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The trouble with "magical thinking" as it is used here is that it is simply a more pejorative way of saying "unjustified belief". Once you substitute the term
by calpaterson 10y ago
The trouble with "magical thinking" as it is used here is that it is simply a more pejorative way of saying "unjustified belief".
Once you substitute the term "magical thinking" for "unjustified belief" the article becomes a lot more banal because really there are a lot of ways to be wrong and there is no particularly meaningful way to group all these ways together. Perhaps the central bankers do have unjustified beliefs about the efficacy of monetary policy. But there isn't a meaningful intellectual link - despite the considerable intellectual drippings of this article - between FOMC meetings and prehistorical tribal religion.
- jonstewart 10y agoQuite. It's very effective at convincing that magical thinking/group think are a huge risk, but it's not at all convincing that the Fed is engaging in magical thinking. Ironically, it merely asserts it is so instead of engaging in the empiricism it clamors for. My first thought when I read: "Oh my god, are we really saying that the entire FOMC decision-making process comes down to whether there’s a good jobs report on Friday? Why don’t we just inspect the entrails of a goat?" was... well, incorporating a jobs report into the decision-making process, what's so wrong with that? I'm not a macro-economist and so perhaps I lack the background to critique this post effectively. But it just seems like more doom and gloom. The great thing about gloom and doom in finance is that eventually someone will be right and say "I told you so", but it's still usually just magical thinking, too.