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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.

WA NA BE.

ori

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.

ori

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 value.............in 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

CLARK

 

No, no, 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--

WILL

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

your contention.

CLARK

Hang on a second.

WILL

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.

CLARK

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

drastically underestimates the impact of social di--

WILL

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 own..as 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.

CLARK

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.

WILL

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 pullover...so 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:

http://www.youtube.com/watch?v=2ZEMmewFj6k

 

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

Unless they're "Austrian", right? 

....

Right?!??

.......

Hello?

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.

pods

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.

pods

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

Yes, clearly I do.

Sigh...

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.  

pods 

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?

pods

 

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. 

Tue, 05/22/2012 - 13:45 | 2451646 pods
pods's picture

I invest in PMs due to human nature.

That as soon as deflation starts to rear it's ugly head, everyone will scream that something must be done.

Same thing that happened in 08 when the aggregate debt cuve started to roll over.  We got printing.

Deflation is the thing to worry about, but PMs are what will protect me from the response I guess would be a better way to state it.

 

Tue, 05/22/2012 - 13:53 | 2451682 Non-overlapping...
Non-overlappingMagicCereal's picture

Sorry, it seems like you've just inserted an intermediate step and left the conclusion unchanged.  Am I missing something?

Tue, 05/22/2012 - 14:03 | 2451722 pods
pods's picture

Sorry if I was confusing.

Debt loads are too high, private debt loads rolled over in 08.  Goverment stepped in.  Government (FED) debt is going to rile enough to vote in austerity in 12.  Then we have a severe deflationary bout in 13 followed by mass printing and a currency crisis.  

Which can be trumped by a concerted effort of world powers sidestepping the USD, which ZH has been all over with detailing.  An extra national effort can crash the currency faster than we can internally.

The conclusion is that we will have a currency crisis.  The cause will be severe deflation.  
So a big debt deflation is what worries me, or moreso the cure for it.

pods 

Tue, 05/22/2012 - 14:21 | 2451823 Non-overlapping...
Non-overlappingMagicCereal's picture

OK, so here's my grand point.  Everything that you have said there is plausible, but the idea that you could predict with even 80% certainty that any individual component is going to happen is, in my opinion, deluded.  ZH is sure of itself (or, conceivably, pretends to be because it drives up the value of their investment choices), but have you scrutinized their claims?  How reliable are their sources?  Can they really know the things they claim know?  Is their reasoning based on robust logic, or is there a lot of innuendo, hand-waving and vagueness?  I implore everyone to view ZH contributions in this light and see if they hold up.

Even if individual predictions were 80% accurate (which, in macroeconomics, would merit ZH several Nobel prizes of their own), that is nowhere near good enough to reliably predict an eventual outcome.  You have 5 steps in your sequence of events that leads to currency collapse.  That's 5 links in a chain, all of which must be true.  Assuming a generous 80% probability of each prediction being correct, the ultimate outcome is still 0.8^5 = 32% likely.  Is that enough to justify a PM portfolio?

Tue, 05/22/2012 - 15:02 | 2452043 pods
pods's picture

My scenario was one of a series of unfolding events.  But those events are not mutually exclusive, nor do they influence the final outcome.

There is one problem.  And that problem has a certain outcome.

You cannot emit a currency based on debt with interest attached.

If you do that, it will eventually collapse.  It is an exponential function that will implode upon itself.

My "events" are mere storytelling of how it will unfold.  

So my justification is that there has never been a fractionally reserved currency that has survived for more than like 70 years or so.  We went zero reserves in 71 internationally, in about 64 internally not counting the Kennedy halves. 

So in actuality, I have one event:  The end of the USD.  

pods

Tue, 05/22/2012 - 15:23 | 2452228 Non-overlapping...
Non-overlappingMagicCereal's picture

If debt-to-GDP increases monotonically, it is unsustainable.  At ZH, it is heresy to suggest that debt-to-GDP could ever decrease.  But it has in the past, and for decades at a time (1940s to 1980s, and from the mid 90s to the mid 00s).  

I know, - this time is special, it's different, right?  If you want to build that case, it's dirt simple.  You just look at the most pessimistic metrics, and believe only the most cynical commentary.  That's the nasty thing about complexity, you can convince yourself of whatever your heart desires.  You can look at corruption and say America has never been more corrupt, look at debt levels and say we've never had more, look at entitlement obligations and say we've never had a more imposing budget gap.  But are these claims true?  How bad have things been in the past?  Corruption, debt, irresponsible spending - these things have been around for ages in spades and so it always shall be.  And yes, ZH, on a long enough time scale....yadda yadda yadda.  But on a long enough time scale, it's eash for a prediction to be off by a decade, or a century, or several.  If the USD doesn't know it's time is up, there is no grim reaper to come claim it.

