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Why Do We Listen To Economists?

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When President Obama was on Letterman earlier this week, one of the first things he said on the economy was something to the effect that 'most economists are now seeing a recovery'. But how can you not wonder these days who the economists are the president refers to, and what those same economists were saying a year ago or 2 years ago about the state of the economy?

You would wonder about that because the number of economists who were even remotely close in their predictions back then easily fits on the fingers of one hand, and moreover the ones that were correct are by no means necessarily the ones who have the president's ear.

Hence, you now find yourself with a president whose economic policies are based on the assumptions of a group of people who in general have been god-awfully wrong throughout their entire careers, and most of all when it counted. They can describe in 1000-page tomes what happens within a system that doesn't move much, but as soon as there are substantial fluctuations, none of their theories have any relevance.

Economics is not a science, it just poses as one. And economists are not scientists, even if they have imposing titles behind their names and a Swedish Central Bank award that has hijacked and plagiarized Alfred Nobel's name, intentions and stature.

You don’t even have to look all that close to realize that the economists who have the largest influence on today's policy-making, people like Alan Greenspan, Ben Bernanke, Tim Geithner and Larry Summers, despite yawningly drawn-out discussions about the differences between Keynes and Friedman, are to a man the proverbial hammers that can see only nails.

All policies executed so far, and all waiting in the pipeline, have the same basic idea. That is, when there is a problem, throw money at it. Too much debt? Throw money at it. There may be trivial differences in the amounts of money to be hurled at a particular issue, and their precise source (though in the end it will always be the silent majority that pays), but down the line it all remains inconsequential.

Quantitative easing is one of the policy measures that has been heavily used in for instance the US and UK this year. But there is zero proof that it will, or even can, actually work. In fact, what evidence there is comes from Japan, where QE has definitely not worked at all over the past 20 years.

What makes QE so appealing, of course, is that it provides economists with the chance to do the one thing they know how to do: throw money at a problem, hammer that nail. And if at first you don't succeed, there's always that one option left: throw more money at it. For economists, truly, the world is flat.

Obviously, there are plenty examples of fake, freak and pretend sciences around. The sun revolves around the earth. When Jesus was born, dinosaurs roamed the earth. Plentiful oil is being made inside the earth as we speak. And people can solve any problem they create if and when they choose to do so.

Article in full at: http://theautomaticearth.blogspot.com/

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Because Injin doesn't write for the MSM?

(Actually, I think he is the posh Radio 4 lady on Radio 1, but that's not the point).

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Economic models are the same as climate models.

No. Economics bears little similarity to physics.

Edited by snowflux

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No. Economics bears little similarity to physics.

I recall my physics teacher at school, so many years ago, profoundly emphasising the difference by stating, in words to the effect, that;

"In physics there are three fundamental laws that can accurately explain 99% of what goes on in the entire universe, whereas in economics it often seems as if there at least 99 laws that explain barely 3% of the world - and then only with an uncertainty of 50%!" :lol:

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Economic models are the same as climate models.

I agree. Both are ruled by Chaos theory. The trouble is, whilst the meteorologists recognise this, the economists don't.

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I agree. Both are ruled by Chaos theory. The trouble is, whilst the meteorologists recognise this, the economists don't.

The problem economists face is that "let it happen" isn't what anyone wants to hear. Not the politicians, not the public, not the academics, not the working man, not the boss, no one wants to hear the truth.

Everyone wants to "do something" when the right answer is to simply let market forces sort it all out and accept what they tell you - i.e. if you are worth nowt, you are worth nowt.

Edited by Injin

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I don't think Economics is a pretend science. The analyses can be as scientific as you like. The only problem with it is you have human emotions superposed upon rigorous models. And hence the accuracy can be anyone's guess.

I'd give a lot of credit to the comment of Roger Bootle, e.g.

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I don't think Economics is a pretend science. The analyses can be as scientific as you like. The only problem with it is you have human emotions superposed upon rigorous models. And hence the accuracy can be anyone's guess.

I'd give a lot of credit to the comment of Roger Bootle, e.g.

Exactly - when faced with the truth "you are bankrupt, dole time" the bankers decided to bribe the state to make the result "we are very rich and valuable, have a bonus" be imposed on everyone else.

When faced with the truth "your wages are too high to compete" the car workers didn't want to hear it, and lobbied the government.

When told "theres no pension money" the boomer public sector workers mumble to themselves about being paid anyway by using political pressure.

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I would question whether we actually do take what they say seriously, instead we all pretend to go along with it. If they can justify special interest pleading with something plausible-sounding and impenetrable their purpose has been served and their payment is forthcoming.

The boss, wherever you are will fire you for contradicting the orthodoxy of lies.

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economics is a science

its just only austrian economics has any substance , keynesian economics requires these 'experts' to keep pumping the system full of lies and money to keep it afloat

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I recall my physics teacher at school, so many years ago, profoundly emphasising the difference by stating, in words to the effect, that;

"In physics there are three fundamental laws that can accurately explain 99% of what goes on in the entire universe, whereas in economics it often seems as if there at least 99 laws that explain barely 3% of the world - and then only with an uncertainty of 50%!" :lol:

I think your physics teacher was agreeing with the French mathematician Jules Henri Poincare who referred to the social sciences as "having the most methods and the least results".

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the economics profession starts off at a huge disadvantage. Mainstream economists don't understand, or don't acknowledge an understanding of modern macroeconomics.

IT wouldn't take long to determine how things really function, but they come out with nonsense statements about public debt and interest rates. It's laziness that just stifles debate from the outset.

oh well, it is the dismal science.

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economics is a science

its just only austrian economics has any substance , keynesian economics requires these 'experts' to keep pumping the system full of lies and money to keep it afloat

Your statement merely confirms the proposition that economics is merely politics in disguise. :lol:

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So we cant listen to economic forecasters, but, we CAN listen to those in your - "the the ice caps are melting" thread?

