In a nice bit of back-and-forth, 538’s Nate Silver takes apart this NYT editorial by conservative professor/economist Greg Mankiw, calling it out for its blatant intellectual dishonesty, an allegation which Mankiw’s rebuttal only serves to reinforce, according to Silver:

[I]t is not like the paper is some founders’ document or Dead Sea Scroll whose every fragment we must struggle to interpret. Christina Romer is a living, breathing economist — very much so, in fact, since she’s taking Mankiw’s old job as the head of the President’s Council of Economic Advisers. And when Romer had to estimate the multiplier associated with the sort of recessionary tax cut that Mankiw is talking about, as she did just yesterday (!) in the transition team’s official position paper on the stimulus, she estimated a multiplier of $0.99 for every dollar of tax cuts rather than $3.00. So Mankiw is either suggesting that he knows Romer’s work better than Romer does (even though he conceded in his New York Times editorial that the mechanism behind Romer’s finding remains a “puzzle” to him), or he is in effect accusing Romer of being less than true to herself.

But there is another dead giveaway in the Romer paper suggesting that it is explicitly not intended to be applied as a one-size-fits-all fiscal policy solution. Romer and Romer identify not just one type of “exogenous” tax shock, but two. The first type is a spontaneous, ‘just because’ kind of tax cut “motivated by a desire to raise long-run growth”. This is the type that Romer and Romer posit is associated with a large multiplier — the large multiplier than Mankiw cites in the Times piece. The second type of “exogenous” tax shock is a tax increase motivated by a desire to pay off a budget deficit. Would this type of tax increase also be associated with a substantial reduction in growth? No, according to Romer and Romer. Instead they find that such a tax hike “do[es] not have the large output costs associated with other exogenous tax increases” and may in fact be beneficial to the economy!

So Romer and Romer identify two types of exogenous tax shocks, one associated with a larger-than-conventionally-assumed multiplier, and the other associated with a smaller-than-conventionally-assumed multiplier — perhaps even one in which the sign is reversed. In considering a third type of tax cut, an “endogenous” tax cut designed to stimulate growth during a recession, what basis does Mankiw to assume that it will behave more like the former than the latter?

He doesn’t have any, as far as I can tell. The more conservative reading of the Romer paper is that it is agnostic on a recessionary tax cut. The next-most conservative reading is that it is actively, if cautiously, skeptical about one. Mankiw’s reading, on the other hand, does not appear to come from the text of the paper itself, nor from the other works and statements of Romer, some of which in fact contradict Mankiw’s reading.

I strongly recommend starting from Mankiw’s NYT editorial, and working your way forward. It really is telling of just how intellectually bankrupt* conservative economics have become.

* At least with respect to tax cuts.