Given how much time I spend writing blog posts, it would be good to know if blogging has any impact on the real world. A recent article in The Economist suggests that the answer is yes:
To wangle £11bn ($14bn) out of the British government, it helps to write a blog post. “Full expensing”, which allows firms immediately to write off their spending on machinery, plant and computer equipment from their taxable profits, was the costliest part of Jeremy Hunt’s autumn statement on November 22nd. A long-standing policy in America, the idea of full expensing first wormed its way into British politics in 2017 via blog posts from Sam Dumitriu and Sam Bowman, both then of the Adam Smith Institute, a small think-tank known for its staunch neoliberalism and deranged internet memes about its Scottish namesake.
A few years back, I started to see lots of blog posts advocating “YIMBY” policies, which means deregulating the construction of new housing. More recently, many local and state governments have begun “up-zoning”, which means allowing more housing to be built in any given area:
Posting influences oppositions as well as governments. YIMBYism, once a niche idea reserved for a few very-online activists, has taken over the Labour Party. Sir Keir Starmer, the Labour leader, insists he is a builder, not a blocker. It is a bold move. In a constituency-based system, the diffuse benefits of building often come second to the concentrated inconvenience of development. Even if his specific plans are unclear, talking-points lifted straight from the posts of YIMBY activists now litter Sir Keir’s speeches . . . YIMBY versus NIMBY is now a key dividing-line at the next election.
It is difficult to know exactly how much any given blog post, or even blogging in general, impacts the policy world. Blog posts often discuss ideas that are also widespread in academia. Even so, blogging can bring ideas to real world policymakers that lack the time or inclination to read dense academic papers.
One example is the idea of using aggressive forward guidance in monetary policy when the economy is stuck at the zero lower bound. This general idea was discussed in academic papers by people like Paul Krugman, Michael Woodford and Gauti Eggertsson. But blogging may have made policymakers more aware of the usefulness of this approach.
Although blogging is a relatively recent phenomenon, economists have always been willing to use the media to promote their policy views. Milton Friedman‘s influence on policy was partly due to his academic work, but the greatest impact may have come from his skill at clearly explaining economic concepts in outlets such as Newsweek magazine.
READER COMMENTS
Mark Barbieri
Jan 29 2024 at 11:47am
I’m just one random guy with very little influence, but your blogging has definitely influenced my macroeconomic policy. During the Great Recession, I was afraid that the Fed’s easy money policy (reasoning from a price change) was going to lead to a lot of inflation. When it didn’t happen, I knew that my mental model didn’t work. I read a lot of stuff online to try to figure out why I was so wrong, and it was your Money Illusion blog that provided the explanation that best fit the facts.
David Seltzer
Jan 29 2024 at 1:19pm
Scott: Given how much time I spend writing blog posts, it would be good to know if blogging has any impact on the real world. One way to look at it is your opportunity cost. The exercise of writing your blog must bring you some non-monetary benefit if you are convinced your work has some impact on the real world. I read your stuff because I’m interested in Macroeconomics and Fed policy. Your blogs explain complex concepts well.
Andrew_FL
Jan 29 2024 at 1:26pm
Does it? In my experience it as often means pro-density regulation like banning cars.
Rafael
Jan 29 2024 at 3:05pm
Back in 2011 during that version of the Debt Limit fight in congress a little known lawyer’s blog estimating when the Treasury might run out of money to pay its obligations had an impact on Congress coming to a solution.
The acquired fame also arguably put him on the path to becoming Fed Chair.
Michael Sandifer
Jan 29 2024 at 3:18pm
You and the other market monetarists deserve tremendous credit for helping to change the perspective on the ZLB generally, and the Great Recession and its aftermath, in particular. I consider the fact that NGDP did not end up below the pre-pandemic trend line to be part of your legacy. If it ulimately helps make the difference in Trump being defeated, all the better for that legacy.
It should be considered a well-established fact that the ZLB isn’t a problem, and that tight monetary policy caused the Great Recession, most of the financial crisis, and the unnecessarily slow recovery.