This sort of cynicism about the US economy, and it's currency, was even more prevalent in the 70s.  It's been 40 years, we're still waiting...

Tue, 05/22/2012 - 15:55 | 2452477 Kayman
Kayman's picture

"Consensus on ZH" ?  You better read the archives.  You are starting to sound a little bit trollish now.

Increased effort/productivity yields lower costs, ergo, a better standard of living.

Inflation allows the parasites to rob productive people of their efforts, through financialization.

There can be a solid argument for general price stablility, but the argument in favor of inflation is a convoluted academic justification for theft. 

Tue, 05/22/2012 - 16:09 | 2452550 Non-overlapping...
Non-overlappingMagicCereal's picture

Did I ever say 'consensus on ZH'?  I don't believe so.  But I certainly will, if it helps: there is a consensus (or something very near it) on ZH that our currency will collapse, and that PMs will benefit.  Point me to evidence in the archives to the contrary.

As far as the argument for inflation, I did not say that there were not other valid arguments to be made.  Of course there are, but then again I don't have any fear of knowing the arguments to be made on all sides of an issue.  In fact, I don't even recall endorsing inflation myself, only explaining the dangers of deflation, so your response is perplexing on many levels.  As far as inflation being theft - yea, fine, whatever, so is any form of taxation (and I do agree that inflation can be used as a particularly devious form of taxation).  However, I do not find this line of reasoning to be particularly useful for anything other than demagoguery (and excusing oneself from having to actually reason through an issue).  Again, that is not reason in and of itself to endorse a modest inflation rate, it's just (if you will excuse the double negative) not a reason not to.   

Tue, 05/22/2012 - 16:34 | 2452660 SDRII
SDRII's picture

Fascinating thread: a tactical rhetorical preview h/t Cass?

You (Watson) seem to be full of arguments against PMs, parroting the dribble from Nebraska. Perhaps you would like to expound on the projected return on your average college education these days? What is a "productive" investment?

Is insurance a "productive" use of capital aside from the wash through effects of debt absorption, itself a facilitator of global misallocation of resources at the most basic level (vs. the simplistic US overconsumption arguments). How is “free float” compatible with no arbitrage pricing?

Is a 6000 sq ft house atop productive land a productive investment? 

Is Facebook a productive investment? Is Afghanistan a productive investment? Is Nabucco a productive investment? What about TAPI? Are US drone bases and operations in Ethiopia a productive investment? Is missile defense a productive investment? Are bank deposits a productive investment? Zumis? Humanitarianism?

How do you define productive? Is it complex? Is it situational? Does it abide by the laws of thermodynamics? Does it abide by any laws?

You make no argument by your own admission, so what is your point other than to highlight the uncertainty principle, something beaten to death by Z/H countless times? You say the probability of the chained event is 32%? Could you provide the alternative range of outcomes you envision and their associated probabilities if onbly to tabulate an expected value?   

Is your poin that complex systems are risky? Thank you. You deserve a fellowship in Santa Fe.  Now dazzle us with how complex systems ventilate themselves? They do don’t they? Eventually? Can you burn down someone elses village to save yourself? 

As far as complexity could you enlighten us on how US tactics in Syria, Yemen, Sudan, Nigeria, Columbia, Eurozone, China, Egypt, Iran, Pakistan, Russia and Japan relate the dollar reserve slippage? Is there a correlation to be had between dollar slippage and the increasing velocity of US maneuvers (overt, low intensity & or proxy)? How does this velocity increase if any tie back to the exploding derivatives CAGR? Does any of this have to do with the fiat triumvirate of the dollar, euro and yen?

Could you give us a brief on the probability that Noda will avoid elections or whether Ozawa will emerge as a renewed force for a more independent foreign policy? What are the probabilities associated with a Japan-Russia-China axis? What are the probabilities that Japan does build a pipeline to Russia? Is the yen ventilating a drift away from the US and into an ASEAN orbit? Is there some similarity between circumstances surrounding Ozawa and DSK?

Finally explain how deflation comports with a highly leveraged entity - HLT? Then give us your definition of HI. Please include a discussion of confidence and how the growing bilateral tentacles/clearing worldwide are related? Tie the discussion back to the increasing velocity of US military operation and the importance of finding cheaper drone based replacements and the rolling over of "soft dolalr" arrangements. Please explain how $90 plus oil is deflation? Is deflation measured in years, minutes or nanoseconds?Does deflation mean never looking in the rear view mirror?

Is US wage inflation compatable with globalization? If not, then what? They say cheaper refrigerators make me richer? Is that deflation good? Are higher material costs productive (forewarmned: trick question)? 

