I propose that things like what happens in comments 59 to 61 be called “warts man” arguments.
Basically, Lizardbreath says that the point of a joke is that it’s very wrong for people to mistake Pareto-optimal outcomes (where you can’t make anyone better off without making someone else worse off) with just or fair outcomes. puzzled effectively responds that this is a straw man: “The first thing any teacher says after introducing the concept is that Pareto efficient is not necessarily desirable.” To which LB responds, it is not a straw man; many people will claim that “whoever has an initial right is unimportant because if someone else wants it more they can make a deal,” based on the Coase Theorem, which in fact tells us only that if this sort of bargaining is allowed the outcome reached will be Pareto optimal. Meaning that it is unimportant only if the difference between Pareto optimal outcomes is unimportant; namely, if you mistake Pareto optimal outcomes for just or fair outcomes.
And she is right that this claim is made. Here is Ronald Coase himself, answering the question how he explains his theorem to people:
It deals with questions of liability. Whether someone is liable or not liable for damages that he creates, in a regime of zero transaction costs, the result would be the same. Now, you can expand that to say that it doesn’t matter who owns what; in a private enterprise system, the same results would occur. [emphasis added]
And you can find this sort of thing all over. So what we have is basically the opposite of a straw man (hence “warts,” “straw” spelled backward), an argument that is claimed to be a straw man but which in fact lots of people do make.
This seems like an especially fine example because apparently it’s acknowledged up front that the argument is bad, but people use it anyway. Which, in my crotchety opinion, is pretty common with public policy applications of economics; you have theories that depend on idealizing assumptions, that everyone acknowledges depend on idealizing assumptions, and that then people apply to the real world even though the idealizing assumptions don’t hold. (cf.; this post and its comments also worth reading.)
Other fine examples of warts man arguments come from various retrospective attempts to defend the Bush Administration’s conduct in the run-up to the Iraq war, where various people claimed quite angrily that Bush never said Saddam was an imminent threat or never tried to portray Saddam as linked with Al Qaeda. But the economics ones are nicer because they’re more honest.
BTW, though I think this phenomenon really deserves a name, I’m not sure “warts man” is the right one (unlike my other neologism “Crapstone” which, I concur with the commenters, is perfect.)