Economists. What (Or Who) Are They Good For?

Tyler Durden's picture


"Economists today primarily serve the needs of powerful interests at the expense of society in general" is how Robert Johnson - the frighteningly honest Executive Director of INET - describes the self-indoctrinating field of study that remains in such seemingly high regard in the nation. In an excellent and forthright brief interview with Stifterverband, Johnson notes that "Economists are very much accused of 'only seeing the economy through the eyes of the model' as opposed to seeing the economy and building a model as a map of what reality is." And while "when the people become anxious they want the expert to tell them what's going to happen. And they feel good when their anxiety is relieved because they think they understand the future. But if the expert instead of telling the truth is selling snake oil - a false story - when that is unmasked the expert becomes the scapegoat." Overall he believes 'economists' did a great disservice to mankind and suggests a number of approaches to "cleaning up after that". Sadly, he opines, "At the core, economics is about politics and about power, and the question for the economists is whose power are you going to serve as an expert."


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Tue, 05/22/2012 - 11:12 | 2451052 B-rock
B-rock's picture

Absolutely nothing.

Tue, 05/22/2012 - 11:13 | 2451056 CvlDobd
CvlDobd's picture

Say it again!

Tue, 05/22/2012 - 11:19 | 2451057 bdc63
bdc63's picture

my thoughts EXACTLY -- I guess it's true what they say about 'gread minds' ;)

I present to you exhib A:  The Laffer Curve

Tue, 05/22/2012 - 11:20 | 2451078 Pladizow
Pladizow's picture

God invented economists to make weather men look good!

Tue, 05/22/2012 - 11:22 | 2451081 bdc63
bdc63's picture

I thought it was because the world already had too many used car salesmen

Tue, 05/22/2012 - 11:28 | 2451098 Oh regional Indian
Oh regional Indian's picture

I personally like Voodoo Science. In essence, an oxymoron. A non-starter. A non-sequiter. A never left the gater. DOA.



Tue, 05/22/2012 - 11:29 | 2451102 Aziz
Aziz's picture

It sickens me how Krugman can pretend to be for the 99% while advocating handing more and more endless cash to banks for their junk assets.

Tue, 05/22/2012 - 11:32 | 2451115 Pladizow
Pladizow's picture

I agree with ORI - they are like snake charmers!

Tue, 05/22/2012 - 11:41 | 2451167 francis_sawyer
francis_sawyer's picture

francis_sawyer was somewhat of a snake charmer in his prime... Nobody ever called me an 'economist' though...

Tue, 05/22/2012 - 11:49 | 2451205 WonderDawg
WonderDawg's picture

You probably weren't balding and sporting a douchebag beard.

Tue, 05/22/2012 - 12:02 | 2451256 Vince Clortho
Vince Clortho's picture

and the highly sought quivering lower lip.

Tue, 05/22/2012 - 12:29 | 2451363 francis_sawyer
francis_sawyer's picture

I wasn't trying to attract 'dudes' (like these ones you see nowadays)...

Tue, 05/22/2012 - 18:49 | 2453136 Xkwisetly Paneful
Xkwisetly Paneful's picture

No shit really?

I have read this here about 2,542 times and yet for some reason there are imbeciles around who believe big government is for the people.

Tue, 05/22/2012 - 11:49 | 2451203 The Alarmist
The Alarmist's picture

"I agree with ORI - they are like snake charmers!"

Except that Snake Charmers have some inherent charm.  Economists are repellent to even snakes.

Tue, 05/22/2012 - 11:32 | 2451116 Oh regional Indian
Oh regional Indian's picture

I'm surprised Krug can still sicken you Aziz. He is so clearly what he is, has been. 

Has Been.


Tue, 05/22/2012 - 11:36 | 2451138 The Big Ching-aso
The Big Ching-aso's picture



Conomists.    There fixed if for ya.

Tue, 05/22/2012 - 12:15 | 2451304 Nachdenken
Nachdenken's picture

Mist as in German.

Tue, 05/22/2012 - 11:37 | 2451140 kridkrid
kridkrid's picture

It's remarkable to watch, actually.  So many seemingly smart, certainly well educated people, who buy what he sells based on his manufactured "bona fides"... So willing to accept him are they that a chicken scratched 2 paragraph blog entry equals capital T Truth.  And that is how the system is designed to work.

Tue, 05/22/2012 - 12:19 | 2451313 knightowl77
knightowl77's picture

"I thought it was because the world already had too many used car salesmen  ."

I thought it was because the wold already had too many lawyers....

