Austerity's Spreadsheet Error

  • Aired:  04/23/13
  •  | Views: 267,439

Carmen Reinhart and Kenneth Rogoff's 2010 debt study inspires austerity around the world, but grad student Thomas Herndon debunks the results. (7:43)

>> Stephen: RUT-ROH.

( CHEERS AND APPLAUSE ).

NATION, THANKS TO THE SEQUESTER,

IF YOU HAVE FLOWN IN THE LAST

COUPLE OF DAYS YOU MAY HAVE

NOTICED THAT YOU DIDN'T FLY IN

THE LAST COUPLE OF DAYS.

JIM?

>> STAFFING CUTS STARTED

YESTERDAY FOR AIR TRAFFIC

CONTROLLERS.

>> HERE COMES MAXIMUM PAIN.

AIR TRAVELERS, LISTEN UP.

YOUR CHANCES OF A FLIGHT DELAY

JUST WENT UP.

>> FEDERAL BUDGET CUTS ARE NOW

HITTING AIR TRAFFIC CONTROLLERS.

THEY ARE BEING FORCED TO TAKE

EXTRA DAYS OFF.

>> ABOUT 400 FLIGHTS WERE

DELAYED BECAUSE OF THESE

FURLOUGHS.

>> PASSENGERS HAVE BEEN BOARDING

ON TIME BUT WAIT UP TO THREE

HOURS FOR THEIR FLIGHTS TO TAKE

OFF.

>> Stephen: OH, YES, THE

SEQUESTER CHICKENS HAVE COME

HOME TO ROOST.

OR THEY WOULD HAVE HAVE IF THEY

COULD GET CLEARANCE TO TAKE OFF.

BUT WE'VE GOT NO CHOICE, FOLKS.

IN BAD TIMES, YOU HAVE TO SLASH

GOVERNMENT SPHENDING.

AND I DON'T NEED SOME FANCY IVY

LEAGUE PAPER TO TELL ME THAT.

BECAUSE THERE'S ALREADY A FANCY

IVY LEAGUE PAPER TO TELL ME

THAT.

THE FAMOUS 2010 STUDY "GROWTH IN

A TIME OF DEBT" BY HARVARD

ECONOMISTS KEN ROGOFF AND CAR

MEN REINHART.

YOU'VE GOT TO THINK HARVARD

ECONOMISTS UNDERSTAND DEBT.

ALMOST AS MUCH AS HARVARD

GRADUATES.

SO IT'S NO SURPRISE THAT FISCAL

CONSERVATIVES ALL YES ROGOFF AND

REINHART TO MAKE THE CASE FOR

DRASTIC BUDGET CUTS.

>> I HAD ALWAYS HEARD IF IT GETS

TO 90% THAT'S A TIPPING POINT.

THAT'S WHEN ECONOMIC GROWTH

STARTS TO SLOW.

ROGOFF AND REINHART SHOWED THAT.

>> IF YOU LOOK AT ROGOFF AND

REINHART, WHAT THEY SAY, YOU

HAVE TO CONSIDER GROSS DEBT

WHERE OVER 100%.

>> ECONOMISTS WHO HAVE STUDIED

SOVEREIGN DEBT TELL US THAT

LETTING TOTAL DEBT RISE ABOVE

90% OF G.D.P. CREATES A DRAG ON

ECONOMIC GROWTH AND INTENSIFIES

THE RISK OF A DEBT-FUELED

ECONOMIC CRISIS.

>> Stephen: YES A DEBT-FUELED

ECONOMIC CRISIS.

THAT WOULD PLUNGE US INTO

ANOTHER GREAT DEPRESSION.

AND DRAG THE ENTIRE WORLD DOWN

WITH IT.

NOT ONLY, NOT ONLY HAS CONGRESS

BEEN INSPIRED BY ROGAINE AND

BRAVEHEART'S MATH, THEIR WORK

HAS INFLUENCED INTERNATIONAL

BUDGET SLASHERS LIKE E.U.

ECONOMICS COMMISSIONER OLLI

REHN, FORMER EUROPEAN CENTRAL

BANK PRESIDENT JEAN-CLAUDE

TRICHET, BUNDESBANK PRESIDENT

JENS WEIDMANN AND LORD LAMONT OF

LERWICK WHO IS NOT ONLY THE

FORMER CHANCELLOR OF THE

EXCHEQUER FOR THE UNITED KINGDOM

BUT GETS KILLED BY LARRY MARY IN

THE NEXT SEASON OF DOWN TON

ANDY.

OF COURSE, THE LEFT WING IVORY

TOWER ACADEMIA-HOLES OUT THERE

COULDN'T STAND THAT

CONSERVATIVES LIKE CROCKETT AND

TUBBS HERE WERE RIGHT SO THEY

PROVED THEM WRONG.

>> THE ECONOMIC THEORY

UNDERPINNING AUSTERITY POLICIES

BEING FOLLOWED BY GOVERNMENTS

WORLDWIDE MAY BE FLAWED.

THAT IS THE ALLEGATION MADE IN A

STUDY BY THE UNIVERSITY OF

MASSACHUSETTS.