Curious!

A pretend pilot commenting on a pretend science? Curiouser! :lol:

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So we cant listen to economic forecasters, but, we CAN listen to those in your - "the the ice caps are melting" thread?

Curious!

economics is a valid science although far from perfect as it contains so many variables. The trouble with most mainstream media related economists is that they are paid for being bullish not bearish. But fundamentally their biggest problem is they read economic indicators on a standalone basis whereas as far as humans are concerned economics is useless without looking at it alongside socionomics

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The problem economists face is that "let it happen" isn't what anyone wants to hear. Not the politicians, not the public, not the academics, not the working man, not the boss, no one wants to hear the truth.

Everyone wants to "do something" when the right answer is to simply let market forces sort it all out and accept what they tell you - i.e. if you are worth nowt, you are worth nowt.

We are getting down to the nitty gritty on this thread!

All the 'Professions' mentioned so far, for which the participants get paid large sums of money, are all relying on one constant.

Whatever they say/guess with all their accrued knowledge - may or may not come to pass!

Professionalised 'guess-work'.

I suppose you can apply that to majority of City gamblers too coz where one wins, another loses somewhere in the system!

Politicians/etc rely on "collective forgetfulness" - are the misdeeds of the fraudulant politicians receding from memory?

Can you remember most items that were on the 10.00pm news even a few days ago if it didn't catch your attention in some way?

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It's a good article, but really it's only saying what Jim Kunstler, John Michael Greer, Steve Keen, Michael Hudson etc. etc. have been saying for fugging ages.

Economics is essentially a highly unsuccessful predictive model, except perhaps at the macro level in certain unfashionable versions (Marxism, Austrian) which disagree with each other as to how the basic mechanisms work.

It doesn't really count as a science, due to the basic dishonesty of almost all the practitioners involved with regard to the (lack of) efficacy of their work.

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It's a good article, but really it's only saying what Jim Kunstler, John Michael Greer, Steve Keen, Michael Hudson etc. etc. have been saying for fugging ages.

Economics is essentially a highly unsuccessful predictive model, except perhaps at the macro level in certain unfashionable versions (Marxism, Austrian) which disagree with each other as to how the basic mechanisms work.

It doesn't really count as a science, due to the basic dishonesty of almost all the practitioners involved with regard to the (lack of) efficacy of their work.

Well it's a science - but if the personal incomes from the people who measure light waves or counted snowstorms depended on the results being certain values, you'd see the exact same thing.

That everyone (almost) is lying so they can get a higher income doesn't change anything fundamental, it's just that they are lying.

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Isnt this a non-debate?

One of the basic principles of economics is to ask what assumptions are you making. Even at todays level of dumbed down schooling I would imagine that a starter GCSE economics student could tell you about the assumption of ceteris paribus.

I hardly think that the intervention of the biggest fvck off stimulus package in history fits the definition of 'all other things remain constant'.

We have madman at the tiller - (in direct contravention of another basic assumption of economic thinking - rationality!!) - Gordon can fvck up anyones predictions of what the economy will do - his policies have more resemblance to scorched earth than rational sustainable progress.

To blandly say that in general all economists were wrong is akin to saying all hpc'ers were wrong because thought they had identified an absence of any economic fundamentals to support crazy prices but didnt factor in Fuhrer Brown and his ZIRP & QE and his 'at all costs' determination to sacrifice the future of the uk economy to protect our fecking stupid bankers.

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Guest absolutezero

When I used to say economics wasn't a science I used to get earache. How times change.... :rolleyes:

What really put me off is the whole of economics assumes that markets and people behave rationally. They don't, so the whole subject is a load of cack.

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That everyone (almost) is lying so they can get a higher income doesn't change anything fundamental, it's just that they are lying.

An idea I've considered is that many people might be perpetuating a myth without being aware that they are lying. Sure, some will offer bare-faced falsehoods, but I think many more accept and repeat this material because it is the only explanation that gels with their experiences in real life... and this works because the only thing that underpins the financial system is expectation.

In a fashion not dissimilar to religion in times gone by, what is at issue is authority... and I defy anyone, even yourself, to establish an objective justification for authority. People have appealed to polytheistic faiths and myth; to monotheistic deities; to atheist (secular) communism - and to unfettered market economies. The problem with all these strategies is that the philosophy doesn't quite match the objectives of those who adopt it... and, over time the two diverge. There is no more prominent reminder of this in recent history than the Republicans (arguably the architects of free global markets in finance) when they shun free market capitalism to bale out banks when they perceive that adherence to their principles does not result in the outcome they expect.

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When I used to say economics wasn't a science I used to get earache. How times change.... :rolleyes:

What really put me off is the whole of economics assumes that markets and people behave rationally. They don't, so the whole subject is a load of cack.

Economics assumes no such thing.

It assumes that you can't act that irrationally for very long because you are in a real, physical world with hard and fast rules which will soon bring you into line. You can "irrationally" jump off a rooftop all day - but the rationality of the world will then determine your course afterwards.

The problem being that in a world with billions of people doing their thing, the stupid can be cushioned for a long time by the genuinely prudent before they hit the fall.

Edited by Injin

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Isnt this a non-debate?

One of the basic principles of economics is to ask what assumptions are you making. Even at todays level of dumbed down schooling I would imagine that a starter GCSE economics student could tell you about the assumption of ceteris paribus.

Sorry, fail, never heard of it. Perhaps i should therefore have no opinion. Oh dear.

Actually economics is a bogus science which generates ideology for various interest groups

whose interests are mainly in direct opposition.

Dressing it up in latin strokes the ego's of sponges.

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