Wednesday, October 15, 2008

The Wu retort

Man, this is killing me, but I have to say it: Wu is right again.
(This is inside baseball economics so feel free to skip to the bottom of this post.)
Greg Mankiw is a conservative economist. Like the vast majority of other conservative economists he made fun of the supply siders. Contrary to popular belief supply side economics (read: tax cuts for the rich raise tax revenue) is not endorsed by prominent conservative economists. See writings by Gary Becker, Milton Friedman, or pre-2002 Mankiw for details.
Mankiw has the most popular selling economics textbook of all time. In the first edition he made fun of supply siders calling them "charlatons and cranks". He accepted the position as Bush's advisor after the 2001 supply side tax cut. After he realized the administration had no interest in listening to economic advice he quit. Wu points out that he lost his integrity when he agreed to sign on to the Bush team and helped them justify another round of supply side cuts in 2003.
Mankiw removed the "charlatons and cranks" reference in his later editions. It would have been a terrible thing to say about himself.
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Spellman once had this to say about debating Wu:
"Never say Wu is right. If Wu is right say it was your idea all along."
Somewhere Spellman is shaking his head at me.

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