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It is often opined here on Soylent that Economics isn't real science. You would expect economists to disagree with that sentiment, but it turns out that there is a growing international movement within the world of economics itself, started by a group of students, that seeks to drastically overhaul the entire field. Some choice quotes from the article, which is in fact a review of a book "which formalises and expands the case" that economics is in need of reform:
In the autumn of 2011, as the world's financial system lurched from crash to crisis, the authors of this book began, as undergraduates, to study economics. While their lectures took place at the University of Manchester the eurozone was in flames. The students' first term would last longer than the Greek government. Banks across the west were still on life support. And David Cameron was imposing on Britons year on year of swingeing spending cuts.
Yet the bushfires those teenagers saw raging each night on the news got barely a mention in the seminars they sat through, they say: the biggest economic catastrophe of our times "wasn't mentioned in our lectures and what we were learning didn't seem to have any relevance to understanding it", they write in The Econocracy. "We were memorising and regurgitating abstract economic models for multiple-choice exams."
Part of this book describes what happened next: how the economic crisis turned into a crisis of economics. It deserves a good account, since the activities of these Manchester students rank among the most startling protest movements of the decade.
After a year of being force-fed irrelevancies, say the students, they formed the Post-Crash Economics Society, with a sympathetic lecturer giving them evening classes on the events and perspectives they weren't being taught. They lobbied teachers for new modules, and when that didn't work, they mobilised hundreds of undergraduates to express their disappointment in the influential National Student Survey. The economics department ended up with the lowest score of any at the university: the professors had been told by their pupils that they could do better.
(Score: 4, Insightful) by driverless on Monday February 13 2017, @02:51AM
Friend of a sysadmin who works at a bank checking in here, he's a college drop-out, self-educated. In January 2008 when I was visiting him, he pulled up some data on mortgage defaults across the US. These are in default, these are (effectively in default but not called that), these are ninety days late, sixty days, etc. Now everything sixty days and over is in default, because if you've missed two mortgage payments you're not going to suddenly recover. This means the default rate is actually xx%, not y% like the official figures. Now that's for Minnesota. Let's look at somewhere big like California. Here's the figures. And that works out to $xxxB in effective default in just one state. The finance companies have this much, there's insurance cover but they can't handle this level of default, etc etc. We're fucked. Well, they're fucked, I work for a bank. Anyway, I'm done for the day, where do you want to go for dinner?
This was a random IT sysadmin with no formal education, who saw the subprime crisis and meltdown more than half a year before it arrived. And he wasn't some hidden genius, it was just a regular guy who got bored at some point, looked at the data, and saw what was obvious to anyone with the slightest bit of common sense. It's no wonder that people treat economists as little more than incompetent quacks.
(Score: 0) by Anonymous Coward on Monday February 13 2017, @12:55PM
Plenty of economists predicted the subprime crisis - as in, central bank policy creating investment bubbles especially in real estate - they just weren't published in mainstream media because no one wants to hear that.
(Score: 0) by Anonymous Coward on Monday February 13 2017, @02:19PM
What's that old adage:
"Economists have predicted 12 of the last 3 recessions"