Why Americans Hate Economics (fancy theories of macroeconomics defy basic common sense)

Wall Street Journal ^ | 08/19/2011 | Stephen Moore

[SeekAndFind]

Christina Romer, the University of California at Berkeley economics professor and President Obama's first chief economist, once relayed the old joke that "there are two kinds of students: those who hate economics and those who really hate economics." She doesn't believe that, but it's true. I'm surprised how many students tell me economics is their least favorite subject. Why? Because too often economic theories defy common sense. Alas, the policies of this administration haven't boosted the profession's reputation.

[roaddog727]

Mr. Moore has a good bead on things.

Keynesian Economics does not work. Period.
All BS.
Counter intuitive clap-trap.

[Fred911]

I hate voodoo economics.......

[Rippin]

Basic micro-economic theory, incentive structures, measuring the impact of tax burdens, the implicit shape of demand and supply curves, logic of consumer choice, basic theory of trade, theory of the firm all make tons of sense.

It really is the macro that drives people crazy because it is completely bogged down in multi-colinearity so the research can be read either way mos tof the time.

[Texas resident]

Fancy theories of macro economics keep economists from having to get a real job.

econ is easy.

income more than expenses, good
income less than expenses, bad

Another jewel for the economists:
If your outgo exceeds your income, your upkeep becomes your downfall.

lesson over. Now go and be unexpectedly surprised.

[econjack]

Because too often economic theories defy common sense.

BS. I taught university-level economics for 25 years and you can hold students' interests with common-sense examples of economic theory. The problem today is that economists quoted in the MSM all have an agenda of some form. One of the universities where I taught has an Outstanding Teacher Award, which includes a $5000 cash prize to the winner. Despite the fact that I was only one of three Intro to Econ teachers and my average grade was almost a full grade point lower than the other profs, I won that award. Students said: If you plan to major in Econ, take Killer Jack. This makes me think students can enjoy economics, provided the theories are presented in an understandable, if not entertaining, way and common sense is the key to those examples.

[Texas resident]

That was directed at the smarter than thou economists, not you.

[Uri’el-2012]

In the late 60s, I took two semesters of Economics,
It made absolutely no sense. OBTW I'm a member of Mensa.

During the 80s I read a 1200 page
Primer on Austrian Economics,

it was brilliant and straight forward.

There was not a graph in the book.

Keynesian Economics is pure Marxist
clap trap, smoke and mirrors.

[FreedomProtector]

Good article. Thanks for posting.

Or consider the biggest whopper: Mr. Obama's thoroughly discredited $830 billion stimulus bill. We were promised $1.50 or even up to $3 of economic benefit—the mythical "multiplier"—from every dollar the government spent. There was never any acknowledgment that for the government to spend a dollar, it has to take it from the private economy that is then supposed to create jobs. The multiplier theory only works if you believe there's a fairy passing out free dollars.

[sickoflibs]

RE :”Consider what happened last week when Laura Meckler of this newspaper dared to ask Press Secretary Jay Carney how increasing unemployment insurance “creates jobs.” She received this slap down: “I would expect a reporter from The Wall Street Journal would know this as part of the entrance exam just to get on the paper.” Mr. Carney explained that unemployment insurance “is one of the most direct ways to infuse money into the economy because people who are unemployed and obviously aren't earning a paycheck are going to spend the money that they get . . . and that creates growth and income for businesses that then lead them to making decisions about jobs—more hiring.” That's a perfect Keynesian answer, and also perfectly nonsensical. What the White House is telling us is that the more unemployed people we can pay for not working, the more people will work. Only someone with Ph.D. in economics from an elite university would believe this.”

Another Good post by Stephen Moore. It also shows how arrogant liberals are , just demanding we just except their idiotic premises without question.

Look at how unemployment comp works:

1) You pay the unemployed to stay unemployed
2) You take some of that comp money from employers in employer-side payroll taxes making remaining employees MORE expensive to keep and to hire. Yes, those unemployment premiums go up because the states raise those taxes on employees charged to employers as unemployment claims go up.
3) Americans who are living on unemployment insurance will spend and save less than those forced to get jobs that they may not like.

