things regarding a petition supporting an approved narrative, you will be just told that you “don’t trust the science.”
If they want to reduce carbon why does the government have an open border policy?
Wouldn’t “improving” the life of the third world by letting them flood into the first world increase the carbon footprint of the U.S.
And this process of open borders…wouldn’t it put more pressure on those already doing it tough in the U.S?
So what is the real purpose of the bill?
And who is going to protect all these billions the one percentage are amassing…are you going to fight for them?
Maybe these useless bits of legislation is to give some archival material for those left to write about what jolly good chaps those who ran the world at the time really were?
The purpose of this bill is helping “friends” and punishing “enemies”, where the people referenced may change as needed.
From Robin above…
–>Gates elaborated: “I am offsetting my carbon emissions by buying clean aviation fuel and funding carbon capture and funding low cost housing projects to use electricity instead of natural gas …”
**Funding low cost housing projects to use electricity instead of natural gas** And where does electricity come from???? Electricity is not an energy source. Electricity is the means to transmit & distribute energy.
Gates is laughable…
How much calamity has been added to the climate through all those weapons they give the crazy ukies to fire aimlessly? I was reading that the western gub’mint people are complaining that the ukies are being too rough and tough with their fancy gifted new weapons and are using them too much… What I ask you is, what good’s a gun that get too tired out doing what it’s supposed to do? When did the guns get so lazy after being overspecced that they need to be carried delicately like a ballerina into battle? The ukies should just ask the westaboos for cash and buy Russian weapons with it.
Take heart, Briggs!
“A letter [dated August 3rd] sent to House and Senate leadership from 230 economists argues that the Inflation Reduction Act is expected to contribute to skyrocketing inflation and will burden the U.S. economy, contrary to President Biden and Democrats’ claims.”
[Because these contrary economists are right in the wrong direction, they do not get to be called “leading” economists, let alone “experts”…they’re just “economists”, the dismal profession; but what they lack in prestige, they make up for in numbers: almost twice as many signatories as the cheerleaders on the other side]:
“The economists wrote in the letter first obtained by Fox News Digital that the U.S. economy is at a “dangerous crossroads” and the “inaptly named ‘Inflation Reduction Act of 2022’ would do nothing of the sort and instead would perpetuate the same fiscal policy errors that have helped precipitate the current troubling economic climate.
“A few of the notable signers include Nobel laureate Vernon Smith, former Chair of the Council of Economic Advisers Kevin Hassett, former Director of the Office of Management and Budget Jim Miller and Robert Heller, former president of the Federal Reserve Board 1986-1989.
“In addition, professors from the University of Chicago, Princeton University, Duke University, the University of Virginia, Columbia University and the University of Notre Dame, among others, were listed on the letter dated Aug. 3. “
https://www.foxbusiness.com/politics/230-economists-warn-manchins-spending-bill-will-perpetuate-inflation