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Is Economics A Science Or Religious Dogma? There's A Hearing For That
Not only is economics the must futile, destructive and worthless "science" in the known world, but now it is actually occupying the very limited attention of corrupt congressional critters, who are participating in a hearing titled "Building a Science of Economics for the Real World" (obviously paid by taxpayers). Here is the reason for the hearing: "The Subcommittee on Investigations and Oversight will hold a hearing on July 20, 2010, to examine the promise and limits of modern macroeconomic theory in light of the current economic crisis. The Subcommittee has previously looked at how the global financial meltdown of 2008 may have been caused or abetted by financial risk models, many of which are rooted in the same assumptions upon which today’s mainstream macroeconomic models are based. But the insights of economics, a field that aspires to be a science and for which the National Science Foundation (NSF) is the major funding resource in the Federal government, shape far more than what takes place on Wall Street. Economic analysis is used to inform virtually every aspect of domestic policy. If the generally accepted economic models inclined the Nation’s policy makers to dismiss the notion that a crisis was possible, and then led them toward measures that may have been less than optimal in addressing it, it seems appropriate to ask why the economics profession cannot provide better policy guidance. Further, in an effort to improve the quality of economic science, should the Federal government consider supporting new avenues of research through the NSF?" Since there are no more pressing issues, Congress has to decide on whether or not economics is actually a science. And as the answer is and has always been no, perhaps they could have held this hearing a century ago when the country still had a chance to avoid bankruptcy, ruin and social catastrophe, all facilitated by the false religion of Keynesianism.
The full hearing charter can be found here.
Those protecting their livelihood by expounding the virtues of economic charlatanism will be the following:
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Why not just pass a law outlawing witchcraft?
Don't be dissin' Wikipedia...
Wikipedia is terribly innacurate more often than you think.
Wikipedia has a better record than mainstream economists.
As for the Congressional hearings, if they finally figure out that the economists don't know what the Hell they are talking about, at least it would be a step in the right direction.
It's sure easy to trash economics since it will never be able to predict human behavior in a continuously changing world. Maybe it shouldn't even try.
But most of the alternatives offered around here seem to amount to little more than ideology. Doesn't seem to be an advance away from religion/witchcraft to me.
This is much more likely to institute Keynesianism as the one true church and open the door to burning Austrians at the stake, thereby saving their souls.
Why dont they just see if they can float
What ALSO floats on water?
little tiny rocks
churches!
Baby Ruth. It's no big deal.
First question: how do you go from supply and demand to aggregate supply and demand? Oh. You don't. You just make it up?
Second question: why is there a difference between micro economics and macro economics? Shouldn't the same principles apply if youre talking about aggregating individual decisions? Shouldn't it just be economics?
Yes and no.
If a principle works on many levels, like gravity, then it shows up across the sciences. But more often we find principles that only work on certain levels, which is why we keep chemistry separate from say anthropology. Attempts at unification might give us beautiful theories but then are too generalized and nonspecific to give us anything other than a mental working model to approach new problems. Could help, but can also lead us to overlook important details.
Good questions, still. Kind of makes one wonder, too, why do assume micro is fundamental to macro? Crazy question, maybe, until you consider that a single bird's flight pattern will differ when surround by a flock.
No, there is no micro nor macro economics, just economics. Do quantum micro or heavenly macro gods intervene to make people buy and do things they do not want to buy and do? The principles of economics operate on the human acting scale.
Nonsense.
There are clear economic consequences to a society's economic structure, and they do not carry over to the "micro" (that is, the "unit") scale. Microeconomics does not capture the notion of money flowing through an economic machine, or how those machines can be structured to become more efficient or productive.
"Micro" economics is about units of economic productivity. Macroeconomics takes a particular unit (the nation state) and examines how its internal workings affect its microeconomic health (that is, its "balance sheet", aggregate productivity, competitiveness in the world market, etc)
Sorry pal, "nation states" are only made up of acting individual human beings, no different than neighborhoods, families, or couples. Economic structure only exists when and where free trade exists. All else (theft, redistribution, taxation, etc.) is the antithesis of supply and demand economics voluntary trade exchange.
Do Zeus and Apollo make you buy and do things you do not want to buy and do? Does macro gravity take a particular unit (the nation state) and examine how its internal workings affect its micro gravity health? The laws of gravity and the laws of economics aren't effected by imaginary political boundaries.
Consider a wave. A wave has certain properties no matter the medium. It can be traveling via a liquid, gas, or solid, and the medium can be pretty much anything in any of those phases. Yet a compression wave traveling through water will behave similarly to a compression wave traveling through air.
The wave is the aggregate behavior of the particles. Interestingly, one can have a pretty reliable science of waves without understanding or modeling the characteristics of the particles. In many cases, the underlying mechanics are even irrelevant.
Consciousness is another example if you believe AI does not have to be based on organic life. Same emergent properties with different underlying mechanics that might not be necessary, only sufficient.
Except economic activity is always made up of discrete differing waves. There can be no buyer without a seller, there can be no seller without a buyer. There is no single macro wave of hive mind borg activity. So while we might have a decent understanding of particular waves we are clueless about the chaotic non linear interaction of multiple choppy storm waves.
