9 ms·

It's saddening the number of national economies that have been destroyed by politicians who don't understand economic fundamentals. When it comes to most matter

• crdoconnor 10y ago
  >we persist in thinking that it should be implemented by career politicians and popular opinion. This is what economists do when they think we're not paying attention: http://z822j1x8tde3wuovlgo7ue15.wpengine.netdna-cdn.com/wp-content/uploads/2012/11/greece.png http://z822j1x8tde3wuovlgo7ue15.wpengine.netdna-cdn.com/wp-c... That's not "oops". That's not giving two shits about being right because being right doesn't pay the bills. Being wrong does. If you want to see economic destruction on a wide scale, don't listen to the anti-austerity protests. Don't listen to "populist" politicians. Listen to the 'respectable' economists who have an eye on a well paid job at a corporate think tank like CATO. They truly have nothing but objectivity and your best interests at heart.
  • at-fates-hands 10y ago
    >> Listen to the 'respectable' economists Isn't that kind of a subjective opinion? Liberals love to push Keynes economic theories and hold him up as some kind of expert. Likewise, Conservatives love to push Friedman's theories on the economy since it fits with their staunch free market ideas. Even in these circles it would be hard to find someone who's actually objective about what they're seeing.
    • crdoconnor 10y ago
      >Isn't that kind of a subjective opinion? I wasn't using it as such. If an economist gets the ear of a president, is employed by the ECB (as the above economists were) or a column in the New York Times they're 'respectable'. >Liberals love to push Keynes economic theories and hold him up as some kind of expert. Conservatives use his theories too. Republican politicians who fight tooth and nail for military spending in their districts know exactly what they're doing and why. >Even in these circles it would be hard to find someone who's actually objective about what they're seeing. A good litmus test of this is to look at their predictions and see how they stack up to reality. Some predictions are just bad, some are so persistently awful that they indicate that the economist has incentives that lead them to tell flat out lies. The above graph is a good example of that.
      • MaysonL 10y ago
        Another, even better, litmus test is whether they ever change their mind when they've been wrong.
    • cloakandswagger 10y ago
      It is completely subjective, but it's also obvious that the Keynesians won that battle a long time ago. Go into any classroom, economics conference, FOMC meeting, etc. Keynesian theories enjoy the status of being unassailable, objective facts. Austrian and other schools of thought are mocked, derided and dismissed wholesale.
      • digi_owl 10y ago
        If you have actually checked out Steve Keen's presentations and/or writing you would have learned that what is being presented as "Keynesian economics" is more correctly "Samuelsonian economics". This after Paul Samuelson that sat down and basically rewrote everything Keynes to fit it into the very economic models that Keynes was attacking.
      • ci5er 10y ago
        I don't much follow salt-water economics, but is that true? That Keynesians think they are actually right?
        • nsp 10y ago
          Yes. - Keynesian economics major
    • jomamaxx 10y ago
      Liberals don't push 'Keynes' - they push 'big spending all the time as a means to redistribute wealth' - and use the cover of 'Keynes' as credibility. 'Keynes' advocated for gov. spending in downturns and saving in upturns. The problem is: A) Progressives want to spend, infinitely. There is no 'saving period'. Ergo - it's nothing to do with Keynes really. B) It's really hard to tell what a 'downturn' is. 'Restoring confidence in markets' and picking up some infrastructure spending when industry is in a lull - this is on paper - a great idea. BUT - when a market has undergone a 'secular shift' - meaning that the lost jobs are not due to cyclical issues, but are permanent ... then the government ends up throwing good money after bad. Put another way: Keynes urged spending in down cycles to level out volatility and stabilize employment. But any given downturn may not be a 'cycle' - with an impending uptick. A 'downturn' may be permanent - like 'lost jobs to China' etc.. The 'solution' to a downturn has to be commensurate with the causes: cyclical shift? Ok, some infrastructure / gov investment might help. Millions of jobs lost to China? Gov. spending will only delay the inevitable. Better to invest in 'retooling' the workforce etc.. But this is not an 'economic' solution - it's a business/strategy solution and it takes intelligence.
  • chongli 10y ago
    Eh, I wouldn't put economists in the same category as generals or engineers. They are more like clergy or court astrologers. Their job is to make the numbers work for the politicians, who in turn work for the bankers.
    • crdoconnor 10y ago
      Yes, the clergy/court astrologer comparison is very apt. A few are more like engineers (e.g. see Steve Keen's work) but they're not the ones who get the plum jobs in government, powerful NGOs or banks - they tend to be professors in backwater universities.
  • dv_dt 10y ago
    How many of those 'respectable' economists predicted the 2008 crash? I'm skeptical of the entire ability of the profession to make any large scale policy decisions.
