Comments on: Why economists are(n’t) the answer to all our problems Mon, 13 Oct 2014 11:49:24 +0000 hourly 1 By: MrE23 Mon, 01 Nov 2010 00:42:25 +0000 Hi,

One side is wrong in this argument. This accounting identity for GDP:

GDP = C + I + G + NI

is true for any one currency. It can be rearranged into:

Private Savings = Public Deficits

Until all economists accept basic accounting, the profession is doomed to disagreements.

Mr. E
Counter Insurgency, Deficit Terrorist Unit

By: fresnodan Thu, 28 Oct 2010 13:12:40 +0000 I remember a guy (Bob Mcnamara) who, if not an actual economist, sure was a guy who liked to use numbers and analysis. He was the best and brightest.
The only people demonstrated to know less than he were the ones who listened to him.

By: mattski Thu, 28 Oct 2010 01:48:58 +0000 Barbara, I guess I’m confused then. Which exclusively economic problems are economists failing to address?

You wrote: “The economists disagree because they don’t have the tools to see the big picture.” I don’t think that’s right. Economists disagree because they have different preconceptions and different motivations. (They’re people after all!)

I don’t see any problem with expecting economists to address economic questions, nor do I see anything surprising about them disagreeing on these questions. I think that if you do your own critical reading and think about the issues seriously then chances are you’re going to side with some economists and disagree with others. I mean, I find Krugman highly persuasive. I wouldn’t say the same about the Chicago school.

By: BarbaraKiviat Wed, 27 Oct 2010 20:40:22 +0000 @mattski: I wasn’t disparaging economists– some of my dearest friends are economists! My point is that economics-framed thinking, while super-useful, fails to address some pretty big problems, including a few that we’ve come to define almost exclusively as problems of economics. But you do raise an interesting point. There are a lot of high-paying jobs for economics PhDs. I’m not sure the same is true for other social science disciplines.

By: klhoughton Wed, 27 Oct 2010 19:00:03 +0000 Economics has the tools to do the job; rational expectations is not–with all due respect to Mr. Fox, of which there is much–in itself problematic. (The Law of Large Numbers will abide, and using Economics to predict The Mule would be like trusting Senator-to-be O’Donnell to run a test of our ICBMs–oh, wait…)

The problem is more that the models used only include limiting borrowing constraint; the existence of c(0) isn’t covered, and any decent size of population hanging around c(0) will skew anything. (Collaterally, this is why Economic Development theory varies so much from how actual Economic Development has occurred.)

There will always be Liquidationists and other such sadists pushing silliness in economics; ignore them at your peril not due to their economics, but rather their backers. But working with a model that is not robust and assumes normalcy in the midst of increasing skew is a mug’s game.

By: mattski Wed, 27 Oct 2010 18:01:50 +0000 It’s misleading to lump everybody in the profession together and speak of them as one thing, “economists.” There’s a reason economics is a disputatious profession: it sits on the nexus of self-interest and community interest.

Quite a few economists work, essentially, for the wealthy. (I understand Charles Ferguson’s ‘Inside Job’ sheds some light on this.) But not all of them do. And of the ones who don’t there are some damn good ones.

By: Richard3 Wed, 27 Oct 2010 17:59:51 +0000 The interesting thing to me is that economists can’t take a single dataset and apply varying situations to them and at least agree on a RANGE of outcomes.

By: OnTheTimes Wed, 27 Oct 2010 17:32:05 +0000 Economists are tools for politicians, who use them as cover for the policies they want to implement. The politicians usually do not understand the math behind the economists’ theories, but they don’t care, as they are usually just trying to sell a tax cut or spending program. The economists abuse and misinterpret statistics and history to support their wishful thinking, ignoring the fact that the conditions and factors for past economic events and trends are never the same for the present.

Politicians love their jobs, and want to keep them, so they will use whatever tool is at their disposal to achieve that goal. Economists, for some reason, like their jobs, too, so they are always happy to get endorsement from politicians, as it helps them keep their jobs. I think it’s called a co-dependency.

By: TFF Wed, 27 Oct 2010 17:17:06 +0000 Q: What do you call somebody who can shift the outlook of a whole nation?

A: We call them “leaders”.

We could use a strong leader, more than a legion of economists and social scientists.

By: EmilianoZ Wed, 27 Oct 2010 15:57:59 +0000 They are the problem.