Posted on 07/03/2010 6:43:19 AM PDT by 1rudeboy
In this essay, I argue that neither non-economist bloggers, nor economists who portray economics —especially macroeconomic policy— as a simple enterprise with clear conclusions, are likely to contibute any insight to discussion of economics and, as a result, should be ignored by an open-minded lay public.The following is a letter to open-minded consumers of the economics blogosphere. In the wake of the recent financial crisis, bloggers seem unable to resist commentating routinely about economic events. It may always have been thus, but in recent times, the manifold dimensions of the financial crisis and associated recession have given fillip to something bigger than a cottage industry. Examples include Matt Yglesias, John Stossel, Robert Samuelson, and Robert Reich. In what follows I will argue that it is exceedingly unlikely that these authors have anything interesting to say about economic policy. This sounds mean-spirited, but it’s not meant to be, and I’ll explain why.
Before I continue, here’s who I am: The relevant fact is that I work as a rank-and-file PhD economist operating within a central banking system. I have contributed no earth-shaking ideas to Economics and work fundamentally as a worker bee chipping away with known tools at portions of larger problems. It is precisely from this low-level vantage point that I am totally puzzled by the willingness of many who fearlessly and breathlessly opine about economics, especially macroeconomic policy. Deficits, short-term interest rate targets, sovereign debt are all chewed over with a level of self-assuredness that only someone who doesn’t know more could. The list of those exhibiting this zest also includes, in addition to those mentioned above, some who might know better. They are the patron saints of the “Macroeconomic Policy is Easy: Only Idiots Don’t Think So” movement: Paul Krugman and Brad Delong. Either of these men will assure their readers that it’s all really very simple (and may even be found in Keynes’ writings). Lastly, before you dismiss me as a right- or left-winger, I am not. I’m simply less comfortable with ex cathedra pronouncements and speculations than the people I have named. [footnote omitted]
The main problem is that economics, and certainly macroeconomics is not, by any reasonable measure, simple. Macroeconomics is most narrowly concerned with the tracing of individual actions into aggregate outcomes, and most fatally attractive to bloggers: vice versa. What makes macroeconomics very complicated is that economic actors... act. Firms think about how to make profits, households think about how to budget their resources. And both sets of actors forecast. They must. One has to take a view on one’s future income, health, and familial obligations to think about what to set aside for retirement, how much life insurance to buy, and so on. Of course, all parties may be terrible at forecasting, that’s certainly a possibility, but that’s not the issue. Even if one wanted to think of all economic actors as foolish and purposeless organisms making utterly random choices, one must accept that their decisions will still affect, and be affected by what others do. The finitude of resources ensures this “accounting” reality.
[excerpted]
You bring up an interesting point: Bill is upset with the author for sitting on his ass and doing nothing . . . when he himself sat on his ass and did nothing.
Right, the economy is contracting. We are not in a 'deflationary spiral'.
You never bothered to read the essay at all, did you? That explains your reaction.
Apparently, you are not among those people that can think logically: "So, Dr. Urethra thinks that a Ph.D. is a **necessary** qualification for anyone to comment on economics, eh? How then does he explain away all the Ph.D.s who have, presumably by dint of their hallowed expertise, managed to advocate the policies that have wrecked a once-dynamic economy?"
The explanation is simple: a Ph.D. is necessary but not sufficient. That's all. It's a logical mistake to confuse necessity of a condition with sufficiency.
Partly as a consequence, tou also commit another logical error by offering argumentum ad stramineus homo (arguing against a straw man). The author never said that Ph.D. is sufficient, only that it is necessary. You are thus arguing against something he dir NOT say.
So, whom are you addressing as boyo, kiddo? People that live in glass houses should not throw stones.
Athreya: Be careful who you listen to, be they economist or blogger.
LomanBill: Die, DIE!!!
I had another thought: when he goes over-the-top with the personal attacks, is he trying to get the thread pulled? What does he find so threatening about it? Does he find Science threatening?
He makes no sufficiency argument whatever; it might have been more interesting had he done so. Additionally, I never made any sort of sufficiency argument. This is something you apparently plucked out of thin air, rather a 'straw man' argument in its own right.
Further, because we're evidently being formalistic today, your sentence "People that live in glass houses should not throw stones." perforce should read, in proper grammar, "People who...".
As to my not "thinking logically", if you are familiar with the field of formal logic, may I suggest you consult Richmond Thomason for what I should consider a definitive view on that subject. He will very likely disabuse you of that notion in short order. He can be reached at the University of Michigan, unless he has retired by now and moved away.
Do have a nice day, laddie.
I’ve stopped looking for the “logic” behind his incoherency.
>>Die, DIE!!!
No, first eat A$$Paper - then Die, Mr. Geckonomics Suuuper Genius.
Athreya stipulates that there are Ph.D’s in his field that don’t know what they are talking about . . . yet you appear to be defending bloggers as a group.
The fact that I'm not trying to reason with you, and simply making fun of you, proves nothing other than I think you're an idiot. (An idiot who I remember is an anti-Semite).
No one likes to be reminded of their biases.
There is a “logic” behind it . . . just that the logic consists of Jews preventing him from using his Bible to set economic policy. (Although Athreya looks Hindi to me, he just gets lumped into the Illuminati, etc.).
This notion is fine (generally) in the hard sciences and engineering. In other disciplines, the social 'sciences' particularly, this notion is risible.
I am distinctly NOT defending bloggers, on economic analysis or anything else. I am stating that anyone disqualifying a blogger (or any one else) sine papyro de facto is an utter jackass.
Moreover, the author admits some economists are quacks, just like some doctors. You're really making a mountain out of a molehill.
I am actually grateful that someone cared enough to write what appears to be a thoughtful article on the subject. I have been mystified by this phenomenon for years. Ask someone: "Do you have a car?" If the answer is in the affirmative, say, "Oh, then can you tell me what increase of the torque on the wheels I will get if I double the pressure in the cylinders?" Most people would reply as if you offended them: "I don't know. Why are you asking me? I am not an engineer?"
You would arrive at the same outcome if you were to ask a similar question about ironing, or light in the room --- practically anything. People understand that they cannot learn car dynamics no matter how long they drive the car: they need to study mechanical and aeronautical engineering. They understand that one cannot explain how the iron gets hot even after ironing for years: some physics is needed for that.
I found only two, notable in my opinion, exceptions: administration (""my manager is so stupid," such and such CEO "has ruined the company by ___", etc.) and economics. In contrast to all other areas, people assume that they can understand management without any study, just by observing their own managers. They are equally convinced that they understand economics just because they have experience of acting as economic agents. I have never understood why this is the case and continue to be puzzled by this.
In sum, I can imagine how people react to what this author appears to be saying: there is more to economics that meets the eye' it ain't simple, so you need to study --- preferably all the way through a doctorate. They'll roasted him with salt on high heat just for that, even if he avoided self-selection and moral hazard.
They want to remain (armchair) generals without going through the rigors of a military academy.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.