    • lkbm 10y ago
      Why is predicting a particular economic event the qualification? Sure, predicting the future is nice, but what I want to know is whether it would have happened under the policies favoured by economists, whether the effects would have been as severe, whether long-term economic growth and stability would be better or worse, whether human welfare would be improved, whether technological advancement would be greater, whether we'd be happier, healthier, safer... The 2008 crash sucked for a lot of people, but if your economic goal is simply to foresee it or forestall it, you're asking for far too little. It seems a bit like asking why so-called public health experts weren't able to prevent those two cases of Ebola in 2014, while ignoring the 50 000 annual flu+pneumonia deaths and the 600k heart disease deaths--as well as the fact that they stopped ebola infections at two.
      • dv_dt 10y ago
        Because the ability to predict outcomes is a key validator of any scientific field. If civil engineers couldn't predict if a bridge will hold up or fall then we couldn't and shouldn't rely on huge portions of our transpiration network. Similarly with economists, if the field can't forecast the instability of a major sector of our economy then we shouldn't put a tremendous amount of trust on their field for policy. And 2008 wasn't just any economic event, it was a major event which nearly took down the world economy because the financial sector hyperextended and intertwined risks. The economic field had no widely accepted or reliable metric to predict that crash. Public health experts have a very good model for spreads of diseases, models which have been validated many times against real world data, and then therefore can be relied upon to direct resources to help prevent dangerous spreads of disease. Not so with the economic field...
    • rtpg 10y ago
      Though I don't know many predictions on 2008, many economists did correctly predict how badly the Eurozone would end up due to the single currency but different fiscally policies. Germany (basically the strongest eurozone country) has only grown something like 0.7% annually over the past 8 years
• GFK_of_xmaspast 10y ago
  In my country (the United States) the military is under civilian control.
  • protomikron 10y ago
    Hello, non-US fellow here. Can someone point out to me, why this is not the case - I assume that is the reason this got slightly downvoted - or do people just have different opinions about the meaning of "control"?
    • chiph 10y ago
      You may have heard of the Golden Rule, which usually means "Do unto others as you would have them do unto you." But there's a slightly different version which runs: "He who has the gold makes the rules". This is the case in funding the US Department of Defense. The overall budget is set by the Congress (and subdivided innumerable times afterwards by the DoD agencies and departments), so saying that civilians control the military in the US is both true in the operational sense (the military is part of the Executive Branch, and thus under the President, a civilian), but also in a financial sense. More info about the US budget process (which bears a strong resemblance to making sausage..) can be found here: http://budget.house.gov/budgetprocess/ http://budget.house.gov/budgetprocess/
    • Bahamut 10y ago
      The military is under civilian control in the sense that oversight is held by civilians giving some guidance/orders to the Joint Chiefs of Staff via the various branch Secretaries and the Secretary of Defense, and is head at the top by the President, but otherwise the military answers to an internal chain of command, where the Secretaries and the President are the only civilians at the top. The word control may not be the best descriptor of this relationship.
      • nicobn 10y ago
        I don't mean to nitpick but your explanation is missing a critical detail. The chain of command for operational purposes (military operations) completely bypasses the Joints Chiefs of Staff and goes directly to the Unified Combatant Commands. By design, there is no military leader that has operational control over more than a fraction of US forces at a time, which further improves civilian control over the military. The JCS have a very important role but their control is mostly administrative (doctrine, assignments, equipment, promotions, etc.).
• cloakandswagger 10y ago
  What more do you want then? Nearly every country in the world has adopted the US's system of central banking: an unelected, privately owned central bank that creates money through bond purchases or some other mechanism. In the US this entity is so revered that their policies are rarely even a point of discussion in our extremely partisan politics. Hell, just suggesting that they permit an audit is considered controversial. As far as I can tell, politicians exert basically zero influence over actual monetary policy. As long as they have a constant supply of new fiat to fund entitlements and other niceties for their constituents they don't rock the boat.
  • nhaehnle 10y ago
    In most countries, the central bank is not privately owned at all. Even the Fed is only partially privately owned, and that's mostly a historical artefact. Regulatory capture by private banks still tends to be a problem, though.
  • smallnamespace 10y ago
    > What more do you want then? I'd like the Federal Reserve to control overall fiscal policy as well. The Fed tells Congress exactly how much it can spend each year, and Congress divvies it up however it likes.
    • Ressuder 10y ago
      Why are you so keen on handing over the decision of austerity measures or not while in a recession, for example, to unelected politicians?
      • smallnamespace 10y ago
        Because I think our unelected politicians would do a better job than our elected ones. For one thing, it avoids partisan gridlock. Need I mention how many times Republicans threatened to not raise the debt ceiling and cause default? And there's a technical reason as well: if the Fed credibly commits to using fiscal policy in a predictable, countercyclical way, then the mere presence of this policy ought to dampen recessions. On the other hand, whether Congress actually passes stimulus spending or not is highly unpredictable and so the markets cannot rely on it.
• RobertoG 10y ago
  "And yet, when it comes to economic policy, we persist in thinking that it should be implemented by career politicians and popular opinion" Do you mean as opposed to policies implemented by unelected people with their own agenda? Money it's fundamentally a political creation. You can't get rid of politics because however control money control the country. And we all know where that 'people don't know what they need' attitude finish.