Richard Thaler

An economics Nobelist I had actually heard of before he won the prize, having read a pre-publication copy of his book Misbehaving a few years ago (one of the benefits of being married to a collection-development librarian). I wanted to write a proper review of it at the time, but Life. Anyway, it's a delightfully accessible book, written in the first person, embedding the fascinating concepts of real-world behavioral economics in the rich context of the people and culture of academic economic research.

If you're interested in this sort of thing, Dan Ariely's Predictably Irrational (which I also read in pre-publication) is about the same concepts, albeit without quite as much personal flavor, and also quite accessible to the intelligent non-economist.

Did he really say that?

From an interview on Morning Edition this morning [edited now that the transcript is up]:

INSKEEP: You're arguing that economic growth is going to be so great that tax revenue will increase rather than decrease?

DAVIDSON: Absolutely. If you look at why we - why we balanced the budget in the late '90s, it was because we had a massive economic expansion. So we really have to do the things that are going to drive growth in the economy.

[Notably unsaid: That "massive economic expansion" was preceded by a an increase from 31% to 39.6% in top individual tax rates, a tax increase that Republicans said at the time would cause an economic meltdown.]

INSKEEP: Well, let's just be frank, though. A lot of economists would doubt that cutting taxes is going to grow the economy enough to bring all the revenue back in.

[Unfortunately, Davidson is never expected to answer this.]

INSKEEP: And I'm thinking that just a few years ago, when Obama was president, House Republicans were willing to default on the debt rather than borrow a - a single additional dollar. It seemed to be a really significant problem. Is it no longer that big a problem?

DAVIDSON: It's an incredibly big problem. If you look at what happened under Obama, the deficit national debt doubled. The deficit spending - now, this is a - this is the games that people play with math - deficit spending has - has actually gone down because it started at such a high point. We were overspent by $2 trillion in '09.

[And Davidson avoids the question completely: if you just blame everything on Obama, you don't have to think about whether your proposed policies are consistent with your stated aims.
Davidson's diversion statement is mostly true: the national debt roughly doubled, while the deficit shrank by a factor of about four, from an extraordinarily high level when Obama took office. Davidson is apparently outraged that anybody would "play games" and suggest that deficit spending decreased during the Obama years, just because it did.]