Fixed it for you

Tue, 05/22/2012 - 12:08 | 2451279 Winston Smith 2009
Winston Smith 2009's picture

"God invented economists to make weather men look good!"

Ha!  That's a good one!

Tue, 05/22/2012 - 11:46 | 2451194 Joe The Plumber
Joe The Plumber's picture

The laffer curve is real

The argument is over its slope length and maximum

Tue, 05/22/2012 - 12:11 | 2451294 The Big Ching-aso
The Big Ching-aso's picture



R U trying to make us laff?

Tue, 05/22/2012 - 11:15 | 2451059 ihedgemyhedges
ihedgemyhedges's picture

Brusca and his defenders on this board would disagree................

Nevertheless, they are Ivy League trained, overly verbose typers of words to which they alone assign other words, useless to us who actually know what is going on..............

Tue, 05/22/2012 - 11:36 | 2451133 ThirdWorldDude
ThirdWorldDude's picture

...Simply put, they are excellent soap material.

Tue, 05/22/2012 - 12:41 | 2451418 AlaricBalth
AlaricBalth's picture

"I love economists. I had two for dinner!"    Dr. Hannibal Lector

Tue, 05/22/2012 - 12:03 | 2451258 francis_sawyer
francis_sawyer's picture



No, no, no,, there's no problem here. I was just

hoping you might give me some insight into the

evolution of the market economy of the Southern

Colonies. My contention is that uh...prior to the

Revolutionary War, the economic modalities, especially

in the Southern Colonies, could most aptly be

characterized as agrarian precapital--


Let me tell you somethin', all right? Of course that's

your contention.


Hang on a second.


You're a first year grad student. You just got finished

reading some Marxian historian -- Pete Garrison,

probably -- you gunna' be convinced of that till next

month when you get to James Lemon, then you're

gunna' be talkin' about how the economies of Virginia

and Pennsylvania were entrepreneurial and capitalist

way back in 1740. That's gunna' last until next year,

you're gunna' be in here regurgitatin' Gordon Wood.

Talkin' about, you know, the pre-Revolutionary Utopia

and the capital forming effects of military mobilization.


Well, as a matter of fact I won't because Wood

drastically underestimates the impact of social di--


Wood drastically...Wood drastically underestimates the

impact of social distinctions predicated upon wealth,

especially inherited wealth. You got that from Vickers.

Work in Essex County, page 98, right? Yeah, I read

that, too. You gunna' plagiarize the whole thing for us?

Do you have any thoughts that...of your own on this

matter? Or do you-- is that your thing? You come into a

bar, you read some obscure passage, and then pretend

you, you..pawn it off as your your own idea just

to impress some girls..? Embarrass my friend? See, the

sad thing about a guy like you is in fifty years you're

gunna start doing some thinkin' on your own, and

you're gunna' come up with the fact that there are two

certainties in life: one, don't do that, and, two, you

dropped a hundred and fifty grand on a fuckin'

education you coulda' got for a dollar fifty in late

charges at the public library.


Yeah, but I will have a degree. and you'll be serving my

kids fries at a drive-thru on our way to a skiing trip.


Yeah, maybe. eh, but at least I won't be unoriginal.

Pardon me, if you have a problem like that, you and me

could just outside 'n we could figure it out.

Tue, 05/22/2012 - 13:23 | 2451582 sgt_doom
sgt_doom's picture

Thorstein Veblen from the grave:

Been there, done that, said it many times before my death.

Any further questions? 

Tue, 05/22/2012 - 11:34 | 2451126 BeetleBailey
Tue, 05/22/2012 - 13:22 | 2451556 Randall Cabot
Randall Cabot's picture

So that's what that dude looks like-I've only heard his songs a million times.

I was having a hard time processing that-gyrating to an anti-war song in a groovy I had to switch to 25 Miles to get my head right and remind myself of those Sunday afternoon geteaway parties before driving back home from the shore:


Tue, 05/22/2012 - 11:39 | 2451143 Captain Kink
Captain Kink's picture

Unless they're "Austrian", right? 





Tue, 05/22/2012 - 11:45 | 2451184 Turin Turambar
Turin Turambar's picture

You are correct.  Austrian economics is the most accurate "descriptive" school of economics on the face of the planet.  The others, in comparison, are built on fallacies.

Tue, 05/22/2012 - 12:24 | 2451331 Winston Smith 2009
Winston Smith 2009's picture

Unfortunately, all of them are about as accurate in predicting the future as weather predictions and for the same reason, they all try to predict a highly complex system with an inadequate understanding of it using far too few data points.  The "science" of economics is further hampered by models that use overly simplistic math compared to that used for weather predictions along with input data that is already badly doctored for political reasons. 