Plus, waves can't change the preferences (motions) of their paths, unlike human beings that can decide you know what, that house is listed for double what it's worth, or pet rocks and hula hoops are boring toys. That information feeds back, and changes future trade exchanges and production decisions. All economics empirical data is a matter of individual trade transactions, because that is all that is ever occurring. There are not quantum physics micro acting human beings, and thus there are not macro heavenly acting human beings.
The whole micro macro economics distinction is a mirage based on trying to copy physics.
Your preferred framing of the dynamics is based on the most immediate human perceptions which is not fundamental to all other models. You're starting with folk individualism, but not admitting that this particular level of description is, well, particular. You mirage of how things work is not necessarily the sole truth, or true at all, as if we could ever really know why we do anything that we believe we are doing.
Great piece, I love it! Now after the Voodoo practitioners of Keynsiamism have utterly imploded the world with their religious cult, they plan to hold a clowngress sideshow to discuss the validity of it all? Priceless!
The least capable truely do run the show!
Let me guess how this ends. The word "economics" is thrown into the trash bin along with "Islamic Terrorism", "winner/loser" and other assorted words and phrases deemed incorrect or unfair by the liberal elite.
Now all of our kids will take college courses in Micro and Macro Keynesianism.
If economics is a science, its a science whose methods, mathematics, and conclusions all scientists from other disciplines justifiably laugh at.
If economics is a religion then this denomination's ('neoclassical') basic tenet is: "I'm all right so fuck all the rest."
Regards
Wasn't always so. Once upon a time, great ideas originated from this field. If it weren't for early mathematicians working in finance, we might not have seen the rise of statistics and probability theory.
Today, it is an inflated industry with too many non-passionate-about-science participants who are in it for the prestige (that only recently lost it's prestige).
It's more of a bubble than either of the above. Hopefully, we'll see some major weeding and this field will once again be a ripe garden of ideas.
I'd have to exclude 'religious dogma' because there are no zombies or ritual cannibalism involved. There is, however, sky cake.
I would call it a thin academic veneer over an instrument of political propaganda. Economics is to science as eugenics is to sociology.
"Economics is to science as eugenics is to sociology."
hehehe. Spot on.
On the contrary, zombie banks and cannibalization of institutions abound.
"When you canonize science you get religion."
It's called the 'dismal science' for a very good reason. Real scientists make testable predictions with their theories. Maybe that's why Clowngress is inviting these folks to pay a visit? Smoke and mirrors.
NObody expects the Spanish Inquisition! But it's here.
http://www.youtube.com/watch?v=gldlyTjXk9A
Wow, the real estate value of that hearing room will never recover. Probably after that load of negative matter gets done talking the trees within a 5 mile radius will also have all died.
Yup. The crisis shook the foundations of faith in the system. Every time it happens people get a peak into the machinery of the economy, the power structure, what really makes things run. And it gives them a chill. They realize that it's all based on a collective set of delusions about reality and future. They realize that economic "laws" are nothing of the kind. And what seemed constant and immutable, rational and scientific like The Efficient Markets Theory is a mirage. During the crisis and still today, Governments needed to step in to stabilize markets that are not self-correcting and never can be. Pure Monetarists were wrong, pure Keynesians were wrong. 2008-9 was a humbling experience for economists around the world.
What if the markets are self-correcting to some extent, however, they don't always correct themselves in the way we, as individuals, would like to see? The whole does not have the same goals as the parts.
It ain't a market or economics when the government forces you to buy crap you are not voluntarily willing to pay for. If Efficient Market Theory is wrong when is the last time you bought something you did not want to buy?
Let's call it "stabilizing markets" when we force you to pay double for everything you buy, so I can have an additional one for myself.
Results of hearing will be.....Garbage in--garbage out.
Economics is the continuation of Ideology by other means
with apologies to Clausewitz
very nice.
Thanks.... am considering copyrighting it...
Science or not, if we can understand the limitations of its practitioners, this is all we need to make informed decisions based upon their suggestions. Although a day late (and trillions of dollars short), better late than never.
Further, this concept will be the skewer that prods the controlled demolition of our educational infrastructure... and, I'm guessing a couple of real science disciplines get mud thrown on them in the process. The argument will go something like this: "we are paying you to educate our children (elite), but you're teaching them bullshit and when this comes to fruition, our whole society gets fucked... so, why should we pay your salary and retirement benefits in perpetuity and ensure our own starvation?" This type of reasoning will eat away at virtually all aspects of government through the deleveraging process.
When the stomach is empty, the collection plate runs dry.
My take on economics: People do what they perceive is best for them. You get what you reward. There is no free lunch.
In my opinion, if we define religious belief as requiring you to accept certain truths simply because a higher authority says it's true, then the answer is that economics of any stripe is a religious belief.
The difference is that in economics, they use charts and equations and "studies" to "prove" their truths. In religion they use "miracles, ancient texts, ancient artifacts and anecdotal hearsay" to "prove" their truths.
