On the day that UK unemployment jumped 70,000 and one of the architects of that steady stream of unemployment and minimum wage slavery was buried, something else was buried too...
... the revelation that the academic paper that all austerity policies are based on - "Growth in a Time of Debt" by Ken Rogoff and Carmen Reinhart - is based on a fallacious and malicious analysis of the data.
Carmen Reinhart Contemplating The Children She Will Eat For Breakfast
"Sloppy statistics" according to Robert Harding in Wednesday's Financial Times.
Rogoff and Reinhart found that growth falls to a mean average of minus 0.1 per cent when public debt is greater than 90% of output.
But researchers at the University of Massachusetts, Amherst find a figure of plus 2.2% when repeating the analysis.
"Coding errors, selective exclusion of available data, and unconventional weighting of summary statistics led to serious errors that inaccurately represent the data between public debt and GDP growth."
"Unsupportable statistical techniques..."
Financial Times: "The Amherst researchers said that Ms Reinhart and Mr Rogoff had made an error in their spreadsheet, missed several years of data and then averaged their results in a way that put unusual weight on short episodes in particular countries."
Robert Pollin and Michael Ash: "The main policy plank is riddled with faults."
The original paper and the arbitrary nature both of the 90% threshold and the general manner that economic/econometric "science" is addressed show the ludicrous nature of depending on the dismal science to produce anything other than dismal science.
Although the pseudo-case for austerity doesn't solely depend on Rogoff and Reinhart, other supportive sources have also recently been discredited.
And Rogoff and Reinhart produced their propaganda in 2010...
... why has it taken three years for anyone to check the figures when global economic policy has been based on the austerity that the paper proposes?
Because Rogoff and Reinhart refused to release the data, that's why!
They were that confident of their analyses!!
Paul Krugman: "For the truth is that Reinhart-Rogoff faced substantial criticism from the start, and the controversy grew over time... many economists pointed out that a negative correlation between debt and economic performance need not mean that high debt causes low growth. It could be the other way around... (T)he Reinhart-Rogoff fiasco needs to be seen in the broader context of austerity mania: the obviously intense desire of policy makers, politicians and pundits across the Western world to turn their backs on the unemployed and instead use the economic crisis as an excuse to slash social programs."
We're either being run by entirely incompetent fools or by malicious psychopaths.
Incompetent Fool Or Malicious Psychopath? Too Busy Selling His Cheshire Estate Two Days Before High Speed Rail Route Announced To Notice That The "Intellectual" Authority Underpinning His Class War Perversion Was Of No Merit
A former professor of mine, Neville Topham, told me about a high level consultancy document that he had written showing that house prices increase more than average for properties directly under the flight paths at Heathrow Airport.
"You can show anything with data in economics" was the justification for his fee.
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