And yet they try to run the macro-economic world with this garbage "science"...

Tue, 05/22/2012 - 12:11 | 2451295 Non-overlapping...
Non-overlappingMagicCereal's picture

And circle gets the square :)

Snake oil!  Oh, you agree with me?  Nevermind!

Tue, 05/22/2012 - 13:26 | 2451591 jus_lite_reading
jus_lite_reading's picture

Economists play a vital role in the global ponzi...

Tue, 05/22/2012 - 11:13 | 2451054 New England Patriot
New England Patriot's picture

If it wasn't wrong, it wouldn't need to be justified by so many words.

Tue, 05/22/2012 - 11:28 | 2451100 Non-overlapping...
Non-overlappingMagicCereal's picture

I know!  All an economy is the interaction of billions of agents, each with a wide variety of assets and needs, and each engaging in calculations for myriad conceivable transactions, some of which they execute and some of which they do not.  Zero Hedge can sort it all out with a couple charts, and they'll even draw an arrow on it to show you what gonna happen!  Words are for sissies.

Tue, 05/22/2012 - 11:40 | 2451155 New England Patriot
New England Patriot's picture

Methinks you are an economist.

Tue, 05/22/2012 - 11:55 | 2451231 Non-overlapping...
Non-overlappingMagicCereal's picture

No, just a scientist whose research engenders a respect for complex systems, and a skepticism of those who can create a simple chart in excel and say 'this explains it, now we know exactly what will happen, anyone who suggests it is more complicated than this is under the thumb of the central banks' (which describes about half of all ZH contributions).

Tue, 05/22/2012 - 11:51 | 2451217 pods
pods's picture

All those myriad of possible decisions are made by humans.

Individual humans are unpredictable.  Humans are highly predictable.

See Edward Bernays.


Tue, 05/22/2012 - 12:06 | 2451268 Non-overlapping...
Non-overlappingMagicCereal's picture

Fine, but I hope you all realize that the specificity of predictions made by ZH and the community here would make any economist blush.  If you want to believe they are incompetent and corrupt, go ahead, but the fact that they make far weaker claims based on far more rigorous analysis should give you pause.  If you are placing one-sided bets with the bulk of your assets on a particular vision of the future proposed at ZH, as I know many here do, I hope you keep this in mind.

Tue, 05/22/2012 - 12:09 | 2451287 pods
pods's picture

You must have me confused with someone else.

I buy gold and silver.


Tue, 05/22/2012 - 12:12 | 2451296 Non-overlapping...
Non-overlappingMagicCereal's picture

Yes, clearly I do.


Tue, 05/22/2012 - 12:42 | 2451410 pods
pods's picture

Let me explain.  I am not buying gold and silver with the notion that someday I may buy a city block with an ounce. I buy it because all the possible economic outcomes that are proposed nearly everywhere are related to near term, within this particular paradigm or money system.

Since I know that this money system cannot mathematically continue forever, I avoid placing the bulk of my assets in this system.

Will gold and silver make me rich? No.  Gold and silver will allow me some protection of my accumulated surplus labor.

Investing today is nothing more than gambling.  I am not very good at gambling.  So I don't do it.

If we were ever to return to a market based system, and that includes public money (be it gold, silver, donkey turds or seashells), then looking at all of the reams of data and trying to secure my future within that system will once again become a possibility.

I know enough about this system to avoid it.  


Tue, 05/22/2012 - 12:55 | 2451481 Non-overlapping...
Non-overlappingMagicCereal's picture

And you are protected against runaway inflation, no doubt about it.  On ZH, runaway inflation is a foregone conclusion, and that's what I suggest should raise a few eyebrows.

No matter what you do with your money, you are placing a bet.  If you are young, your PM investments will not appreciate above inflation because you aren't 'invested' in anything productive.  You can *probably* expect to do well against inflation, although if PMs are currently at a cyclical high (as they tend to be in climate's such as this), you will likely lose whatever that gap is over the average demand.  If you are near retirement, that will be a tough pill to swallow.

In the ZH world, it isn't likely that PMs are undervalued and subject to price manipulation, it is a 100% certainty.  It is that certainty, particularly in light of the dubious evidence and analyses provided by ZH contributors day in and day out, that baffles me.  You can restate the rationale, but I follow ZH so I know them all, and I find them to be almost uniformly half-baked.  Perhaps the prognostications will come true, but it won't be due to any real insight.