Even the hard sciences face these same hurdles... for example, climategate was a brief glimpse into the science for cash paradigm. Even if not directly purchased, science is largely prone to paradigm shifts after very long periods of entrenched thinking on a particular theory... only one day to be uprooted by a new theory, throwing to waste thousands of peoples' life work.
I think all of this really boils down to man's failure to understand his limitations. This is the sole factor differentiating wise men from smart. There are significant numbers of important aspects of all our lives to which we have very little understanding. We often get carried away in our ability to manipulate the world and somehow equate that with understanding. Unfortunately for economics, there are often too many variables involved to fully understand why one method of stimulus works in a particular circumstance and doesn't in another or, if not too difficult to understand, certainly too difficult to admit.
With an increase in the amount of credit available, inefficiency and complexity are sure to follow. I think many of our troubles will soon be corrected with a massive decrease in available credit and, therefore, the complexity of the system and its ability to be orchestrated. In this sense, I am not sure the question, as posed is fair, because we are not really sure if we are truly dealing with "economics" or a bastardized, bought and paid for, version thereof.
My studies of human history show me that when "power", be it financial, political or religious, manipulate facts, figures, perceptions and beliefs to maintain their hold on power, the underlying assumptions, whether they started out as "true" or not, always are distorted by the current (or future) holders of the power to reflect the new "truths".
"Truth" is what the current power base says is the truth. This paradigm is being challenged by the Internet and a growing public awareness of past and present manipulation. The real question is this. As the public grows more aware of the manipulation they are subjected to in order to support the few, will "we" do anything about it?
Pretty much...
Being incredibly general, I would say somehow, along the way, humanity stair steps... although we find a new keeper, who changes some of the rules, there is often an undeniable change that occurs in thinking along the way, often times when lies are exposed to the truth. The problem? Well, there are so many unknowns and lies, exposing them is nothing short of a herculean task that, in all likelihood, will outlive humanity. That said, evolution occurs in not only biology, but our understanding of this mudball... despite getting whacked every so often, we're stair stepping upwards. To what end I have no idea, but slowly, we are progressing.
The internet poses so many threats to the status quo, I am really not sure how that battle will pan out in the short term... in the long term, control will succumb to freedom as freedom needs no ever expanding credit bubble to perpetuate itself.
I suppose I'll take your question one step further. If we do anything about it, will we implement measures to ensure we do not have to do this again, presuming of course we can even implement such measures... My guess is that, historically speaking, we just roll over another version of the matrix. Even the greatest minds can't keep the bitch afloat forever... knowledge is a power too great to not draw desperate interest, hell bent on collecting and controlling it.
We're getting better at fixing the problems... just not much better at preventing them.
I think that until we grow another pair of chromosomes, you're assessment is probably correct. We have to evolve past the need to be governed and enslaved, and to the point where we can all get on without killing each other and stealing from one another. I know that sounds simplistic and idealistic, but if we came from a lower form (of humanity) in the past, it's not too much of a leap to say we're going to a higher form in the future, all things constant. Let's evolve, says I.
As long as it's in the best interest of the power that be to subvert our evolution, we will edge closer and closer to fascism and greater central control. BTW we should point a few fingers at ourselves while we're at it. Many people here on ZH, including myself, have talked about taking care of ourselves and not worrying about the "others". Sounds like we have control issues as well.
http://thevenusproject.com/ has been discussing this issues for decades. Their fundamental belief is that as long as the world's resources are hoarded and not evenly distributed, we will be in a constant state of stress and conflict. And it seems that the powers that be use resource wars (aka spreading democracy) to further polarize the world. Since we here in the developed world seem to have more than the undeveloped world, any plan that "appears" to take from "us" to give to "them" will fail before it starts.
Unfortunately the perception is that http://thevenusproject.com/ is promoting this. It is not.
This is very interesting. It sort of reminds me of Jim Channon's First Earth battalion. Must read more.
I have a friend who is all about trying to re-form the system. He believes that if only we would restore the constitution and get all of 'those lying bastards' out of office, we could reestablish the republic and get back on the gold standard. While that sounds good, I don't see anything preventing a repeat of our current situation 200 years from nwo.
Personally, I am for completely dismantling just about everything so we can start from scratch, taking from the difficult lessons we've learned. We need not only to rethink the methods we use to impliment our ideas, but we need to reform our ideas as well. We shouldn't limit the range of what we would dare to change either. Thanks for the link CD!
Your friend is as crazy as a shithouse rat. Reminds me of a crusty ass old man trying to buy the muscle car of his glory days, hoping to relive that one moment where he got a piece of ass for squealing the tires... (who he ended up marrying and shitting on for 20 years before she couldn't take it anymore). We got here because the founding fathers fucked up. Learn the lesson(s) from it and evolve. The muscle car ain't going to fix what ails us.
Even if we are given a recipe book, we'll still figure out how to fuck up the dish. It will get passed on like a game of "telephone" and before it gets to the last person, it tastes like shit and doesn't even resemble the original recipe. The problem with this approach is that a system of governance has to be able to ebb and flow with society and the world as they change. Too loose, and you get an incurable STD (teh hiv)... Too tight and you'll never get to have any fun... tough tightrope.