Now that we are both looking at the same complex system and have established that the complexity shape shifts depending on your view, could you articulate how you think tension and scarcity aerate US foreign policy and currency management?

Better yet just explain to us why deflation discourages investment and inflation encourages it? Are resources worth more in the ground? Incorporate a discussion of the 70s and bookend it with a review of the crisis years of late. Don’t forget the broken window fallacy (including the gold shattering in the 70s).

Tue, 05/22/2012 - 17:16 | 2452791 Non-overlapping...
Non-overlappingMagicCereal's picture

Seriously?  I didn't think anyone argued this point, even on ZH.  Capitalistic enterprises grow, property can be rented and folks will be paid interest on lent money of many stripes.  You don't want to ask about the return on my education, trust me.  I have one of those math-oriented degrees, they appreciate just fine.  Gold sits there, which is fine, it can usually hold its value well, but you certainly won't be getting a dividend from a block of metal (nor will any new Au atoms materialize).

As far as everything in the middle of your rambling, unfocused solilquy, I don't care what particular bees are in your bonnet, except to point out that everything there (if true) introduces uncertainty.  Uncertainty makes prediction even harder, which is my only point.  Keep in mind, I have made no predictions of my own, and it worries me that folks around here are so confident in theirs.

And on your last point, I already explained why deflation discourages investment.  It isn't a difficult point to grasp.  It is even easier to understand why inflation encourages investment, since it encourages getting rid of dollars as fast as possible (be it into PMs, real estate, bonds, stocks, or straight up consumption).  It's adorable that you could not figure that out for yourself, and then tried to condescend to me as though you were giving me an assignment.  If I were you, I would print out your message, and read it back to yourself every morning.  After a month or two, you will better person, I promise.

Tue, 05/22/2012 - 22:43 | 2453784 SDRII
SDRII's picture

I will grant you that for all your drivel you did manage to tease out one small kernel of truth (maybe): cntr-p = inflation = velocity. Not so about the velocity = productive investment.

Now if you could only grasp that gold is not an investment, but a currency. Think of it as a weigh station to you promised land of productive investment. Unfortunately the road signs are obscured by your cure which therefore exacerbates signal disruption and prolong malinvestment cycles. But you know that don;t you. It is actually malinvestment that you are after isn't it? That is what creates wealth?

For tomorrow's assignment walk yourself through the CAGR of a 3% dividend in a ZIRP world assuming capital risk of what ~50% ex interventions? Out of curiosity, when you buy a stock - ex primary - who gets the money? And what makes you so sure that the next link in the chain will allocate the capital efficiently?Are you an EMHer and a MMMer..

Of course your entire premise is based on an inflating market masquerading as growth >  a return to tulip/nasdaq/bubble with malinvestment the cost of progress. Maybe you are right (just say it), but given you math degree, what does the complexity model say about total return in such a scenario. Here is a hint: begins with black and ends with swan.

So I agree with your point the world is uncertain. So? Now could you explain to me why you are so certain that deflation is worse than inflation other than the illogical leap that inflation = velocity = investment 9in what, subprime, pets.com, etc)? What makes you so certain that everyone else's certainty is misplaced? 

You have 3 points: (1) the world is uncertain, (2) inflation drives productive investment and (2) PM are not productive (but they are an investment per your last statement). I am having trouble with the math here.

All that when I could have gone to Krugman's blog

 

 

 

 

Tue, 05/22/2012 - 13:12 | 2451541 newworldorder
newworldorder's picture

RE: Non-overlapping

A distinction has to be made and utmost respect given to those scientists who live in the real world and whose work is defined by the "hard" sciences, especially where math and physical laws prevail. The same cannot be said for the "soft," predictive or social sciences where the "charlitans of the day" prevail.

When an engineer/scientist tells me that 2+2=4 I tend to believe them. When an economist tells me the same thing, I look up to see if a bankster or politician is pulling their pupet strings.

Tue, 05/22/2012 - 13:17 | 2451559 Kayman
Kayman's picture

Current discussion of Krugian Bullshit excepted, but the whole can often be greater than the sum of the parts, so the 2+2=4 child's arithmetic doesn't necessarily apply.

Tue, 05/22/2012 - 13:35 | 2451618 Non-overlapping...
Non-overlappingMagicCereal's picture

That's a sensible policy, as far as it goes.  It becomes dangerous when anyone with whom you disagree is a 'charlatan'.  I hope you one day have a chance to have a beer with a 'puppet' economist, and discuss your concerns with him or her.

Tue, 05/22/2012 - 11:54 | 2451229 Kayman
Kayman's picture

Economics cannot be separated from politics. And once the control of money is granted to the "all-knowing elites",  you can throw your economic textbooks in the trash can.

