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This article really demonstrates how meaningless most economics reporting is, it's nearly as bad as markets/finance reporting. Oil is $75, about average over t

This article really demonstrates how meaningless most economics reporting is, it's nearly as bad as markets/finance reporting. Oil is $75, about average over the last decade. It has almost nothing to do with employment, wage growth or GDP except inasmuch as all major economic measures affect eachother. A year ago oil prices were low, did that mean the opposite of this article (whatever that is) was true? This kind of writing leans very heavily on its metrics, euphemisms and cliches. I have a feeling the journalists would not be able to unpack any of its abstractions. "If slack were eliminated everywhere, pay might rise faster." _.._"hawks think there is little room to boost real wages by running labour markets hotter." _.._"structural changes in the economy, rather than weak demand alone, have stacked the deck against workers." ...If asked, would the writer be able to give a specific examples or instances for any of these? Are "labour market running hot" or "central bank tightening" references to actual things that are happening or are these just boilerplate sentences that get added to any article? I really don't see how anyone is more informed of anything, even about the authors' opinions, from reading this.

dalbasal 8y ago
..extra point. This is the most ridiculous part: Continued tightening in labour markets might yet boost workers’ bargaining power enough for that to happen, as was the case during the late 1990s and late 2000s, two unusual periods in which labour’s share of GDP rose across the rich world. Labour’s share of GDP is a fraction. labour/gdp. you can make it bigger by having higher wages or lower gdp. Anyone remember 1999 or 2008? Anything "unusual" about those years?
- harryh 8y ago
  GDP was still increasing in the late 90s in the US. The recession didn't start until March 2001.
  - ethbro 8y ago
    The interesting corollary would be that in the run-up to a recession, all other assets and opportunities are so over-valued that capital has nowhere else to go. And that increasing wages for labor is in fact capital's least-preferred option. Which would be sad, but more or less jive with how the modern global, publicly traded economy works.
    - eli_gottlieb 8y ago
      Well, that sounds pretty accurate: today's economies are so thoroughly dominated by the interests of monopoly capital that it takes a long-running bubble/overheat to actually raise wages.
      - harryh 8y ago
        today's economies are so thoroughly dominated by the interests of monopoly capital How do you measure this?
- chibg10 8y ago
  Ehhh, I think you're fudging the causality here and reading your own incorrect perspective into the article. Recessions hit the lowest rungs of the economic ladder hardest, and those same rungs are last to fully get in on the recovery. Hence, labor's share of GDP tends to be highest at the end of the business cycle... which necessarily coincides with an imminent recession.
  - droidist2 8y ago
    Or is it that when wages rise and inflation kicks in, the Fed raises rates to "cool off" the economy, and then the recession comes?
JumpCrisscross 8y ago
> Are "labour market running hot" or "central bank tightening" references to actual things Yes. Unemployment is very low. That means if you need ten people, you may have to pay more or wait longer than you expected. That is what “labour market running hot” refers to. “Eliminating slack” means encouraging employers to raise wages (which can cause inflation) to fill productive jobs. “Central bank tightening” refers to the Federal Reserve reducing its balance sheet and raising rates. There is a Fed meeting later this year when target rates are expected to be raised, partly in reaction to said labour market. I agree that the financial press could afford to be less jargon heavy.
- dalbasal 8y ago
  I have (more than a little dusty) degree in economics, and I still don't understand what this article is trying to tell me. Is it telling me that when unemployment is low, central bank policy is to raise interest rates? If so, why not say that? What I meant is that generally I don't see how the sentences in this article add up to .. an article. It's a bunch of metrics, chosen by convention, expressed in cliche. It kind of sounds like it's telling us a theory or opinion about something, but it isn't really.
  - JumpCrisscross 8y ago
    > Is it telling me that when unemployment is low, central bank policy is to raise interest rates? If so, why not say that? Raising rates aren’t the only way to solve the problem of (a) people who could be in the labour market but aren’t and (b) insufficient labour in the places it needs to be. Whatever it’s trying to do, it got me thinking about barriers to hiring in New York City. Are there steps we could eliminate or consolidate? Last week’s primary just saw my former bartender and taco server effectively become a Congresswoman for Queens. An article about the central bank and unemployment would not have prompted me to consider discussing this with her.
    - extralego 8y ago
      You probably lost a great bartender and taco server. Honestly, I’m sorry to hear that. But her victory is very refreshing. What do you think? Why not discuss it with her?