I completely disagree that we are destined to have more and more control taken from our lives. I think our control, to a large extent, is simply a direct function of credit. Without an unlimited means to control, there cannot be control, on a long enough timeline. People hate the concept of credit contraction, but I welcome it. I realize that I, along with potentially every person on earth, may be wiped out by the consequences stemming therefrom. However, for the next step of our evolution, it is absolutely necessary. We have done (and probably will) literally every conceivable thing to keep the status quo alive. I am hopeful that we can learn our lesson without much bloodshed, setback, or horror.
An ounce of prevention...
PS, I realize that we will supplant centralized government for regional robber barons... but at least those bastards will have a face and a name... and would have no incentive whatsoever to keep in place many of our government's policies...
Also, I realize that we will have additional control implemented, by our future creditors and employers, insofar as we have limited resources and those will be even more scarce as credit contracts. In other words, we will still be controlled, just differently. We would have conceptual freedom (rules and regulations lifted), just not the economic means to realize all of it... not sure which is more frustrating... but, I'm ready for different scenery and I think, on net, the robber barons are the lesser evil.
Missed this gem earlier. Sorry, but as long as humans are around, there will be a disagreement as to who gets to utilize our available resources. Further, if resources are to be divided by a select group of people based upon "fairness" who gets to be in the group and what are the odds of that being sustainable? Remember, there are potatoes in kiev, but the people in stalingrad are starving. I hate to be an asshole and summarily dismiss their premise, but it sounds far fetched to me.
Rather than tell me it "sounds" far fetched, I sugest you spend a few hours (at least a few hours) on the web site and read before rejecting. Most people who summarily reject the idea (I'm not saying you are doing so) are simply projecting their own beliefs and needs onto the subject.
The Venus Project is unlike anything that has been proposed before. People see the pictures on the web site and immediately make assumptions based upon their own preconceived notions. Take a chance and spend some time understanding what they're talking about. We aren't going to move forward without trying new things and letting go of some of our fears.
There's no new things to try. Ludwig von Mises observed people are either freely trading with one another or they are not; there is no third way possibility. The only pretend new thing is obfuscating and pretending to call theft something other than theft.
The only way we will move forward to a propserous peaceful society is through free trade, including free market competing currency.
what about new names for old ideas? were QE referred-to as 'printing money', as it might have been in LvM's time, today we would not be trudging the rock-solid road to economic ecstasy.
CD, I'm not sure I would call the plans of the venus project "proposals" so much as "concepts". They remind me of the blueprint for change. Anyone can present a concept, but proposing a very specific plan that will work to effectuate that concept is... a little more difficult. Drafting is an art and history is a bitch.
Further, as I surmised in my original post, the concept of rationing resources is foolhardy and only has very, very specific application (e.g. survival situations). I think the previous replies express my sentiment well...
It is also suspect that they admit their master plan cannot get kicked off until world collapse... Like most "green" concepts, as demands dwindle and humans are liquidated, the need for resource change falls by the wayside... I would think the ripe time for their introduction would be at the peak of our resource demand, when our present system falls short... but credit contraction has another plan...
It really reminds me a lot of marx... they diagnose many of our problems very well, but the offered solution is... naively optimistic.
PS, just to bust your balls, I already saw biodome and don't think I could sit through another one. Also, how the hell do they get the money and land for the test center? Reminds me of the story of budha rejecting his fabulous life to go sit under the bodhi tree... (a bunch of horse shit).
Wait, you either didn't read Kuhn or you found disagreement!
I apologize for being an accounting major that took an elective in the philosophy of science... I should have probably elected basket weaving... but, enlighten me, I'm curious. I think, in general, I agree with what I've read of Kuhn. (my guess is there is a miscommunication, but we'll see).
As an undergrad, I took a philosophy class that was offered for both undergrads and grads, and took the grads' option of doing a term paper for 100% of grade. I chose Kuhn, even through he was last to be covered in the syllabus. It was a humbling experience, though I did manage an A. I would be happy to pass the paper along...
Anywho, the idea that science progresses along a path of less knowledge to greater knowledge was one of the central antitheses of his argument. I know, sounds crazy and easy to argue against, right? That's what I thought until I was forced to take his ideas seriously. (There is no nutshell version, sorry.)
I think my stair stepping comments were more directed towards technology and political change... with a smidgen of combatting Mako's implied thesis that through credit contraction, we will get liquidations batting humanity back to the previous version of the matrix (the last expansion before implosion). Ultimately we are left with more knowledge, new technology, and expanded infrastructure... a stair step from the previous version. This is the "good" part of compounding credit fueled growth that is often overlooked.
I also agree with the concept that dealing with some aspects of science (e.g. the deep reaches of space), we easily see the philosophy and political aspects of science. But, some advances are simply undeniable, for example, the concept of a round earth or heliocentric universe. Now, I'm sure one might argue that this knowledge wasn't so much gained as refined, but I think the definition of knowledge was outside the boundaries of my previous comments and I'll run the hell away from any debate on epistemology.
