Sullivan quote from Mankiw:
The question for economists now is whether the administration’s assumptions, and the model based on them, were correct. After all, if we could be sure their model was right, we would know what to conclude when their stimulus plan was followed by 10% unemployment: The patient was sicker than they thought, and unemployment would surely have been higher still if not for the stimulus. (Indeed, since Obama’s advisors do believe their model was right, this is the conclusion they have reached.) The trouble is, we have no way of knowing for sure if the model was in fact correct. To react to a model’s failure to predict events accurately by insisting that the model was nonetheless right — as Obama’s economic advisors have done — is hardly the most obvious course. Careful economists should instead respond with humility. When their predictions fail — as they often do — they should not dig in their heels, but should instead be willing to go back to their starting assumptions and question their validity.
Mankiw seems to be confusing two groups of people and then drawing an illicit conclusion. I mean sure, if it’s true that “we have no way of knowing for sure if the model was in fact correct” then _economists qua economists_ should be “humble” and wonder if their basic assumptions were right, or if they simply misread the initial conditions of the practical application of their theory. But Mankiw’s not talking about “economists qua economists”. He’s talking about the President’s economic advisers, and they are part of a political team. In a political climate where even the slightest “humility” about basic assumptions would be met with a constant barrage of unrelenting attack segments on programs on FOX news and talk radio, you are left naturally scoffing at Mankiw’s ivory tower advice. Essentially, there’s a further “economic” variable at play here: the cost/benefit analysis of humility in a massively angry, divisive and partisan context. It’s easy to say what that calculation yielded: zero gain, total cost. Would I prefer a political climate where both sides have more economic humility? Sure, but where humility is read as weakness, don’t hold your breath.