Laugh when the self-important fail in public

Folks, you simply cannot imagine how much pleasure I am taking from seeing Rogoff and Reinhart's Growth in the Time of Debt getting trashed on such a primal level.  This study smelled to high heaven when it was released in 2010.  The problem was, you could make fun of their errors in logic but to a third-party low-information bystander, whatever you said was just your opinion against a couple of big-league Harvard economics profs.  And so the Predator Class conventional wisdom just rolls over everything.  Rogoff and Reinhart not only convinced the usual suspects like Paul Ryan, but heavy hitters in the EU like Olli Rehn, the European Commissioner for Economic and Monetary Affairs and the Euro and vice president of the European Commission.

But this time, Rogoff and Reinhart really screwed up.  They stand exposed for cooking the books but even worse, making simple mistakes in an Excel spreadsheet.  Good grief, there are folks who use Excel to organize their grocery shopping.  This is a commonly used program.  Folks may not understand the nuances of macroeconomics but they know how to categorize folks who make high school level Excel errors.

So last night, Stephen Colbert held up Rogoff and Reinhart to some world-class ridicule.  They may be able to hold their own in an economics debate with Paul Krugman, but they will never recover from being turned into a national joke.  Colbert is very good at what he does and he was on his game last night—he was extremely funny!  See for yourself!


Update:  The financial markets are have a good day around the world.  I don't usually follow these things but someone who does, Art Cashin, seems to think it is because the Austerians have been turned into a joke.  He calls it the Reinhart / Rogoff Rebuttal Rally.

Tuesday April 23, 2013
Austerity's Spreadsheet Error
Carmen Reinhart and Kenneth Rogoff's 2010 debt study inspires austerity around the world, but grad student Thomas Herndon debunks the results.

The Colbert Report
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And here we have a pretty sweet interview with the guy who discovered that spreadsheet error.  Damn!  There may be hope for the economics profession yet.

Tuesday April 23, 2013
Austerity's Spreadsheet Error - Thomas Herndon
Graduate student Thomas Herndon identifies little staggering omissions in a prominent academic paper, Growth in a Time of Debt.

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