Todd Ramsey
Jan 29 2024 at 4:42pm
“You and the other market monetarists deserve tremendous credit…”
But especially you (Scott), and your blog in particular.
Keep going! The Overton window is moving toward NGDP targeting. A NGDP securities market could happen in our lifetime, and continued support from your blogs will help make it happen.
Thomas L Hutcheson
Jan 29 2024 at 5:13pm
Too bad about “forward guidance” perhaps resulting from a blog post. It is a terrible idea. It undermines the idea that the setting of monetary policy instruments is based on what policy makers using the very latest data think will achieve the central bank target. With “forward guidance” (unless of very general nature “we will do whatever it takes to achieve our target”) it can constrain policy makers from adjusting policy instrument settings in accordance with new data if that is a departure from previous prior “forward guidance.”
I certainly give Sumner credit for my advocacy on my Substack [https://thomaslhutcheson.substack.com] of progressive consumption taxation’s superiority to progressive income taxation.
Kevin Erdmann
Jan 29 2024 at 5:27pm
I don’t understand the enthusiasm for full expensing. Under current tax rules, it seems to me that this would encourage investment in mature firms that have dependable profits over investments in new potentially more innovative new firms that don’t have profits that make write-offs valuable.
Vivian Darkbloom
Jan 30 2024 at 3:19am
I don’t understand the nature of your objection to expensing. Currently, net operating losses (NOL’s) can be carried over indefinitely (no carry backs currently allowed) and are carried on the books as a “deferred tax asset”. Subject to certain change of control rules, a potential acquirer or merger partner would assign a discounted value to them and offer real money for those assets.
What’s wrong with investors preferring companies with dependable profits? The real advantage of such companies over their potential start-up rivals is not the tax expensing but the fact that they have profits. Expensing doesn’t give mature companies an unfair advantage any more than lowering the corporate tax rate would. Should we “level the playing field” but increasing the federal corporate tax rate back up to 35 percent?
Kevin Erdmann
Jan 30 2024 at 8:38pm
Investors do prefer stable returns and they demand lower returns on them. Society tends to benefit more from innovative investments with initial losses and highly variable potential returns.
Full expensing would make investors prefer low return stable investment even more because they can more dependably harvest the deferred taxes.
Thomas L Hutcheson
Jan 31 2024 at 11:15am
We should not be taxing business income, period. Impute the income to shareholders and tax personal consumption.
john hare
Jan 29 2024 at 5:50pm
In a different field I have wondered if my blogging had any effect. Aerospace stuff from an inventor/innovator. Occasionally see things later on that match my articles to some degree. Unfortunately, I am well aware that many people might have similar thoughts so that possibly I had no effect.
jseliger
Jan 29 2024 at 9:06pm
Since July, when I got diagnosed with recurrence and metastases of squamous cell carcinoma, I’ve been writing about life with a near-term death sentence, along with my extreme frustration at the FDA’s slowness: https://jakeseliger.com/2024/01/29/the-dead-and-dying-at-the-gates-of-oncology-clinical-trials .
I’m currently on a clinical-trial drug called petosemtamab, which should have been approved for recurrent/metastatic head and neck cancer at least a year ago, if not more. Had I been able to access it in, say, Feb. 2023, I might not have lost my tongue.
That it *still* isn’t approved is, in my view, criminal.
But in writing about my own situation, I’ve been bcc:’ed on email forwards to FDA commissioners and others in places to help fix the system. It helps that people like Alex Tabarrok have also been blogging about the madness of the current clinical-trial system in an oncology context, but I’m doing what I can to push reform, and it seems I’m having some effect, however small, which isn’t bad for a random guy sitting in an apartment in Phoenix.
David Henderson
Jan 30 2024 at 8:01pm
What an awful result! I wish you well.
David S
Jan 30 2024 at 2:40am
Sometime during the Great Recession the Boston Globe ran an article on how blogs like Marginal Revolution and Calculated Risk had influenced some of the federal policy making during the TARP era. I got hooked because I was trying to figure out why things were so messed up, and after 15 years I think I might understand things a little bit better.