I also take it that there are no "laws" of science? I realize I may be arguing the exceptions here, but still... we might not know some aspects, but if we can recreate them, then that's good enough for humanity in most regards...
Needless to say, I can certainly appreciate the concept of exchanging one theory for another without invocation of "real" science.
If you wouldn't mind, send me the redacted paper to mariopoffoinvestments@gmail.com or just redact it, dump it on a hosting site, and post the link... either way. (I don't want to know who the hell you are).
Sent. Let me know if you didn't get it.
I pretty much agree with most of what you just said. I'm of at least two minds on this. Today, I'm only seeing agreement.
Got it. Thanks. Will read in next week+. Much appreciated.
Unfortunately, cognitive dissonance is contributing to our ("we") lack of action.
I used to take comfort in the belief that everything happen for a reason. In recent years I have come to realize that humans are just very good at accepting reasons as to why things happen. Control systems take advantage of this. As such, we are fed a constant stream of information which conflicts with our desire to rebel...to do something!
Unfortunately, "we" will only do something when the pain of continuing within the current paradigm becomes too great to ignore and we reject all food that is presented to us. Leadership is needed...paradigm shifts don't happen without a push. November may be when 'we' do something...
Should I assume you aren't talking to me when you say "cognitive dissonance" is contributing to......?
My five part ZH series "Welcome to the Insane Asylum" laid out the reasons for action, explained how action could be accomplished and then called for action. I have been a local activist in my county and state for over 7 years and have moved many issues from gestation to completion. I have become such a pain in the ass of the local powers that be that I've been jailed many times and placed on the do-not-ever-let-fly list, which is much worse than the harass-before-letting-fly list.
So I take some umbrage in you saying that I'm contributing to our ("we") lack of action. I'm out in front leading by doing and asking/calling for help. Though I do get your point.
http://www.zerohedge.com/article/welcome-insane-asylum-%E2%80%93-seeking-moral-courage-chapter-5
http://www.scribd.com/doc/33507389/Welcome-to-the-Insane-Asylum-Our-Collective-Psychosis
CD,
My apologies for poor prose. I was using the term 'Cognitive Dissonance' in its literal sense. We want to change but we are constantly provided with reasons (that we use) as to why we would not...
I have read your series and know that 'inaction' is not in your makeup...no offense was intended.
Thank you for providing a comprehensive road map to follow for those of us who need some direction.
After I posted my reply I came back a hour or so later and suddenly realized you might have been talking about the Cog Dis concept rather than the ZH Cog Dis. Thus I added the first sentence asking if you were talking to me.
It works either way but your intended way makes a lot of sense. And the fact you didn't capitalize should have been my warning.
Time to gird our loins boys and girls. I brought the war dance; oh, I'm the good looking one.
http://www.youtube.com/watch?v=uHW1K2LeQXE&feature=related
MachoMan,
I once tackled Thomas Kuhn's work on this topic, before which I'd only heard about his coining the term "paradigm." I was defeated. The more I tried to argue against him, the more my paper became a tribute to a brilliant mind.
Cheers.
Geez, I just thought there was too much debt.
Or here is another, if the whole purpose of debt is to repay it, why does it take more debt to repay it?
Exactly.
Also, first definition of default from Google,
de·fault [ di fáwlt ]
The default action really ought to be to default, in this case.
Too bad Hayek couldn't get some sense into JMK concerning macro level imperatives.... and it's really too damn bad neither one of them appreciated the role of micro stability & sustainability in achieving macro stability & sustainability, even when sharing the roof of Cambridge University observing the Blitz live and in color...
They should take this opportunity to visit some of the European birthplaces of certain economists, and take their wives and kids. The summer is a nice time to visit. It's all free.
Immanuel Cunt begs to differ. Dissing economics is throwing out the baby with the bathtub, or however you say this in your tongues. Keynesianism is flawed; analyzing the dynamics of society is not.
On the other hand, for added intellectual entertainment, I suggest to Tyler to substitute 'economics' with 'thought' in the above article. Is thought a religious dogma?
And I shall readily take the side it is. And watch the babies in the flood while someone tries to define dogma and free will.
yeah economics is a science of scamming people and law is a science of getting away with it.
One basic ingredient that won’t be in this witches’ brew of Keynesian-managed markets is the old assumption that markets were self-regulating and needed little intervention from the state.
keynesianism is quackonomics or to quote out of context bush crime syndicate leader george bush - it's voodoo - not religion.
murray rothbard on the other hand was prophet of true religion....
Economics should be a science... and taken more seriously as such. As long as "business people" are pulling the strings on it, it will only fail over and over again - continue to be a farce. NASA learned this the hard way in their own field. BP getting the same dose of reality today.
Don't blame economics, blame the economically illiterate masses. Why is Paul Krugman paid? It is because he is able to advance the agenda of those who pay him, and that is possible only because people listen. The fault lies with the suckers who listen, not the hustler.
