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Indeed; PhD _anything_ is a signal that you _might_ be the kind of person who can escape groupthink. Or being a successful entrepreneur, lawyer, hermit, anythin

Indeed; PhD _anything_ is a signal that you _might_ be the kind of person who can escape groupthink. Or being a successful entrepreneur, lawyer, hermit, anything really. That line stood out for me too. As a 'trained' historian we were always looking down on the economists for their 'groupthink' tendencies. And on most fellow historians, and pretty much everyone in history. It's a cheap shot, but armies of trained economists failed to spot (or do anything useful about) the credit bubble, the consequences of which we are still failing to deal with.

true_religion 10y ago
The credit bubble was difficult to spot because it (like all bubbles) emerged fairly rapidly, and involved large amounts of lying and corruption. Banks failed to inform anyone that they had essentially broken their Chinese wall between the investing & lending divisions. They also failed to inform anyone that they were bundling good credit and bad credit structures, then rubber stamping the whole thing as AAA credit. Would these issues have been found out eventually? Sure, but: - The US markets are large and filled with sophisticated people who know just how to hide things. Governments/private corps in emerging economies try the same thing, but they're stymied by a lack of no how on how to fudge data - Even in the case of poor fudging, you can't find all of it instantaneously and can't comment prematurely
- zwischenzug 10y ago
  It was obvious to me in about 2002 in the UK when I started to see people being forwarded money I knew they could never pay back, for cars and houses.
  - princeb 10y ago
    you would have spent 6 years believing something was going to happen before anything happened, that's 6 years out of the 8 years in between the two major crashes this millenium.
    - zwischenzug 10y ago
      I didn't say I predicted _when_ it would happen, simply that it was obvious to a casual observer that there was a credit bubble that would inevitably burst when money couldn't be paid back.
      - princeb 10y ago
        well yeah i mean, if you persist in saying things will go up or go down, eventually you'll be right.
- zwischenzug 10y ago
  Anyone with any nous could see what was going on. If economists helping run the economy can't spot it, what use are they?

true_religion 10y ago

The credit bubble was difficult to spot because it (like all bubbles) emerged fairly rapidly, and involved large amounts of lying and corruption. Banks failed to inform anyone that they had essentially broken their Chinese wall between the investing & lending divisions. They also failed to inform anyone that they were bundling good credit and bad credit structures, then rubber stamping the whole thing as AAA credit. Would these issues have been found out eventually? Sure, but: - The US markets are large and filled with sophisticated people who know just how to hide things. Governments/private corps in emerging economies try the same thing, but they're stymied by a lack of no how on how to fudge data - Even in the case of poor fudging, you can't find all of it instantaneously and can't comment prematurely

zwischenzug 10y ago
It was obvious to me in about 2002 in the UK when I started to see people being forwarded money I knew they could never pay back, for cars and houses.
- princeb 10y ago
  you would have spent 6 years believing something was going to happen before anything happened, that's 6 years out of the 8 years in between the two major crashes this millenium.
  - zwischenzug 10y ago
    I didn't say I predicted _when_ it would happen, simply that it was obvious to a casual observer that there was a credit bubble that would inevitably burst when money couldn't be paid back.
    - princeb 10y ago
      well yeah i mean, if you persist in saying things will go up or go down, eventually you'll be right.
zwischenzug 10y ago
Anyone with any nous could see what was going on. If economists helping run the economy can't spot it, what use are they?