ryanstorm 8y ago
The Economist just went through a month-long series on the faults of economists and the field. I'm sure they'd be able to go into more detail, but this seems to be one of their more simplified articles.
- dalbasal 8y ago
  IDK... The economist has a lot of great reporting on diplomacy, politics, threats to "free society.." I can't remember the last time I read a good economist article on economics. When Thomas Pickety won the nobel, and got so much coverage, the economist ran some article structured pretty much like this one. All jargonized, cliched & euphamised language. I'm not upset at the economist's positions, political orientation or such. I'm upset with the "Quantum Healing" style of pseudo-argument that is now dominant in their economic writing. They are using economic terms. They are saying sentences that are true, just not meaningful in the context. Then they flavour this with vaguer, more abstract sentences which sound more meaningful while being less meaningful.
csomar 8y ago
Oil is an example of you can have a volatile commodity despite being very big, traded and needed. This goes out of the understanding of simple reporters and economists who simplify the world to the simple equations they were taught in econ 101.
deleted 8y ago
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abhiminator 8y ago
I absolutely agree with you. This is a perfect example of superficial reporting. Surprised to see this from The Economist.
- adpirz 8y ago
  As a subscriber, I’d say this is very standard for the Economist.
- Emma_Goldman 8y ago
  No, this is entirely typical of The Economist. Everything I ever read there is amateurish and superficial.
- dalbasal 8y ago
  I think it might be worse than superficial. They're trying to trick readers into thinking that it contains more information than it does. Not cricket, Economist.
  - nunb 8y ago
    It's been working fine for decades! Even through enormous bad calls like their early noughties call on oil.
- oligopoly 8y ago
  Happens in every field. Compare what is said to reported or if you have knowledge of something, frankly could be anything sports, business etc, how poorly it's reported in the press.
Joeri 8y ago
This article really demonstrates how meaningless most economics reporting is, it's nearly as bad as markets/finance reporting. The problem is not with the reporting, it’s with the field. Economics is pseudoscience. It has all the trappings but none of the explanatory or predictive abilities. So you get articles like these that use a lot of jargon pretending like they’re making a strong case, but there’s no strong consensus position reached here beyond the bare observables. Economics can’t be a science yet. It is a branch of sociology, modelling the economic behavior of people, and we lack the sociological insight to do that currently.
- JumpCrisscross 8y ago
  > Economics can’t be a science yet Macroeconomics, yes. Microeconomics is a proper science. It has theories which make predictions which can be demonstrated in experiments.
  - neilwilson 8y ago
    Probably worth reading Debunking Economics before being sold on all microeconomic ideas. Particularly anything to do with the theory of the firm.
    - JumpCrisscross 8y ago
      > Particularly anything to do with the theory of the firm Theory of the firm is closer to a hypothesis. I’m not sure how one would experimentally verity its claims.
  - dalbasal 8y ago
    I don't think that makes it a science. When Karl Popper criticised economics (and freudianism) for being a pseudo-science, there wasn't a real macro-micro divide. Adam Smith, Ricardo and the like were essentially micro-economists. You can experiment in some very small (raise the price of a product on a shelf) ways. The bulk of economics is about how these small components interact as a large dynamic. When it comes to predictions like "increasing minimum wage will lead to increased unemployment," it's never been adequately demonstrated experimentally.
j-c-hewitt 8y ago
Someone's gotta explain to me what "structural changes in the economy" means. Does it mean that the economy is like a big building and we added another floor? Is the economy now like one of those whacky nu-architecture prizewinning buildings that are shaped like giant globs of play-do? Or is it one of those phrases that can be used to mean absolutely anything at all?
- dalbasal 8y ago
  That's exactly the point, it could mean anything. In this case, I think "structural" is a euphemism for "equilibrium state," what would happen in the economy if everything stays as it is now long enough for things to settle down. It's nonspecific even for a euphemism. "Structure" could mean "the type of products now made in the economy." It could mean "the fact that labour markets are internationalised," as the article stops short of alluding to a paragraph earlier. It could mean "the fact that we the economy is made of fewer, larger companies."
- Aeolos 8y ago
  > Or is it one of those phrases that can be used to mean absolutely anything at all? The meaning depends a bit on the political orientation of whoever is uttering the phrase. In the neoliberal nomenclature presently used throughout Europe, "structural changes" are an euphemism for cuts to public spending (healthcare, social security, pensions, services), reduction of worker rights and wage depression. For example, France is currently undergoing "structural changes". Ireland, Spain, Greece underwent "structural changes" as a response to the global economic crisis of 2008.