Blogging is probably more valuable than formal research publishing because it increases the odds that critical information will reach people who actually have some power when it comes to policy making–both in government and the business world.
Thomas L Hutcheson
Jan 31 2024 at 11:18am
Hopefully that TARP was (should have been) unnecessary if the Fed were on the ball keeping up inflation expectations.
spencer
Jan 30 2024 at 10:31am
It’s important for people to know that Bernanke “did it again”.
Scott Sumner
Jan 30 2024 at 2:12pm
Everyone, Thanks for your support. I believe that commenters are also under-appreciated.
Carl
Jan 30 2024 at 6:34pm
You’ve definitely influenced my views on the causes of the Great Recession and monetary policy and done a better job than anyone else I read at highlighting the rise of authoritarianism, the descent of the US into banana-republicanism and presenting the Occam’s Razor arguments on Covid. You clearly have developed useful models for evaluating current events.
In fact, I wonder if you might want to share at some point what goes into your model (formal or informal) for evaluating current events. You’ve enumerated your rules for monetary policy (e.g. “never reason from a price change”, “focus on NGDP” and so forth). But in the case of things like the general rise of authoritarianism and the descent of US politics, I’m not sure what you focused on that had you ringing the alarm bells so loudly and so early and why you were so clear that Trump would be the nominee again in 2024 when so many, including yours truly, thought he was done after the January 6 debacle. Or maybe it was who you were listening to, but, in a way, I would think that depends on your mental models as well.
Scott Sumner
Jan 31 2024 at 11:17am
I think a lot of pundits had trouble making sense of Trump because he was such a new phenomenon in American politics. But if you look further afield, you see that Trump is the norm throughout most of human history, in most places. When I saw how popular he was, I realized that henceforth America needed to be evaluated as if it were a banana republic, not some sort of normal developed country like Canada or Denmark. Once I changed my frame of reference, I was no longer caught off guard by the strangeness of our politics. Voters are no longer put off by authoritarianism. Even when Trump passes from the scene, there will be more Trumps—on both the left and the right.
Carl
Feb 1 2024 at 4:06pm
Thanks for explaining that, Scott. I do believe I failed to recognize that Trump’s popularity was glaring evidence that the context for evaluating American politics had changed.
For me, that raises the question why the context changed.
Monte
Jan 30 2024 at 10:55pm
If so, there’s one helluva lag. The same can be said of public intellectuals. There’s no question of their long-run influence on people’s broader views, but ideas that emanate from them take time to worm their way into actual government policy. Social activism, however, has been more of an immediate driver of policy change than either blogs or intellectuals.
Widespread demonstrations have strongly affected cities and countries across the globe over the past several years driven primarily by concerns about pandemics, climate change, inequality, and social justice. The BLM protests in the U.S. alone have led to laws, proposals, and directives in both the corporate world and at every level of government to address police misconduct, systemic racism, and DEI. Activists have used the COVID-19 pandemic as a call to action for radical social and economic policy change, where individually and collectively we’ve come under increased scrutiny and pressure to fundamentally alter our attitudes towards everything, even those issues that used to be considered bizarre or taboo.
Back to the question, is blogging effective? With respect to influencing policy, the evidence to date appears to be mostly anecdotal. However, there is evidence consistent with the view that blogging helps build prestige and recognition in the economics profession, with bloggers being more likely to be admired or respected than other academics of similar (or in many cases better) publication records based on a survey conducted some years ago by Davis et al. (2011).
As far as I’m concerned, the blogging on this forum is money. Keep it coming!
steve
Jan 31 2024 at 10:22am
There is an amplification effect. I dont agree with everything you say but you have changed my mind on some things and on others have left me questioning the accepted narratives. I, and I suspect others, carry this out to other people both on blogs and in real life discussions. So I think you have probably had an outsized influence in discussions about macro (though I still think there is too much voodoo involved).
Steve
BS
Feb 8 2024 at 12:59pm
Blogging is vital. Without it, journalists would be gate-keeping almost all of the information, and they’d be doing that predominantly to serve their politics.
Comments are closed.