Tue, 05/22/2012 - 12:29 | 2451361 Nachdenken
Nachdenken's picture

Economists here seem to be in the sense of academics - theoreticians who work for whoever pays them.  Who pays the piper calles the tune. Professionall integrity is a phrase forgotten and forlorn.

Tue, 05/22/2012 - 11:16 | 2451063 Pairadimes
Pairadimes's picture

"You talkin' to me?"

"Yes, Krugman, I'm talkin' to you!"

Tue, 05/22/2012 - 11:22 | 2451077 Non-overlapping...
Non-overlappingMagicCereal's picture

Precisely!  Clearly the folks who know the least about economics are the people who study it their entire lives, because we all know that multi-variate calculus (or any mathematics beyond grade 7) are for effete, corrupt 'intellectuals'.  Real insight comes from gut instinct and half-baked financial analyses based on superficial univariate 'technicals' and charts.  God bless you, Zero Hedge, what the world do without you?

Tue, 05/22/2012 - 11:26 | 2451092 New England Patriot
New England Patriot's picture

Not exactly. Real audacity is using multi-variate calculus (or any mathematics beyond grade 7) to attempt to prove that one plus one does not equal two. 

Tue, 05/22/2012 - 11:29 | 2451103 Non-overlapping...
Non-overlappingMagicCereal's picture

That's a hell of a paper!  Citation?  

 

I await with bated breath.

Tue, 05/22/2012 - 11:52 | 2451221 pods
pods's picture

That one is easy:

"How many fingers Winston!"

 

Tue, 05/22/2012 - 12:09 | 2451284 MeBizarro
MeBizarro's picture

So we should use basic alegbra and geometry and skip the rest?  Not sure what your point is.

Tue, 05/22/2012 - 12:24 | 2451341 Non-overlapping...
Non-overlappingMagicCereal's picture

Yea, I think you've got it (though we probably don't need that geometry voodoo either).

Tue, 05/22/2012 - 14:32 | 2451875 MeBizarro
MeBizarro's picture

Sadly too many Americans would probably seriously agree with that. 

Tue, 05/22/2012 - 11:21 | 2451079 Bluntly Put
Bluntly Put's picture

Mainstream modern eCONomics is so simple even I can paraphrase it:

Don't worry people, the never ending incremental growth of the central state (and its associated mountains of debt) that blurs former sovereign (nation state) borders and continually erodes your individual freedoms while consolidating more and more power into major corporate power(s) will lead to your prosperity since you can buy ownership in it (if you have any cash or preferably credit).

Tue, 05/22/2012 - 11:23 | 2451084 Non-overlapping...
Non-overlappingMagicCereal's picture

You got it, sir, and it didn't even require a college diploma to sort it out!

Tue, 05/22/2012 - 11:25 | 2451088 economessed
economessed's picture

Gulp.  What about delivering a beat-down to politicians, trial lawyers and real estate agents first? 

Tue, 05/22/2012 - 11:30 | 2451112 bdc63
bdc63's picture

love the username

Tue, 05/22/2012 - 11:26 | 2451091 Nothing To See Here
Nothing To See Here's picture

F. A. Hayek

Prize Lecture

Lecture to the memory of Alfred Nobel, December 11, 1974

The Pretence of Knowledge

The particular occasion of this lecture, combined with the chief practical problem which economists have to face today, have made the choice of its topic almost inevitable. On the one hand the still recent establishment of the Nobel Memorial Prize in Economic Science marks a significant step in the process by which, in the opinion of the general public, economics has been conceded some of the dignity and prestige of the physical sciences. On the other hand, the economists are at this moment called upon to say how to extricate the free world from the serious threat of accelerating inflation which, it must be admitted, has been brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.

It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences - an attempt which in our field may lead to outright error. It is an approach which has come to be described as the "scientistic" attitude - an attitude which, as I defined it some thirty years ago, "is decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed."1 I want today to begin by explaining how some of the gravest errors of recent economic policy are a direct consequence of this scientistic error.

(...)

http://www.nobelprize.org/nobel_prizes/economics/laureates/1974/hayek-lecture.html

Tue, 05/22/2012 - 11:32 | 2451117 Non-overlapping...
Non-overlappingMagicCereal's picture

Shorter version: all economists are idiots and wrong about everything...

 

Except for the ones I already happen to agree with.

Tue, 05/22/2012 - 11:27 | 2451095 LouisDega
LouisDega's picture

Hmmmmmmmm. Oops, Wrong post. I was looking for the things that make you go hmmmmmm post. My bad.

