They published a paper that claimed they ran analysis X. Reviewers look at it, and believed them, because we usually don't assume that people are lying. And it's hard to read over every line of code and compare it to the paper to make sure they did run the analysis they claimed.
But in reality, they did a totally different analysis. They hid data, they fudged data, they inserted weighting factors into the analysis. And they never mentioned in this in the paper.
In the article, they claim this was justified.
But hiding the true nature of the analysis they did was not. That hiding, of making the paper read one way but the code another, is plan and simple scientific fraud.
If what they believed in reality is that the code is correct, and that's the better analysis, then they should have just reported in the paper. The reason they didn't, is because reviewers would have looked at it and said that this is unacceptable and doesn't meet basic scientific standards. So they lied.
This is complete nonsense. The paper was published in 2010.
The principle of fiscal austerity for EU member states was enshrined in the Maastricht Treaty of 1992 (Article 104) and the accompanying Protocol No 20 on the excessive deficit procedure. [1]
> The reference values referred to in Article 104(2) of this Treaty are:
> — 3 % for the ratio of the planned or actual government deficit to gross domestic product at market prices;
> — 60 % for the ratio of government debt to gross domestic product at market prices.
In fact R&R cite the Maastricht Treaty as the source of the 60% magic number in their paper!
These numbers were basically pulled out of thin air by a French civil servant in 1981. [2]
That is how government policy is actually decided. Not based on an academic paper published 20–30 years after the fact.
[1] https://eur-lex.europa.eu/eli/treaty/tec_1997/oj
[2] https://openeuropeblog.blogspot.com/2014/01/from-archives-st...
These are not hard ceilings. God does not descent from the heavens and smite your country when you go over them.
Virtually every EU country has gone over these ceilings routinely. Germany is above the 3% mark right now, and has routinely exceeded it!
Heck, the average deficit to GDP ratio in the EU is above 3! https://ec.europa.eu/eurostat/web/products-euro-indicators/w...
These are aspirations to be applied as needed, not a proscription for austerity. The behavior of the ECB, the European Central Bank, is what matters. And that's a political and economic decision made with essentially a free hand (given that it has only one legal goal).
Austerity is an economic and political choice. No mechanism in the EU forces it.
I read it as an argument for a causal chain of 2 professors => paper => Greece elects far right. A few problems with this:
1. Paper came far after the idea of cutting government spending, so causation is wrong off the bat, as OP gently pointed out.
2. The aspect of the treaty doesn't have a clear enforcement mechanism, yes. However, it was a major part of many countries actions at the time.[1]
3. "What are they going to do, kick me out?" doesn't obviate rules without a clear enforcement mechanism.
4. It's unclear why Greece electing a far right party at some point in the 2010s is enough to motivate the argument, it has a liberal technocratic government and has turned things around substantially, in fact, recent elections delivered an unexpectedly wide reelection victory.
[1] To wit, that's why the Greece stuff took O(years) to resolve. To wit, recently, it was shared that Merkle _broke down crying_ when she felt she was being bullied into enabling violations of it.
n.b. On a personal note, I found the tone you're adopting surprising and not the conduct I'm familiar with after 14 years on HN. What stood out was making personal attacks in response to innocuous comments by interluctors, and the aggressive insistence that they don't understand -- dang has a wonderful shibboleth, "come with curiosity", and I don't see that here. I see someone berating other people for engaging at all because it feels like they're questioning you. If it's the case you are 100% wedded to the idea two Harvard professors created "austerity", it's not worth saying anything at all, it's ill-defined and there's a 1000 ways to read "austerity", 999 of them may conflict with however you are internally defining it.
> 1. Paper came far after the idea of cutting government spending, so causation is wrong off the bat, as OP gently pointed out.
This just isn't true.
The Greek crisis started in 2009, the paper came out in Jan 2010, harsh austerity measures were imposed on Greece in May 2010 by the EC/ECB and then they just kept coming for years on end. The timeline works perfectly and the EC/ECB had not imposed such measures before.
https://en.wikipedia.org/wiki/European_debt_crisis
> 2. The aspect of the treaty doesn't have a clear enforcement mechanism, yes. However, it was a major part of many countries actions at the time.[1] > > 3. "What are they going to do, kick me out?" doesn't obviate rules without a clear enforcement mechanism.
Let's talk about 2 and 3 at the same time.
This just isn't how the EU works. And it isn't how laws work. Laws don't rely on a strict interpretation of a text. Laws are not computer programs.
When someone says something is a "rule", they mean that it is a principle that must be followed "one of a set of explicit or understood regulations or principles governing conduct within a particular activity or sphere."
The 3% is not a rule. The EC does not see it as such. The member governments who routinely go over the 3% level don't see it as such. It's misleading to call it a rule.
If you really want to know how it works, you could start with https://en.wikipedia.org/wiki/Sixpack_(EU_law)
The Stability and Growth Pact (SPG) is the official mechanism for dealing with this. At the moment the SPG is suspended wholesale.