- superbaconman 8y ago
  Probably changes to finance law. https://en.m.wikipedia.org/wiki/Financial_law https://en.m.wikipedia.org/wiki/Financial_law
baursak 8y ago
Relevant: https://www.theatlantic.com/technology/archive/1991/10/-quot-the-economics-of-the-colonial-cringe-quot-about-the-economist-magazine-washington-post-1991/7415/ https://www.theatlantic.com/technology/archive/1991/10/-quot... "The magazine is written by young people pretending to be old people... If American readers got a look at the pimply complexions of their economic gurus, they would cancel their subscriptions in droves."
- dalbasal 8y ago
  heh. He doesn't like the economist at all. I don't agree in general, the economist is often good. This article (and economics generally)... I have to agree. Heavy on Oxbridge feel, light on actual ideas. Most of what these kind of articles convey is a feel, justified by technical sounding babble that a friendly reader will assume is adequate. Ironically, the iconic example of this kind of carry on is marxism. 93.6% of all communist/marxist writing was a sharp tongued criticism. Moral critiques of capitalism. Critical reporting on the state of the urban working class in Europe. But, Marx (and his Bougie Oxbridge readers) needed more than that though. They needed to refute "Bourgeoisie Economists" and "Liberal Political Scientists." That's why Das Capital was so important. No one read it, but owning a copy added intellectual weight to one's marxism.
- tcbawo 8y ago
  If American readers knew the track record of most economic gurus, they would cancel their subscriptions and demand a refund.
- mifreewil 8y ago
  This article is nearly 30 years old.
  - pembrook 8y ago
    But perhaps even more true today, as the profession of journalism has become even younger and lower paid than it was before. Without the steady subscription revenue of the past, you can't afford to hire big name writers with decades of experience anymore.
niccolop 8y ago
This is why I stopped reading The Economist years ago. The lack of byline in my opinion allows that type of sloppy writing.
- tormeh 8y ago
  What do you read instead?
saas_co_de 8y ago
Economist is not economics reporting. It is political advocacy.
naravara 8y ago
This is pretty routine with the Economist. The anonymous bylines obscure the fact that most of their writers are fresh out of college economic majors with little to no real-world experience. When all you have is undergraduate level economics models and no experience to anchor it to how business actually works or decisions actually gets made, then you’re going to have vague, overgeneralized gobbledygook for analysis.
deleted 8y ago
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jwatte 8y ago
Reducing Union power probably counts as "stacking against workers," as does a minimum wage that is not enough to actually live on. But there are much deeper injustices. The zip code you're born in predicts future success better than any other attribute, including IQ! If your parents can take you in when your business attempt falls, you're in a different world than of your parents are a single mother of three, through no fault of your own. Aristocracy is hereditary, always has been, seems to remain that way. This, is what "stacked" really means. Whether you think this is actually bad for America or not is a different question.
dajohnson89 8y ago
you succinctly described what bothers me about reading the economist.
Camillo 8y ago
I have tried to compile a list of the mysterious expressions used in the article: - "labour markets have tightened" - "unemployment rate" - "unemployment was much higher" - "fall in union membership" - "rising offshoring" - "outsourcing" - "workers’ bargaining power" - "tightening in labour markets might yet boost workers’ bargaining power" "as was the case during the late 1990s and late 2000s" - "number of part-time workers who want full-time jobs" - "unemployment rates that are far higher" - "pockets of slack might constrain wages everywhere" - "firms that are struggling to find workers" - "If slack were eliminated everywhere, pay might rise faster" - "boost real wages by running labour markets hotter" Now, I'm no economist, but the picture I'm getting is that they are describing labor relations as a "market", where prices (wages) are affected by demand (companies seeking employees) and supply (workers seeking jobs). So the idea would be that when the supply of potential workers increases (because unemployment is high, or because new sources of labor are available, e.g. by outsourcing and offshoring) that tends to drive wages down, and when the supply decreases it tends to drive wages up. The fly in the ointment of my interpretation is that there is at least one other obvious source of increased labor supply in rich countries, yet the Economist does not mention it anywhere. So I must be misunderstanding it, after all.
digaozao 8y ago
I am reading "skin in the game" from Nassim Taleb. He makes a lot of points against journalits or economists. And it seems right many times. They do not have real contact with the things they talk about.