Tue, 05/22/2012 - 11:29 | 2451105 kridkrid
kridkrid's picture

Great video.  For those who are skeptical of ideas like these based on a the perceived level of orchestration that would need to happen, I recommend reading the first few chapters of "Manufacturing Consent" by Noam Chomsky.  The system becomes self selecting over time.  There is no need to choreograph to the minute detail as the system rewards and ultimately creates conformity.  It grinds to a pulp dissent... but gradually enough to keep it hidden.... or at least difficult to perceive.  

Tue, 05/22/2012 - 11:30 | 2451107 mayhem_korner
mayhem_korner's picture

 

 

Economists, like sports pundits, should not forecast anything.  Just give us facts and correlations but spare us the predictions.  Then get out of the way and let the markets develop a consensus view (clearing price) and value the uncertainty with options. 

Tue, 05/22/2012 - 16:19 | 2452592 Dr. Acula
Dr. Acula's picture

>Economists, like sports pundits, should not forecast anything.

Economists qua economists cannot forecast.

Thymologists can forecast:

"Austrian Thymologists Who Predicted the Housing Bubble" http://www.lewrockwell.com/block/block168.html

 

Tue, 05/22/2012 - 11:32 | 2451118 theTribster
theTribster's picture

He's right on target. Economists are like home appraisers, they tend to always justify the price of the home because they want to move the market and make the realtors happy. This is true with economists, they are there to serve their masters, the 1%. This is why the financial system we have is so efficient at transferring wealth to the wealthy - its fucking rigged game.

Its the rare economist that has the correct vision of economics becuase they have to be disconnected from the overriding paradigm in order to have a clear vision. This clarity cannot be achieved by western educated economists because they are all assimilated into the existing paradigm and once there it is very difficult to break out.

When a guy like Krugman gets the Nobel Peace Prize (not to mention Obama) you know the system is completely rigged.

Tue, 05/22/2012 - 11:44 | 2451156 Nobody For President
Nobody For President's picture

Uh, Krugman was awarded the Nobel in Economics - Obama  the Peace Nobel. Both rather ludicrous - and I don't use that word very much, 'cause I'm a country boy and don't talk fancy.

 

But there are economists that go into the real world to put your money where their mouth is - Nobel economist Myron Scholes, one of the main men behind LTCM, for example...

Tue, 05/22/2012 - 13:28 | 2451596 Morrotzo
Morrotzo's picture

Voting for FISA immunity, waging 2 simultaneous hot wars, endless imprisonment with a side order of torture (no trial needed), assassinating U.S. citizens for speech crimes without trial, using the CIA and other agencies to foment violent rebellions, and selling the most small arms in mankind's history=Nobel Peace Prize

Paul Krugman's Nobel Prize in "Economics" is the equivalent to Barracks O-bomb-a's Nobel Peace Prize. Stimulus and QE weren't large enough! We can debase currency as we please! Wage a war against Martians to boost the GDP!

 

 

 

Tue, 05/22/2012 - 11:37 | 2451141 azzhatter
azzhatter's picture

I think that LIESman guy is pretty.......oh......wait, he's a journalist (and a Fed dicksucker)

Tue, 05/22/2012 - 11:40 | 2451157 brodix
brodix's picture

Having come to the conclusion many years ago that it was propaganda, These are some of my observations on economic realities:

" To the banking system, money is a commodity that is manufactured by creating demand for it. Therefore it is in the interest of banks to create as much debt as possible, but there are limits on how much debt the economy can support, so there is a finite amount of notational wealth that can be sustained in a healthy economy. We lose sight of this, when everyone wants to save as much money as possible. The theory behind supply side economics is that the more notational wealth that can be accumulated, the more capital there will be to invest and expand the economy, but it is demand for goods, the supply of resources and the ingenuity to match them that really determines how much the economy can grow, not how many units of otherwise underemployed currency are available.


 In the early 1980’s, Paul Volcker was credited with bringing inflation under control.  As Federal Reserve Chairman, Volcker’s main tool for reining in the money supply was to raise interest rates and make money more expensive to borrow and thus reduce the amount going into the economy. He could also draw money out of the economy by selling government bonds that were bought by the central bank to create money in the first place. The logic of this is problematic though, as higher rates punish those who want to borrow money and reward those with money to lend. This has the perverse effect of trying to solve an oversupply of capital by raising the cost and reducing demand. 

 It also happened that around that time, Ronald Reagan was elected president and initiated what came to be known as Reaganomics. This was to cut taxes, increase spending on the military and borrow lots of money. To the extent the tax breaks were spent, rather than saved, it increased demand for production, helping the economy to grow. What is overlooked is that the large amounts of government borrowing served to increase the demand for capital. Since the Treasury sells far more new debt then the Federal Reserve sells of what it is holding, this government demand for capital had to be a significant factor in bringing inflation under control. Not to mention that spending the borrowed money served as a Keynsian stimulus to the economy, further increasing the private sector demand for capital.