Tue, 05/22/2012 - 13:14 | 2451546 Kayman
Kayman's picture

"In the ZH world, it isn't likely that PMs are undervalued and subject to price manipulation, it is a 100% certainty.  It is that certainty, particularly in light of the dubious evidence and analyses provided by ZH contributors day in and day out, that baffles me.  You can restate the rationale, but I follow ZH so I know them all, and I find them to be almost uniformly half-baked.  Perhaps the prognostications will come true, but it won't be due to any real insight."

Another fucking bullshit "Scientist". When you can integrate Quantum Mechanics with the Theory of Relativity let us numbskulls at ZH know.

Like everything else, science is grounded in belief.

7 weeks and 4 days, and already the self-appointed Master of the Universe. 

Tue, 05/22/2012 - 13:31 | 2451577 Non-overlapping...
Non-overlappingMagicCereal's picture

The only argument I have made is that we be more modest about what we can claim.  I most certainly do (and have) included myself in this.  If you bother to look, you will be surprised to find that I have not made a single prediction about anything.  I should think the Master of the Universe permits himself a bit more latitude.

But sure, allow me to apologize on the behalf of science for not having every answer to everything at the moment.  They are working on it.

Tue, 05/22/2012 - 15:25 | 2452235 Kayman
Kayman's picture

I don't know if you missed the "inflation in what you need and deflation in what you own" debate on ZH.

I, like you (seem), have a lot of faith in science, but it is just that- faith.  The more I watch developments in physics, the more I think we know so very little, if anything at all.

And I have come to believe that economics is nothing more than clothing the wolves in academic justification; the legalistic kind.


Tue, 05/22/2012 - 15:59 | 2452494 Non-overlapping...
Non-overlappingMagicCereal's picture

I have no faith in science whatsoever.  I have confidence in models which are predictive, of which science has produced many.  If the predictions are always right, understanding doesn't really matter (I would risk my life on our models of quantum physics, even though we don't have any idea *why* they are true).

I agree that economic models are much more fluffy.  Although microeconomic theory is pretty sound, macroeconomics is far more difficult, but that's exactly what ZH claims to understand and predict so well.  I think most macroeconomic predictions are crap when they come from economists, but at least they are well reasoned in many cases.  When made by ZH, which makes very basic mistakes in their analyses, I regard them as essentially random.

Tue, 05/22/2012 - 13:15 | 2451554 pods
pods's picture

In my mind deflation is a foregone conclusion actually.  It always struck me odd why so many economists were worried about deflation.  I thought that deflation was actually beneficial to me.  Increased productivity allows for reduced prices.  Why would an economist worry about deflation?

Then I learned of the real origins of money, and our debt money system.  

When I learned of the mechanics of our actual money system, it became clear that this system cannot continue, and the exponential increase in money supply needed to avoid deflation cannot happen.

So I looked back at history to see what was accepted for trade.  Gold and silver was what seemed to suit me best. I am still young, so buying large amounts of land was not a good bet for me yet.  And land is priced high due to the financialization of purchases through mortgages.  I did buy a house (before the run up), but not as an investment, and the only bet I made is with an ARM, which puts me on the side of the FED, as my rate is now 2.5%.

If I was to try and get ahead within this current system, the technical information on ZH would be what I would use.  But I do not have the time to dedicate to it, and like I said, I am not good at gambling.

Alot of the prognostications are based on the data, etc, but they can be trumped because the rules are changed.  So alot of the time it is like trying to win at Calvinball.  Every time you make an accurate prediction, the result of your prediction does not come to pass due to some political intervention.

So you have to use both analysis of data, and a guess as to the will of the politicials to be right.

That is too tough for almost anyone to do on a regular basis.  

Many of the mainstream economists that make right calls only base their stuff on political analysis, not market analysis.  Does that make them good?  Or connected?



Tue, 05/22/2012 - 13:30 | 2451603 Non-overlapping...
Non-overlappingMagicCereal's picture

Why on earth would you invest in PMs if you expect deflation?  By definition, they will depreciate against the deflating currency!

Deflation is bad because it discourages risk, both in the form of investment and lending.  This makes it very difficult (and often impossible) to begin capitalistic ventures, purchase real estate and obtain an education because noone will contribute capital.  Why take risk if your money becomes more valuable under a mattress?  As you can imagine, this is absolutely devastating to economic growth.

No one worries about that now, because they can quite rightly see that the recent economic devastation was due to too much lending, too much risk taking, too much debt.  As you suggest, though, that pendulum can certainly swing back, with perhaps even greater consequences. 

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