dalbasal 8y ago

..extra point. This is the most ridiculous part: Continued tightening in labour markets might yet boost workers’ bargaining power enough for that to happen, as was the case during the late 1990s and late 2000s, two unusual periods in which labour’s share of GDP rose across the rich world. Labour’s share of GDP is a fraction. labour/gdp. you can make it bigger by having higher wages or lower gdp. Anyone remember 1999 or 2008? Anything "unusual" about those years?

harryh 8y ago
GDP was still increasing in the late 90s in the US. The recession didn't start until March 2001.
- ethbro 8y ago
  The interesting corollary would be that in the run-up to a recession, all other assets and opportunities are so over-valued that capital has nowhere else to go. And that increasing wages for labor is in fact capital's least-preferred option. Which would be sad, but more or less jive with how the modern global, publicly traded economy works.
  - eli_gottlieb 8y ago
    Well, that sounds pretty accurate: today's economies are so thoroughly dominated by the interests of monopoly capital that it takes a long-running bubble/overheat to actually raise wages.
    - harryh 8y ago
      today's economies are so thoroughly dominated by the interests of monopoly capital How do you measure this?
chibg10 8y ago
Ehhh, I think you're fudging the causality here and reading your own incorrect perspective into the article. Recessions hit the lowest rungs of the economic ladder hardest, and those same rungs are last to fully get in on the recovery. Hence, labor's share of GDP tends to be highest at the end of the business cycle... which necessarily coincides with an imminent recession.
- droidist2 8y ago
  Or is it that when wages rise and inflation kicks in, the Fed raises rates to "cool off" the economy, and then the recession comes?

JumpCrisscross 8y ago

> Are "labour market running hot" or "central bank tightening" references to actual things Yes. Unemployment is very low. That means if you need ten people, you may have to pay more or wait longer than you expected. That is what “labour market running hot” refers to. “Eliminating slack” means encouraging employers to raise wages (which can cause inflation) to fill productive jobs. “Central bank tightening” refers to the Federal Reserve reducing its balance sheet and raising rates. There is a Fed meeting later this year when target rates are expected to be raised, partly in reaction to said labour market. I agree that the financial press could afford to be less jargon heavy.

dalbasal 8y ago
I have (more than a little dusty) degree in economics, and I still don't understand what this article is trying to tell me. Is it telling me that when unemployment is low, central bank policy is to raise interest rates? If so, why not say that? What I meant is that generally I don't see how the sentences in this article add up to .. an article. It's a bunch of metrics, chosen by convention, expressed in cliche. It kind of sounds like it's telling us a theory or opinion about something, but it isn't really.
- JumpCrisscross 8y ago
  > Is it telling me that when unemployment is low, central bank policy is to raise interest rates? If so, why not say that? Raising rates aren’t the only way to solve the problem of (a) people who could be in the labour market but aren’t and (b) insufficient labour in the places it needs to be. Whatever it’s trying to do, it got me thinking about barriers to hiring in New York City. Are there steps we could eliminate or consolidate? Last week’s primary just saw my former bartender and taco server effectively become a Congresswoman for Queens. An article about the central bank and unemployment would not have prompted me to consider discussing this with her.
  - extralego 8y ago
    You probably lost a great bartender and taco server. Honestly, I’m sorry to hear that. But her victory is very refreshing. What do you think? Why not discuss it with her?

ryanstorm 8y ago

The Economist just went through a month-long series on the faults of economists and the field. I'm sure they'd be able to go into more detail, but this seems to be one of their more simplified articles.

dalbasal 8y ago
IDK... The economist has a lot of great reporting on diplomacy, politics, threats to "free society.." I can't remember the last time I read a good economist article on economics. When Thomas Pickety won the nobel, and got so much coverage, the economist ran some article structured pretty much like this one. All jargonized, cliched & euphamised language. I'm not upset at the economist's positions, political orientation or such. I'm upset with the "Quantum Healing" style of pseudo-argument that is now dominant in their economic writing. They are using economic terms. They are saying sentences that are true, just not meaningful in the context. Then they flavour this with vaguer, more abstract sentences which sound more meaningful while being less meaningful.