Yeah, its a better idea for EVERYONE to work 24X7 at studying the latest in economics or at watching the politicians and bankers to make sure no-one is getting screwed. Because just at the last minutes of New Years Eve when you're at the party, the fuckers will enact legislation to screw you blind. Makes sense to me.
Next congress will have a hearing with a rabbi, a priest, and a pastor asking them to justify their beliefs.
They'd do a more credible job than the macroeconomic idiots today.
Whatever happened to separation of church and state?
I don't know if it's a religion, but it's certainly not a science...
A few things.
First, calling this and other governments Keynesian is about as misleading as calling this economy capitalism. Capitalism doesn't include bailouts. Now the entire economy is based on them and responsibility is understandably out the window. Why bother running your company or household responsibly when you can make others pay when you screw up? Keynes believed in deficit spending only when there is a recession. He did not believe in deficit spending during a good economy. He believed in stashing surplus money away. He'd be rolling over in his grave if he heard his name being used as an adjective for what we see today. He stated many times that a huge trade deficit leads to a permanent recession and that huge government debt leads to a permanent recession. You cannot have a Keynesian government without paying the debt off after recovery. Personally, I'm not Keynesian at all, but at least the word should be used correctly by both sides.
Second, can't they start another false unwinnable war? We've had War on Poverty, War on Drugs, War on Terror, how about War on Recession?
"...Calling this and other governments Keynesian is about as misleading as calling this economy capitalism."
" He did not believe in deficit spending during a good economy. He believed in stashing surplus money away. He'd be rolling over in his grave if he heard his name being used as an adjective for what we see today."
__
Yeah, right.
Let's take this further.
"Communism" as practiced by the USSR under Stalin et al. and under Mao had nothing to do with Engels or Marx.
Or...
The Catholic Church as practiced under the Popes from the Middle Ages / Crusades until very recently (some would say until present) has no semblance to what Jesus Christ actuality taught.
I could go on and on and on....
Well, we must be generous. As Mises put it:
“Lord Keynes’s doctrines did not add any new idea to the body of inflationist fallacies, a thousand times refuted by economists. His teachings were even more contradictory and inconsistent than those of his predecessors who, like Silvio Gesell, were dismissed as monetary cranks. He merely knew how to cloak the plea for inflation and credit expansion in the sophisticated terminology of mathematical economics.
“The interventionist writers were at a loss to advance plausible arguments in favor of the policy of reckless spending; they simply could not find a case against the economic theorem concerning institutional unemployment. In this juncture they greeted the ‘Keynesian Revolution’ with the verses of Wordsworth: ‘Bliss was it in that dawn to be alive, but to be young was very heaven.’”
Adds Mises, “It was, however, a short-run heaven only…[ but this does not] “excuse authors who tried to provide a would-be scientific justification for the crudest of all popular fallacies, viz., inflationism.”
As to unemployment and Keynesian policy, Hazlitt wrote in 1959 in The Failure of the “New (Keynesian) Economics,” using unemployment and deficit charts from the 1930s to prove his points:
“The central and decisive fact is that heavy deficits were accompanied by mass unemployment…”
Hazlitt then demonstrates that from 1949 to 1958, when the same policy of artificially pushing down interest rates was tried, that “the relationship of unemployment to interest rates is almost the exact opposite of that suggested by Keynesian theory.”
Speaking of science, there is no such thing as a trade deficit. The same goods which exist before the trade, exist after the trade, and both sides are positively economically better off (which is why they traded in the first place). Just like the laws of gravity don't differ by imaginary political boundary, neither do the laws of economics.
"Congress has to decide on whether or not economics is actually a science."
Congress hasn't a clue as to whether or not economics is a science; in fact, I doubt that they even have a clue what the question means, or whether it mans anything much. More importantly, such an investigation will be an utter waste of time. It doesn't matter a whit whether or not economics is a science. What matters rather is whether economists have much to say that is of value in determining policy. I would begin by looking into where their funding comes from, how they get appointed to advisory bodies and what they have to do to get stuff published. I believe that it wouldn't take much investigation to reveal that the economic counsel that is recruited to guide economic policy is simply bought and paid for, in the manner of rating agencies or "expert witnesses". The great economic "maestro", Alan Greenspan, who rose to become one of the most powerful, and disastrous, policy-makers of all time, says that he got all of his main ideas from Ayn Rand. Good grief, give us a break . . .
About says it all. The true nature of macroeconomics, as determined by our own government in alliance with the big corporations and banks, is to make those at the top of the wealth pyramid even richer. It's to educate those of us at the bottom of the pyramid that we're in recovery, all the while we're unemployed and homeless. To get us deeper into debt.
Cui bono? Modern "economics" is just a ploy to justify the loans and debt slavery for sovereigns and their people as engineered by the global financial imperialists. Goldman Sachs is the NY Fed. These analysts will be expected to produce economic models that will suit the Fed’s agents for global empire, the International Monetary Fund and the World Bank. Economics will be what they say it is.