 By the Fed’s own logic of selling bonds to reduce the money supply, a surplus of capital is in the hands of those with a surplus of wealth. Having the government borrow this surplus in order to spend it is not a strategy that works for the long term, since the interest paid adds to the oversupply of excess capital, while eventually reducing the ability of the government to spend on public investment. When the government spends money, it is to support a functioning society and economy and the only way to realize a gain from that investment is through taxation. Since the primary way for government to raise the money to pay off loans is through taxation, does it make sense to buy government bonds, then lobby against taxes, other than to game the system?

  What the people in charge came to understand is that lots of money can be created, without causing general inflation, if it can be largely kept out of the regular economy. While a lot is loaned back into the economy, much is cycled within the banking system. All that "liquidity," as derivatives, securities, off balance sheet vehicles, etc, is mostly just chips in the casino. It is a very delicate balancing act of enormous notational wealth, that amounts to a large tumor on the real economy. The issues affecting the financial system are like symptoms of coronary disease; An overtaxed heart(central bank), patched together main arteries(big banks), clots and clogs in the minor ones(corruption and misallocated resources), high blood pressure(quantitive easing), but poor circulation in the extremities(rest of the economy).

 This isn’t just the fault of those controlling and profiting from it, but is the current financial model being carried to its logical extremes. Money is commodified trust and it has been both the vehicle for powering human civilization to its current heights and what is now driving it over the edge. If we collectively make more promises to ourselves then we are willing and able to keep and hire the politicians and financial managers opportunistic enough to voice those promises, we will eventually be quite disappointed."

http://www.exterminatingangel.com/index.php?option=com_content&task=view...

Tue, 05/22/2012 - 11:45 | 2451190 Sandmann
Sandmann's picture

It is called OVERFUNDING and is basically the only way they can control the Monetary Base without collapsing the pyramid the Private Banks have created since they get to tender Bonds rather than have their balance sheets subjected to a tight squeeze. It is really a problem using Monetary Policy in place of Fiscal Policy but that was the mantra for the 1980s. Reagan ran a loose fiscal policy with Volcker imposing a tight monetary policy to compensate and the US Dollar became strong widening the US trade deficit and making oil expensive in Europe until the Saudis decided to open the taps in 1986 during the Iran-Iraq War and put Texas underwater

Tue, 05/22/2012 - 13:03 | 2451504 brodix
brodix's picture

Then it blew up in Oct 87 and Greenspan went to a loose monetary policy too.

Tue, 05/22/2012 - 13:25 | 2451587 Kayman
Kayman's picture

The Fed is not helping the economy, nor do the intend to help the economy.  They are shoring up the decaying flesh that is otherwise known as bank assets.

Tue, 05/22/2012 - 11:41 | 2451161 Sandmann
Sandmann's picture

In the 1970s you often had Economists from Universities giving a view - then the 1980s saw Universities bought by Banks and Economists hired to sing for their supper. Research funding required "business" focus and soon most Research Departments in Universities were bought and paid for by corporate "philanthropists" and the Economists like the Medical Researchers had to perform for the Sun King who sponsored them. The mEdia then decided that only Economists accredited by Banks were acceptable and the whole Fairy Tale World came into being

Tue, 05/22/2012 - 11:46 | 2451196 i_call_you_my_base
i_call_you_my_base's picture

1) the system depends on faith

2) employees depend on the system

3) employees depend on faith

4) employees become advocates of the faith

Tue, 05/22/2012 - 11:54 | 2451226 carbonmutant
carbonmutant's picture

During the classical period, economics was closely linked to psychology. The Modern economist's fantasy of reshaping the discipline into a natural science has led to  a heavy focus on theory and math. Unfortunately there are some human fears and desires that you just can't quantify or commodify into an economic model.

Trying to  attribute everything to an economic factor just perpetuates the failure of the Marxism, which is why we see so many economists leading the current socialist agenda.
Tue, 05/22/2012 - 11:58 | 2451241 Joe The Plumber
Joe The Plumber's picture

Some economists who are not Hayek dont realize that economics is a complex system with emergent properties unpredictable by knowledge of subcomponent systems and their typical interactions

Singularities await the unwary

Faith cannot be bought. It cannot be adjusted incrementally by fiscal and monetary policy changes. Risk tolerance and monetary velocity is nonlinear usually at the worst possible time

Tue, 05/22/2012 - 13:32 | 2451609 Kayman
Kayman's picture

Joe The Plumber

Faith and Trust.  The (unwritten) foundation of economics, and ultimately all transactions.

I don't know how many decision makers believe the game is rigged, but it must be approaching a majority.

