A friend of mine works as an economist at the Federal Reserve, and it’s fun for us to talk about the government’s efforts to shore up the economy. It’s a massive government intervention, worth trillions of dollars, but my friend’s sense was it will be hard to accurately measure if it worked.
A recent GAO report on the Treasury Department’s oddly named TARP (Troubled Assets Relief Program) concluded the same thing: We’ve spent $700 billion and we can’t be sure it worked. There are lots of measures they watch (that go by horrible names such as LIBOR), but measures can only go so far. Fundamentally, there’s only one economy, and so it’s difficult to say what would have happened if the government hadn’t intervened.
It reminds me of the giant unreplicated experiment humanity is performing with the Earth’s atmosphere…climate change.
While what is known about climate change is frightening, the scariest part for me is the totally unexpected results that often occur the first time any experiment is run. There is a cottage industry among ecologists of forecasting the effect of climate change on natural systems, our attempt to tell policymakers the implications of our current knowledge.
I’ve done my own share of forecasting other aspects of global change, and I’m sure I’ll do more of that in the future. But I wonder sometimes if we don’t communicate to the public that the unknown and the unexpected are the norm for novel experiments…and that we’re all conducting the biggest experiment in Earth’s history right now.