IT CLAIMS TO HAVE FOUND CODING

ERRORS ON THE EXCEL SPREADSHEET

USED BY THE ACADEMICS WHO HAVE

PRODUCED THE THEORY WHICH COULD

INVALIDATE THEIR CONCLUSIONS.

>> Stephen: THE UNIVERSITY OF

MASSACHUSETTS FOUND CODING

ERRORS THAT INVALIDATE

CONCLUSIONS.

NERRRRDS!

I BET YOU FOUND THEM ON A FRIDAY

NIGHT WITH YOUR MOM.

WHILE THE REST OF US WERE GOING

UP TO THE POINT AND DRINKING

P.B.R.

I PUKED IN DAVE CON ROY'S GLOVE

COMPARTMENT.

IT WAS A GOOD TIME.

AND JUST LOOK AT THE POINDEXTER

WHO CAUGHT THE MISTAKES.

THOMAS HERNDON WHO REVIEWED

THEIR DATA AND IMMEDIATELY

SPOTTED A BASIC SPREADSHEET

ERROR AND THAT THEY HAD EXCLUDED

DATA FROM CANADA, NEW ZEALAND,

AUSTRALIA ALL COUNTRIES THAT ARE

EXPERIENCED SOLID GROWTH DURING

PERIODS OF HIGH DEBT AND WOULD

THUS UNDERCUT THEIR THESIS.

IF IGNORING NEW ZEALAND,

AUSTRALIA AND CANADA WERE A

CRIME, EVERYONE IN AMERICA WOULD

BE ON DEATH ROW.

( CHEERS AND APPLAUSE ).

NOW SURE, HERNDON'S CORRECTED

SPREADSHEETS SHOW THAT COUNTRIES

WITH DEBT OVER 90% DID NOT SEE

THEIR ECONOMIES SHRINK MINUS

POINT-ONE PERCENT BUT INSTEAD

SAW THEM GROW 2.2%.

BUT COME ON, 2.2% UP, .1% DOWN,

YOU SAY POTATO, I SAY ELIMINATE

FOOD STAMPS.

FOR PETE'S SAKE, HOW WERE REN

AND STIMPY SUPPOSED TO KNOW THAT

THEIR PAPER, THEIR PAPER WHICH

HAS BROUGHT AUSTERITY TO

MILLIONS WAS FLAWED?

IT WASN'T PEER REVIEWED.

SO, NO ONE NEEDS TO FACT-CHECK

THEM.

IT'S NOT LIKE THEY SAID THEY

WERE WATCHING SCOOBY DOO WHEN

THEY WERE FOUR.

AFTER PUBLICATION IN 2010, ONE

ECONOMIST COMPLAINED THAT THEY

REFUSED TO SHARE THEIR DATA.

OF COURSE THEY DIDN'T SHARE

THEIR DATA.

IF THEY CAN'T USE EXCEL, I DOUBT

THEY COULD SEND IT AN EMAIL

ATTACHMENT.

BUT, FOLKS, SIEGFRIED AND ROY

ARE STANDING BY THEIR RESULTS

SAYING QUOTE THE WEIGHT OF THE

EVIDENCE TO DATE, INCLUDING THIS

LATEST COMMENT BY HERNDON, SEEMS

ENTIRELY CONSISTENT WITH OUR

ORIGINAL INTERPRETATION OF THE

DATA.

RIGHT.

ENTIRELY CONSISTENT WITH THEIR

INTERPRETATION BECAUSE NO MATTER

HOW MUCH THE RESULTS CHANGE, THE

HYPOTHESIS MUST REMAIN THE SAME.

THAT'S SCIENCE.

WELL, FOLKS, NOW THAT I KNOW

ACADEMIC PAPERS DON'T HAVE TO BE

ALL MATH-Y TO MAKE A GLOBAL

IMPACT, I'VE GOT SOME OF MY OWN

COMPLETELY UNSUPPORTED FINDINGS

I WOULD LIKE TO DROP.

FOR INSTANCE, HYDROFRACKING

MAKES YOUR ASS LOOK BETTER IN

JEANS.

CRUDE OIL: NATURE'S EGRET

MOISTURIZER.

AND HOLSTER V. BRA: HOW GUN

CONTROL CAUSES MAN LOOFER BOOBS.

HOW GUN CONTROL CAUSES MANBOOBS.

AND UNLIKE BANGER AND MASH, MY

STUDIES ARE PIER-REVIEWED IN

THAT I SHOWED THEM TO SOME SEA

GULLS ON A PIER.

AND I CAN SAY,.

( CHEERS AND APPLAUSE ).

AND I CAN SAY WITH ABSOLUTE

CERTAINTY THAT I DID NOT MAKE A

SINGLE ERROR IN MY EXCEL

SPREADSHEET BECAUSE FOR THESE

STUDIES I USED "ANGRY BIRDS STAR

WARS."

BOTTOM LINE, BARTLES & JAMES'

STUDY IS STILL VALID NO MATTER

WHAT SOME PUNK U-MASS AMHERST

E-CON GRAD STUDENT NAMED THOMAS

HERNDON SAYS.

AND WHEN WE RETURN, I WILL BE

JOINED BY PUNK-ASS AMHERST E-CON

GRAD STUDENT

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