Unintended confessions of a public intellectual

One of the first essays I read on this first business day of the week and it is an unintended cracker.  From How Obama (and Trump and Biden) beat Europe by Matthew Yglesias.  The subheading is The growing transatlantic prosperity gap.  

Matthew Yglesias is one of the better of an awful, dramatically bad, bunch of left of center public intellectuals/pundits.  There is virtually no consequential topic on which they can not reach a rapid, detailed, vapid and wrong conclusion.  Yglesias is better than most because he includes more data in his analysis before reaching the wrong conclusion.  He is mired in an admiration of a Platonic world governed by philosopher kings.  In other words, he really wants central planning and authoritarian governance to be more effective than it is.  A bias reflected in the implication that the current prosperity gap between the US and Europe is due to Obama's policies.  That's cute.  

In this instance, Yglesias is acknowledging his failure to accurately understand the world in 2008 and why his personal expectations, his forecasts back then, were not realized.  And kudos for that humility.  It is an admirable and necessary trait to improve one's intellectual comprehension to understand what you get wrong.  

Fifteen years ago, I was pretty bullish on Europe.

It was poorer than the United States, yes, but a lot of that was more vacation time, which isn’t necessarily a bad thing. They had a more humane, seemingly more cost-effective health care sector. And with the expansion of the European Union and the forging of deeper economic ties among members, Europe was poised to reap the benefits of a large positive shock that would let them erode some of the advantages the United States enjoyed in terms of economies of scale.

Meanwhile, the United States had what seemed like much worse fiscal policy, running huge budget deficits with a very large chunk of that Bush-era deficit spending going to waste in Iraq and Afghanistan.

Those wars were linked to another critical weakness in the American political economy — our tremendous appetite for foreign oil. Many Americans had become profligate consumers of oil at a time when the United States was a huge oil-producing country, but our productive capacity had reached its presumed peak in the early ’70s and was thought to be in a state of terminal decline. China and India were growing more rapidly than any rich country possibly could, increasing their own consumption of petroleum in a way that was structurally increasing world prices and structurally worsening America’s terms of trade. This hurt Europe, too, but Europe made much greater strides in energy efficiency back in the 1970s and 1980s, leaving them better positioned to deal with the rise of the rest and the attendant commodity squeeze.

Today, those forecasts don’t look so good. As Gideon Rachman recently wrote in the Financial Times, “in 2008 the EU’s economy was somewhat larger than America’s: $16.2 trillion versus $14.7 trillion. By 2022, the US economy had grown to $25tn, whereas the EU and the UK together had only reached $19.8 trillion.”

Even among Europeans in 2008, there were many serious people massively concerned with the democracy deficit (little consent of the governed), the sclerotic labor markets, the focus on planned public spending rather than adaptive market responses, the impending demographic implosion and corresponding immigration issues, the failure of Europe to play a cohesive and proactive role on the global stage, the culture of planned decline, and the increasing obeisance of Europe to both Russia (gas) and China (trade).  

These were real issues then, discussed and measured fifteen years ago.  For those concerned about them, the past fifteen years have played out in roughly the fashion which they expected.  

Yglesias either was not party to those discussions back then or dismissed the data and the concerns.  Because he is acknowledging that he was wrong on virtually all of the issues.  

He gains brand credibility for the acknowledgment but the big question remains; is past prolog?  Is he now as wrong about the future as he was then.

Read his essay and make your own determination but to my eyes and ears, he seems as committed to his left of center, coercive, central planning worldview as ever and has as weak a grasp on measured realities and on the interpretation of the recent past as always.  

The ways in which he is wrong and the details by which he is wrong are actually the basis for a two or three day symposium of clear thinkers, good meals and drink, and civility.  There is a cornucopia of flawed worldviews, bad intellectual models, and poorly comprehended data and information wrapped in this short piece.  It is a great catalyst for discussion.

But as a testimonial for clear thinking and reality-based forecasting?  Not so much.