As John Perkins, EHM and author of “The Secret History of the American Empire: Economic Hit Men, Jackals, and the Truth about Global Corruption,” said, “As an econometrician…I discovered that statistics can be manipulated to produce a large array of conclusions, including those substantiating the predilections of the analyst.”
John Perkins' stuff is a great read and a shining example of the possibility that anyone can develop a conscience. Let's hope sentiment like that catches on right smartly (though I'm certainly not holding my breath.)
"Courage my friend, it's not too late to make the world a better place." -Tommy Douglas
Best Regards
It might not be perfect, but the charletans are you
http://shareholdersunite.com/2010/07/04/keynesianism-zerohedge/
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Troll alert!
"He runs a brilliant blog. Too bad it’s marred by unsubstantiated daily rants against Keynesianism…
Let’s make no mistake about this, the ZeroHedge blog run by Tyler Durden is brilliant. But it is marred by daily rants against Keynesianism.That wouldn’t be so bad if these rants were actually substantiated by facts and arguments, but we couldn’t really detect much, if any. That Keynesianism doesn’t work seems to be assumed to be self-evident at ZeroHedge.
We even tried to engage Tyler into a discussion about the topic, but he didn’t take the bait seriously. So we’ll debate from here."
__
It's good to have a troll now and then.
He wants to argue religion at a time like this?!?!?
Economics is not a science. It is philisophical mathmatics.
No, it is ideological.
it's more like genetically-modified mathematics...
No, it's more akin to phrenology.
The Little Peoples Guide to Economics
1. Taxes = Interest Payments to Bondholders who own this country
2. Default on your debt whenever it suits your fancy. There is nothing honourable about paying off debt
At the core of the problem is that the human mind cannot grasp non-linear processes. Sure we can solve a few simple cases, but these are typically "toy models". When problems that are non-linear confront the masses, their resolution essentially become "faith-based". To wit, anthropogenic climate change is the latest incarnation of this.
Are you people, Post-Keynesians? And are you running computer simulations?
Rejecting
post-Keynesians hold that, in an uncertain world, firms, operating under conditions of imperfect competition and increasing returns, must decide how much to produce and how many workers to employ, what prices to charge, how much to invest, and how to obtain finance. It will be the pricing decision which, in general, determines the distribution of the national income between wages and profits. And as production and investment take time while expectations are in general falsified, there is a systemic need for loans from outside the production sector which generates acceptable credit money endogenously – in other words (in accordance with common observation) there must exist a banking sector. According to post-Keynesian ideas, there is no natural tendency for economies to generate full employment, and for this and other reasons growth and stability require the active participation of governments in the form of fiscal, monetary and incomes policy. And itwill probably be impossible to derive analytic solutions which describe how economies as a whole evolve, particularly as institutions and behavioural patterns change drastically through historic time.as chimerical the concept of the neo-classical production function,
Not dogma
dogshit
I am a fan Trav
Keyesian ISM is based on having something to redistribute. Right now we are rapidly depleting the source. Then we become a carcass.
Congress should have invited Yves Smith of Naked Capitalism. Her book, EConned, is a sharp and funny critique of neoclassical economics. Among many other points, she suggests that the models constructed by economists have assumptions so restrictive that the models are generally useless. Also, the models assume that systems move toward equilibrium. And they assume that outcomes follow a normal distribution...
These models are a reflection of the point I made above. A corollary is that non-linearity imposes models that are "faith-based".
thesapein,
"If it weren't for early mathematicians working in finance, we might not have seen the rise of statistics and probability theory."
Your bell-curve reflects probability because the center is incorrectly set to a variable average. Set it to a fixed galactic standard and the curve will reflect knowables.
I'm impressed. But only because you're a typing cat!
I still need a kitty translator though because I don't quite understand the words you're typing.
thesapein,
This forum posed a question -- is economics a science or religious dogma?
That question challenges whether economics can help us know the future so as to "provide better policy guidance."
The answer to that question is directly reflected in the state of the tools presently employed.
To wit, you commented positively upon the "rise of statistics and probability theory."
Good response, but it still leaves the question hanging.
Clearly, if all economists used crystal balls, economics would be worthless.
But what if all economists used bell-curves (which they do) -- does that make them scientists?
I say it all depends on how they define the bell-curve.
Ok, your turn.
What does the vertical centerline of the bell-curve represent to you?
What do deviations from that centerline represent to you?
I can understand how many see probability theory as not a very good example, maybe, of what's come from accounting. But I had in mind how probability theory later became much of the framework for quantum mechanics, for example. We no longer have visual analogies with nice curves to describe a range of phenomena so we're using a math that can't be pictured in the mind's eye.
To most, that's still far removed and unconvincing, so here's something that is more immediately recognized: Gambling. Imagine going to a casino without any knowledge of probabilities. Probably not going to do well. On the other hand, those MIT kids counting cards do well until they get caught.
I just realized though that I'm wrong. The cool math came from finance, not economics. I confused the two! If economists had to test their theories, by say making money, they might had become more scientific.
So, since I was wrong, this saves me from having to answer your deeper questions, right? I'm off the hook? I'm so much better at asking myself questions than providing answers.