If you can see why this doesn't stimulate more jobs and employment liberals dismiss you and say you are not educated enough to talk about the economy.

[EN1 Sailor]

"income more than expenses, good income less than expenses, bad

Another jewel for the economists: If your outgo exceeds your income, your upkeep becomes your downfall."

__________________________

I have always believed this, but apparently, to an economist, I'm provincial and ignorant. But I'll bet that the above mentioned method would have prevented our current national debt crisis.

[Mensius]

believe there's a fairy passing out free dollars.

What has the Fed become if not the money fairy?

[redgolum]

I have been in some rather heated discussions on FR using that very basic outline.

I have come to realize that once we start talking about Other People's Money, most don't care if the books balance. They want “their” piece of the pie, be it retirement, wages, etc. They don't care that if they keep taking what is not theirs, there will be no more pie.

[Aevery_Freeman]

I teach at the high school level (physics/chem/math) but am interested in econ. I asked the Econ teacher if they taught Smith, Hayek or even Friedman (I've read Wealth of Nations Road to Serfdom and Free To Choose) and she just laughed and asked "Why would I?"

The dismal science for a reason.

[BfloGuy]

I have always believed this, but apparently, to an economist, I'm provincial and ignorant.

Only to some economists. Unfortunately, Keynesianism (and its offshoots) has become the dominant school in academia and in this administration. It has always appealed to leftists (and big-government conservatives) and the media parrots what the politicians tell them to the exclusion of everything else.

I swear, the next time I hear some blonde bimbo on TV "explain" that consumer spending makes up 70% of the economy, I will scream my head off. IT DOES NOT!

You need to read up on Austrian economics, though you wouldn't be completely wasting your time with the Supply Siders. Sensible economists are out there, they just don't get face-time on TV.

[BfloGuy]

I've read Wealth of Nations Road to Serfdom and Free To Choose

Then you probably have a better grasp on how an economy actually works than most economics majors (and your teacher colleague, too).

[Erasmus]

I think Keynes had a few useful insights into economics, society, and history.

It’s when he got the idea to create an all-encompassing theory of economics that he fell on his head, and a whole generation or three fell on their head with him.

The flattering blandishments of the statists, whose purposes his theory suited, went to his head.

I think that some of his intellectual descendants carried things to a worse extreme than Keynes himself.

I’m presently reading Mark Skousen’s book “The Making of Modern Economics” on my Kindle.

Another one I recommend is Skousen’s “Vienna & Chicago, Friends or Foes?”. I have this packed away in another city and unfortunately I haven’t yet found an e-book version.

[CMAC51]

Basic micro-economic theory, incentive structures, measuring the impact of tax burdens, the implicit shape of demand and supply curves, logic of consumer choice, basic theory of trade, theory of the firm all make tons of sense. It really is the macro that drives people crazy because it is completely bogged down in multi-colinearity so the research can be read either way mos tof the time.

Macro economics was developed to explain away the truths of basic economics. The basic truths don't change, you just divert people's attention away from them.

[KarlInOhio]

I have two teenage sons. One worked all summer and the other sat on his duff. To stimulate the economy, the White House wants to take more money from the son who works and give it to the one who doesn't work. I can say with 100% certainty as a parent that in the Moore household this will lead to less work.

How about if you just slap the dollars the hardworking son on the copying machine and make an equal number for the lazy son... wait, that's counterfeiting if you do it with a hundred dollars, while it's monetary policy and quantitative easing if Bernanke does it by the trillion.

Maybe you should just pay off the lazy son with money you borrow from the Chinese kid down the street.

[econjack]

Free to Choose is one of the best books for young minds. Make them read it and then argue it in the classroom. Today's students don't have a clue. The first day of class I ask them what the average profit rate is for US corporations. They think it's 50%. Fact is, the long run profit rate is about 3.2%. When I was teaching, CD's were paying over 5%, and I would tell my students that most company presidents would be better off to sell the company and put the funds in CD's rather than put up with the Federal BS they have to contend with. Alas, fewer voters are much smarter than these freshman.