 

Tue, 05/22/2012 - 12:15 | 2451307 XitSam
XitSam's picture

I need to read some of Michael Shermer's writing again with an eye toward economics that I did not understand when first read. He has a new(ish) book The Believing Brain: From Ghosts and Gods to Politics and Conspiracies that seems interesting. Also, Liars and Outliers by Bruce Schneier.

Tue, 05/22/2012 - 12:25 | 2451343 Nachdenken
Nachdenken's picture

Markets are the message.  Understand that, and trade it  As long as you are ahead, you are right, if not, re read the message.

Tue, 05/22/2012 - 12:29 | 2451347 willien1derland
willien1derland's picture

The primary issue for economists presently is weighting the event factors - which is absolutely impossible due to the potential permutations; As an example with interest rates unreasonably low & proported affordability so high home sales are horrible - because the REAL economy has been fabricated - Apply Okun's law which is the tried & true method of empirically determining the observed relationship of unemployment to losses in a country's production; i.e. GDP - At present rate the true GDP would need to be equal to/or greater than 4.4%!

Most demand/supply models are absolutely useless due to the policy distortions & monetary manipulation which continue to divorce reality from results...Supply-side analyst persistently indicate how cheap a security is without mentioning the fact that it is IMPOSSIBLE to value said security because of the distortion that ZIRP creates - The analogy I have made is that the patient is on life support, vital signes (economic indicators) are stimulated to promote the concept of growth & the 'doctors' (read government officials) use electrodes to mimic reasonable physical responses - the patient's family, wanting to hope for the best for their ill relative (the US) ignore the fact that the doctors are manipulating results hoping for a damn miracle - the problem is we are deluding ourselves - we continue to mistake debt for revenue - simply look at the national debt clock recognizing that last August the US raise its debt ceiling & we have blown thru more than a TRILLION dollars!!! GDP - the measure of flow thru the entire US economy is measureed at $15.7 trillion & we merely borrowed another TRILLION + to promote the illusion -

But wait, let's go back to sleep & listen to CNBC BS artists demand more Bennie Bucks  - My wish is that EVERY FUTURE CHILD could be transported back in time to this moment & take their revenge on TPTB - We are spending their money without permission or concern - last time I looked that was stealing -  

Tue, 05/22/2012 - 12:31 | 2451366 Winston Smith 2009
Winston Smith 2009's picture

I agree with what he says in the interview with the exception of his claim that "they did a great disservice to mankind and we're cleaning up after that now." 

No, we're not "cleaning up after that," we're papering over it with more stolen loot on the taxpayers' tab.

Tue, 05/22/2012 - 12:32 | 2451377 Temporalist
Temporalist's picture

Robert Johnson would be 101 years old as of last week. 

Robert Johnson sure knows about the devil:

http://www.youtube.com/watch?v=Yd60nI4sa9A

The world is at a crossroad and I believe it's sinking down.

Tue, 05/22/2012 - 12:46 | 2451437 MayerRothschild
MayerRothschild's picture

Saw a great comment about this once... I forget where though

A mathematician, a statistician and an economist are applying for an accounting job.

The interviewer calls them into the room one by one

He asks them one question.

What is 1 + 1?

The mathematician answers 2

The statistician answers 2 +/- 10%

The economists draws the shades locks the door and says 'What do you want it to equal?'

Tue, 05/22/2012 - 12:53 | 2451470 web bot
web bot's picture

Absolutely brillant and honest...

Tue, 05/22/2012 - 13:03 | 2451500 circusmaestro
circusmaestro's picture

Echoing Robert Jonhson's musings, here is Beinhocker's take "Where do economies come from? How is a complex economic ecosystem such as the Promised Land economy conjured out of a pile of garbage? How do the behaviors, relationships, institutions, and ideas that underpin an economy form, and how do they evolve over time? Questions of origins play prominent roles in most sciences. It would be difficult to imagine modern cosmology without the Big Bang, or biology without evolution. Likewise it would be hard to believe that economics could ever truly succeed as a science if it were not able to answer the question "Where do economies come from?" Yet the question of the origin of economies has not played a central role in Traditional Economics. As discussed, Traditional Economics has tended to focus on how the economic pie is allocated rather than how the pie got here in the first place. Even Traditional growth theory implicitly begins with "assume an economy.""

Tue, 05/22/2012 - 13:03 | 2451501 bankruptcylawyer
bankruptcylawyer's picture

ECONOMISTS????

HOW ABOUT LAWYERS!?!?!?!?  

i am a lawyer and i'm still new enough ( 5 years of experience ) to be honest about how lawyers, and the legal profession, are fleecing society. 

it is no accident that the medioric rise of the legal profession over the past thirty years has coiincided with the complete and utter infiltration of government and the legal code with corrupt and destructive interests of the power structure. 

we are not a nation of laws. we are a nation lawyers. 