Never in its history has the SPG ever imposed sanctions on any country for violating the 3% deficit to GDP ratio. It would be unthinkable for it to do so. Germany and a few other countries have been trying to reform the system for a long time to give the SPG teeth and turn that 3% level into an actual rule, but without any success.
These are not rules. If you want to call them that, you're misleading yourself and any reader.
> 4. It's unclear why Greece electing a far right party at some point in the 2010s is enough to motivate the argument, it has a liberal technocratic government and has turned things around substantially, in fact, recent elections delivered an unexpectedly wide reelection victory.
I said that austerity led to the far right getting elected into parliament. Which Golden Dawn did, and far right parties continue to win seats even today at lower levels. I'm not sure what this argues? That Greece is not a fascist state today? I never said that.
https://en.wikipedia.org/wiki/Golden_Dawn_(Greece)
> n.b. On a personal note, I found the tone you're adopting surprising and not the conduct I'm familiar with after 14 years on HN. What stood out was making personal attacks in response to innocuous comments by interluctors, and the aggressive insistence that they don't understand -- dang has a wonderful shibboleth, "come with curiosity", and I don't see that here. I see someone berating other people for engaging at all because it feels like they're questioning you. If it's the case you are 100% wedded to the idea two Harvard professors created "austerity", it's not worth saying anything at all, it's ill-defined and there's a 1000 ways to read "austerity", 999 of them may conflict with however you are internally defining it.
I never said they created austerity.
On a personal note, I find the contempt for facts and scholarship on HN quite amazing. All of this information is available on Wikipedia. From the timeline, to the fact that the EU does not consider this a binding rule, to Golden Dawn getting elected as a consequence of austerity. To the fact that I'm not "internally defining" austerity, it's an actual field of study in economics.
"come with curiosity", and I don't see that here ~> On this we agree. Curiosity would involve a quest to find out what the truth is.
Greece had not asked them for a bailout before.
Those measures were a condition of the Troika (IMF/EC/ECB) bailout. And the IMF has a long history of imposing similar conditions, dating back to at least the 1970s. The conditions where straight out of their playbook.
There was an IMF intervention in Portugal in the 1970s, and here [1] is what they had to say about conditionality. Sounds familiar?
> it was accepted that the stabilization program would need to include quantitative limits on domestic credit expansion and on increases in credit to the Government, if it was to be supported by a stand-by arrangement. These limits would, it was hoped, make certain that total expenditure would be kept within the overall resource constraint. Policy changes strong enough to give reasonable assurance that the public sector deficit would be reduced had to be put in place.
[1] https://www.elibrary.imf.org/view/journals/022/0018/003/arti...
Greece was free to not borrow money and go bankrupt instead. That would also have led to austerity but in a much more chaotic way.
You're the one calling out only one side for tone and in very dismissive manner. Ironically you are doing the exact thing you accuse light_hue of and should probably take your own good advice.
Austerity is simple math. When you borrow too much, you get squeezed later.
Unless you subscribe to Magical Monetary Thinking.
There is a book from Clara Mattei, The Capital Order (https://press.uchicago.edu/ucp/books/book/chicago/C/bo181707...), which explains they were not the first, and probably are not the last.
There is no one in the economics profession who thinks Reinhardt or Rogoff deliberately made that error bc they had something personal at stake in convincing policymakers that austerity policies were the right outcome. Quite unlike the cases of ariely or gino or various others.
They made an embarrassing error but ultimately it was a coding error.
To be clear: it is an embarrassing error. Everyone also thinks this. They have been dragged for it quite a bit. But it was not deliberate.
In terms of the “total loss of credibility” … the fraction of empirical papers with some coding error approaches 1. The question is how bad it is.
They did 3 things in that paper. One of them they have called a coding error. Ok.
Two of the 3 were intentional. They intentionally omitted date ranges for some countries. And they weighted countries differently. This they admit to. And they defend.
Yet, nowhere in the manuscript does it say that in order to get these results you must apply weights to the data and you must leave out some inconvenient data points.
I can make up any argument for anything that I feel like if I start to apply weights to the data designed to make my argument work. They failed the most basic of scientific ethical standards.
The bar for being accused is so incredibly high. People are given so many possible outs and are allowed to produce the most implausible explanations. And then, even having one or two faked papers basically has no impact.
Here's an example.
Ken Rogoff and Carmen Reinhart. Professors at Harvard. Despite having faked the paper that introduced austerity to the world, had an immense impact on the economy, and caused massive and needless suffering for hundreds of millions of people. That paper still continues to haunt countries today. To make their paper work they had to lie 3 times: to exclude some countries, exclude data from others selectively, and reweight all of the data. None of this is reported in their paper! Each of these took deliberate actions on their part, they cannot be mistakes. Every single "mistake" they made is carefully calculated to produce the result they want. Every one of them is needed otherwise their paper would be junk.
What happened to them? Well, Reinhart has been promoted to the Chief Economist of the World Bank and is still a professor at Harvard. Rogoff is still a professor at Harvard too. Their faked paper literally resulted in deaths, toppled governments, and the rise of the alt right in places like Greece.
But they got a promotion for it.
The only people who are afraid are the people who are faking their data. No real scientist is getting accused of anything here.