Let me ask you a loaded question. Do we want them to be more like scientists? Some people fear the idea of social engineering, but that's what would result, no?
thesapein,
No, you are not off the hook.
Yes, you pose great questions . . . which is to say, that you are also very good at identifying the path to the correct answers.
Do we want them to be more like scientists? -- Yes
Would social engineering result -- Yes, but we have social engineering in either case (i.e., I prefer "scientific" social engineering to "dogmatic" social engineering).
Back to the hook. The cool math comes from mathematics (not finance or economics).
Take those "MIT kids." I don't know Jeff Ma (the leader), but Jane (played by Kate Bosworth) is a friend who I do know.
Jane has an AB in Mathematics from Harvard, by way of Exeter.
Her first real job after college was with the National Bureau of Economic Research where she worked with Larry Summers. Summers is the person doing the present "social engineering."
Jane does not claim to be an expert at economics. Jane is an expert at card counting.
Jane was able to walk into the MGM Grand and walk out with millions in cash.
And do you know how she did that? She was able to correctly answer (as far as 21 is concerned) those two questions you are trying to skirt.
Jane knew the "vertical centerline of the bell-curve" for a deck of cards was the #8 card (six cards lower -- 2-thru-7, and six cards higher-- 9-thru-Ace).
Jane knew the "deviations from that centerline" meant either winning or losing (low cards = losing, and high cards = winning).
She counted out the low cards, which left her with high cards and a sure bet.
Thesapein, carefully read the posts to this forum.
Why don't Tyler, or hedgie, or Flakmeister card-count the stock market?
Because they don't know where the center card is -- they cling to using a variable average centerline and have not yet deduced a fixed, finite, unwavering #8 card.
They also haven't realized that one-half of the stock market deck (the trends) is worth more than the other half of the stock market deck (the sideways congestion).
"We no longer have visual analogies with nice curves to describe a range of phenomena so we're using a math that can't be pictured in the mind's eye."
Bullshit. I can visualize card-counting just fine.
Thesapein, you sound like Flakmeister, who claims, "the human mind cannot grasp non-linear processes."
Then you skirt the answer by drifting off into quantum mechanics neverland.
Your mathematicians knew where the #8 card was over a hundred years ago (e.g., Henri Poincaire).
Why do you think Einstein said, "God doesn't play with dice?"
Take a hint.
Hey, I'm usually the first to defend Einstein! How did I end up over here?
Did you just say that math comes from mathematics?
My response to Flakmeister's cognitive closer; there's something to be said of our limitations, for sure, like ants trying to understand a computer screen as they crawl across it. However, as Daniel Dennet would say, there's also something to be said about the way we can think to even ask the question about our own limitations. If an ant could pose some questions about the screen or about its own cognitive closer...
I did deserve a smack down for pretending to speak for everyone and what "we" can or can't visualize. I hate it when I talk like that.
Your answer to my question was pretty much how I would had answered it. Nice. I worry that others hold animosity toward science and would rather their "moral" leaders solely take up the task. I also worry that other don't see science as being part moral and qualitative, artistic and creative, and so many other things that all come together to make science great.
Now, what's that about the stock market having a fixed average? Cards have fixed face values, but stocks... how does that work? If you say it's zero for the stock market, I'd love to agree.
Yeah, if god played dice, then we'd still have to explain how dice work. Can probability theory be fundamental? What then determines the odds? Of course, this is a problem for any model that claims to be fundamental. The idea that it all reduces to say matter, still leaves us with explaining how matter can be matter. Someone once said that in explaining "green" I want the greenness to NOT already be included in the model. Greenness should be explained in terms alien to green. Einstein was on to that.
thesapein,
"The idea that it all reduces to say matter"
"If you say it's zero for the stock market, I'd love to agree."
Close. It actually reduces to "energy" and to the "shape" of a zero (a.k.a., a circle).
Let me explain by using several strained analogies:
Concept #1 --
Use air to inflate a balloon.
You see the inflated balloon, where before you could not see the invisible ("dark") air.
Here's the math -- air = inflated balloon.
Most people don't understand the equal sign. They think it means either one or the other, i.e., either air or inflated balloon. Rather, the equal sign means "masquerading as." The air hasn't disappeared, it is "masquerading as" the inflated balloon.
Pop the balloon, and the air will come out with a bang.
Now let's try another equation -- e = mc^2.
The e hasn't disappeared, it is "masquerading as" mc^2 matter.
Pop the mc^2 matter, and the energy will also come out with a bang (picture Hiroshima).
Point #1 -- It all reduces to energy.
The importance of this point, is to focus you on the nergy, and not on the matter (i.e, the numerical stock prices).
Are you ready to go to Concept #2?
To me, e=mc^2 isn't a relation that only goes one way. You can't say one side reduces to the other. It's a relation with neither being fundamental. Some people say it means energy is matter in motion, some say matter is energy, but I'm more focused on the relation. What is energy without mass? Plug that in and you get 0. Nothing.
So, no, not ready for #2.
I'm also in this fields phase where I like to think of everything as made of fields. Trying it on for awhile.