Tue, 05/22/2012 - 13:09 | 2451511 ArrestBobRubin
ArrestBobRubin's picture

Notice how true and prevalent this dynamic is among medical doctors too. My doctor is every bit as arrogant and closed off to alternatives as the average Keynesian.

I baited him with a good question about clinical trials and the actual safety of commonly prescribed meds like anti-depressants and statins.

He started to tell me about the "peer-review process". I asked him "well, what if all the peers are similarly trained and preprogrammed to stay inside the lines, like a bunch of lab rats, or Keynesian economists?"

He did not look particularly amused.

Tue, 05/22/2012 - 13:41 | 2451634 Iwanttoknow
Iwanttoknow's picture

Arrestbobrubin,

I should know since i'm one.I keep my mouth shut.You need to realize that except for 5%of top earners,95% are not remotely rich.Most are controlled by MBAs i.e HMOs.If you talk too much,you pretty much get balcklisted.Look at the guy who published about Autism and Vaccines.

Tue, 05/22/2012 - 13:09 | 2451528 Morrotzo
Morrotzo's picture

"We shall surround our government with a whole world of economists. That is the reason why economic sciences form the principal subject of the teaching given to the Jews.

Around us again will be a whole constellation of bankers, industrialists, capitalists and - THE MAIN THING - MILLIONAIRES, BECAUSE IN SUBSTANCE EVERYTHING WILL BE SETTLED BY THE QUESTION OF FIGURES."

If the Protocols of the Learned Elders of Zion is a forgery, it is the damndest and most truthful one ever penned.

Tue, 05/22/2012 - 13:27 | 2451597 vh070
vh070's picture

Economics: common sense turned into nonsense by over-thinking

Economist: unstoppable economic charlatan

Economize: firing your economist(s)

 

 

Tue, 05/22/2012 - 13:53 | 2451678 daxtonbrown
daxtonbrown's picture

I come from a mechanical engineering background heavy on thermodynamics and information theory. From that perspective, the Fed can add near zero and likely negative information to the system - it cannot be smarter than the market, else it would be a perpetual motion machine. That's why you get Biflation - not inflation or deflation alone when the Fed pumps money. It is just pushing on a string. www.futurnamics.com/biflation.php

Tue, 05/22/2012 - 13:57 | 2451695 neutrinoman
neutrinoman's picture

Robert Johnson is a far-left kook, a Soros wannabe, a peddlar of Keynesian snake oil himself.

There are plenty of good economists who are telling people the truth. But the powerful and their flunkies in the media don't want to listen to them.

Tue, 05/22/2012 - 14:11 | 2451766 Blue Dog
Blue Dog's picture

Economists have to be liberal to get jobs in government and academia. It's the same thing with global warming. The vast majority of economists refuse to admit that raising tax rates lowers the amount collected and vice versa. That was the lesson from the Reagan years.

Tue, 05/22/2012 - 15:43 | 2452371 spaniard
spaniard's picture

Tell that to spanish politicians... the are going to raise VAT to 21%

Tue, 05/22/2012 - 16:21 | 2452606 Kayman
Kayman's picture

But, but, but.... isn't VAT coming to America. After all, people love paying more taxes.

And, and,and.... those who live from government checks- Wall Street, crony capitalists (I'm looking at you Warren), and uninterrupted welfare, will vote for VAT.

Then and only then will real economics come in to play.

Let Europe lead the way.  Yahoooooo

Wed, 05/23/2012 - 07:38 | 2454290 tsuki
tsuki's picture

The lesson from the Reagan years is that if you lower the individual tax rate, broaden the base by reducing tax breaks, closing tax shelters and loopholes and make it tougher to evade taxes by increasing the number of IRS employees, you end up with more taxes. 

Wed, 05/23/2012 - 07:38 | 2454291 tsuki
tsuki's picture

The lesson from the Reagan years is that if you lower the individual tax rate, broaden the base by reducing tax breaks, closing tax shelters and loopholes and make it tougher to evade taxes by increasing the number of IRS employees, you end up with more taxes. 

Tue, 05/22/2012 - 14:20 | 2451819 reTARD
reTARD's picture

<--------------- I need them!

 

Just like we need central banks, governments and socialism.

Tue, 05/22/2012 - 17:14 | 2452826 Eric L. Prentis
Eric L. Prentis's picture

Dear Robert Johnson;

 

Your opinion that states the obvious is not worthy of the INET moniker.

 

Where is the data analysis that strikes down hoary old economic dogma, pointing the world in a completely new direction?

Do NOT follow this link or you will be banned from the site!