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When Christopher Nolan was promoting his previous film Interstellar, he made the casual observation that "Take a field like economics for example. [Unlike physics] you have real material things and it can't predict anything. It's always wrong." There is a lot more truth in that statement than most academic economists would like to admit.
[...] several famous Keynesian and neo-classical economists, including Paul Romer, [...] criticized the "Mathiness in the Theory of Economic Growth" and [...] Paul Krugman. In this instance, though, Krugman is mostly correct observing that "As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth."
[...] But more fundamentally, as Austrian economist Frank Shostak notes, "In the natural sciences, a laboratory experiment can isolate various elements and their movements. There is no equivalent in the discipline of economics. The employment of econometrics and econometric model-building is an attempt to produce a laboratory where controlled experiments can be conducted."
The result is that economic forecasts are usually just wrong."
"[Levinovitz] approvingly quotes one economist saying "The interest of the profession is in pursuing its analysis in a language that's inaccessible to laypeople and even some economists. What we've done is monopolise this kind of expertise.[...] that gives us power.""
[...] because economics models are mostly useless and cannot predict the future with any sort of certainty, then centrally directing an economy would be effectively like flying blind. The failure of economic models to pan out is simply more proof of the pretense of knowledge. And it's not more knowledge that we need, it's more humility. The humility to know that "wise" bureaucrats are not the best at directing a market "
Economists Are the New Astrologers
(Score: 4, Informative) by Thexalon on Wednesday August 30 2017, @01:25PM (2 children)
Yep, they failed so hard that:
- The unemployment rate, which had shot up to 10% before Obama's policies could take effect, had come back down to 4.8% by the time he left office.
- Working-age labor force participation rate, which had dropped down to 81.8%, was ticking upwards to 82.5% by the time he left office.
- GDP increased from $14.4 trillion to $18.6 trillion (in 2009 dollars) over the course of his term.
I think the Obama administration and Federal Reserve Chair Janet Yellen can be forgiven for thinking they were generally on the right track, because that does not look to me like a failure.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 1) by khallow on Thursday August 31 2017, @12:15AM (1 child)
Would have happened quicker without his interference. Keep in mind you're bragging about doing this in eight years.
Amazing recovery there in eight years.
In 2009 dollars, GDP increased [thebalance.com] from $14.4 trillion to $16.716, which is a pathetic growth rate, 1.8% per year for the US over eight years, especially from the bottom of a recession (the strongest growth tends to closely follow recessions). In comparison, from 1967 to 2016 the US economy increased by 2.7% over the 50 year period, including Obama's two terms (in other words, excluding Obama's two terms, economic growth was 2.9% per year, including several recessions, more than half again as high).
(Score: 1) by khallow on Thursday August 31 2017, @02:31AM
While I think the conclusion was that the economy was worse than we knew, it strikes me that perhaps the solutions were also worse than we knew.