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That's the whole basis of social science. As much as HN shits on social science for being unverifiable, the entire point of the domain is that some things (name

by Tyrek 9y ago

That's the whole basis of social science. As much as HN shits on social science for being unverifiable, the entire point of the domain is that some things (namely, economic understanding) are not verifiable through observation and comparison. The only way to really understand potential impacts are through economic concepts and modelling. Sure, there is plenty of bias thrown in, but there's also a million different economic models to choose from. There's a lot of noise, and it actually takes specialized knowledge and domain expertise to wade through all of it. I don't get why there's the misapprehension that economics is inherently intuitive.

jessaustin 9y ago
The social science you're describing is not the same as that I learned at university. Maybe it doesn't often admit experimentation, but it sure as hell uses observation and comparison. In fact you're sort of insulting economists here, implying that they practice a sort of solipsistic philosophy. Lots of them really deserve it, but still! The secret unacknowledged religious dogma you might not even know you've swallowed (although golly are Goldman glad you did!) is the proposition that banks are difficult to replace. This notion is preposterous on its face (which is why no one ever says it out loud) because of course anyone who owns capital is quite capable of purchasing financial instruments with that capital. If they weren't, they wouldn't own it in the first place. In the absence of "bailouts", there might have been some temporary confusion as legitimate profitable uses of capital switched from the old banks to the new (and presumably as the new bankers upgraded their executive suites to the level of opulence required in their new positions), but the history of recessions in 19thC USA makes clear that when we just let weak banks fail, the economy quickly recovers.
- Tyrek 9y ago
  Sure - you use observation and comparison to validate against your existing models, not directly against other countries. To apply the model to other countries, you have to tweak your model for additional factors that vary between the countries. It's preposterous to assume that you can straight up draw a conclusion from Iceland and apply it to, say, China. 19th C banks are wholly different creatures to what we have today - we weren't even on fiat currency in the 19th Century, much less using banks as extension of monetary policy. The entire point of defending banks is that there is an immense amount of built up regulations that would not transfer over to the 'new banking system'. And while it's debatably whether or not existing regulations are good, the current regulatory environment makes it unlikely that any sort of similar consumer protection would be re-built in this day and age - just look at the modern ICO, which is wholly built on smoke and mirrors.
  - jessaustin 9y ago
    I didn't mention a "new banking system". I suggested rather that anyone with the money to do so could provide short- and medium-term liquidity to firms that require it. Apple, for example, would be just as capable of buying bonds as Goldman Sachs is, and for the right yield they would.

by Tyrek 9y ago

jessaustin 9y ago

The social science you're describing is not the same as that I learned at university. Maybe it doesn't often admit experimentation, but it sure as hell uses observation and comparison. In fact you're sort of insulting economists here, implying that they practice a sort of solipsistic philosophy. Lots of them really deserve it, but still! The secret unacknowledged religious dogma you might not even know you've swallowed (although golly are Goldman glad you did!) is the proposition that banks are difficult to replace. This notion is preposterous on its face (which is why no one ever says it out loud) because of course anyone who owns capital is quite capable of purchasing financial instruments with that capital. If they weren't, they wouldn't own it in the first place. In the absence of "bailouts", there might have been some temporary confusion as legitimate profitable uses of capital switched from the old banks to the new (and presumably as the new bankers upgraded their executive suites to the level of opulence required in their new positions), but the history of recessions in 19thC USA makes clear that when we just let weak banks fail, the economy quickly recovers.

Tyrek 9y ago
Sure - you use observation and comparison to validate against your existing models, not directly against other countries. To apply the model to other countries, you have to tweak your model for additional factors that vary between the countries. It's preposterous to assume that you can straight up draw a conclusion from Iceland and apply it to, say, China. 19th C banks are wholly different creatures to what we have today - we weren't even on fiat currency in the 19th Century, much less using banks as extension of monetary policy. The entire point of defending banks is that there is an immense amount of built up regulations that would not transfer over to the 'new banking system'. And while it's debatably whether or not existing regulations are good, the current regulatory environment makes it unlikely that any sort of similar consumer protection would be re-built in this day and age - just look at the modern ICO, which is wholly built on smoke and mirrors.
- jessaustin 9y ago
  I didn't mention a "new banking system". I suggested rather that anyone with the money to do so could provide short- and medium-term liquidity to firms that require it. Apple, for example, would be just as capable of buying bonds as Goldman Sachs is, and for the right yield they would.