csomar 8y ago

Oil is an example of you can have a volatile commodity despite being very big, traded and needed. This goes out of the understanding of simple reporters and economists who simplify the world to the simple equations they were taught in econ 101.

deleted 8y ago

[deleted]

abhiminator 8y ago

I absolutely agree with you. This is a perfect example of superficial reporting. Surprised to see this from The Economist.

adpirz 8y ago
As a subscriber, I’d say this is very standard for the Economist.
Emma_Goldman 8y ago
No, this is entirely typical of The Economist. Everything I ever read there is amateurish and superficial.
dalbasal 8y ago
I think it might be worse than superficial. They're trying to trick readers into thinking that it contains more information than it does. Not cricket, Economist.
- nunb 8y ago
  It's been working fine for decades! Even through enormous bad calls like their early noughties call on oil.
oligopoly 8y ago
Happens in every field. Compare what is said to reported or if you have knowledge of something, frankly could be anything sports, business etc, how poorly it's reported in the press.

Joeri 8y ago

This article really demonstrates how meaningless most economics reporting is, it's nearly as bad as markets/finance reporting. The problem is not with the reporting, it’s with the field. Economics is pseudoscience. It has all the trappings but none of the explanatory or predictive abilities. So you get articles like these that use a lot of jargon pretending like they’re making a strong case, but there’s no strong consensus position reached here beyond the bare observables. Economics can’t be a science yet. It is a branch of sociology, modelling the economic behavior of people, and we lack the sociological insight to do that currently.

JumpCrisscross 8y ago
> Economics can’t be a science yet Macroeconomics, yes. Microeconomics is a proper science. It has theories which make predictions which can be demonstrated in experiments.
- neilwilson 8y ago
  Probably worth reading Debunking Economics before being sold on all microeconomic ideas. Particularly anything to do with the theory of the firm.
  - JumpCrisscross 8y ago
    > Particularly anything to do with the theory of the firm Theory of the firm is closer to a hypothesis. I’m not sure how one would experimentally verity its claims.
- dalbasal 8y ago
  I don't think that makes it a science. When Karl Popper criticised economics (and freudianism) for being a pseudo-science, there wasn't a real macro-micro divide. Adam Smith, Ricardo and the like were essentially micro-economists. You can experiment in some very small (raise the price of a product on a shelf) ways. The bulk of economics is about how these small components interact as a large dynamic. When it comes to predictions like "increasing minimum wage will lead to increased unemployment," it's never been adequately demonstrated experimentally.

j-c-hewitt 8y ago

Someone's gotta explain to me what "structural changes in the economy" means. Does it mean that the economy is like a big building and we added another floor? Is the economy now like one of those whacky nu-architecture prizewinning buildings that are shaped like giant globs of play-do? Or is it one of those phrases that can be used to mean absolutely anything at all?

dalbasal 8y ago
That's exactly the point, it could mean anything. In this case, I think "structural" is a euphemism for "equilibrium state," what would happen in the economy if everything stays as it is now long enough for things to settle down. It's nonspecific even for a euphemism. "Structure" could mean "the type of products now made in the economy." It could mean "the fact that labour markets are internationalised," as the article stops short of alluding to a paragraph earlier. It could mean "the fact that we the economy is made of fewer, larger companies."
Aeolos 8y ago
> Or is it one of those phrases that can be used to mean absolutely anything at all? The meaning depends a bit on the political orientation of whoever is uttering the phrase. In the neoliberal nomenclature presently used throughout Europe, "structural changes" are an euphemism for cuts to public spending (healthcare, social security, pensions, services), reduction of worker rights and wage depression. For example, France is currently undergoing "structural changes". Ireland, Spain, Greece underwent "structural changes" as a response to the global economic crisis of 2008.
superbaconman 8y ago
Probably changes to finance law. https://en.m.wikipedia.org/wiki/Financial_law https://en.m.wikipedia.org/wiki/Financial_law

baursak 8y ago

Relevant: https://www.theatlantic.com/technology/archive/1991/10/-quot-the-economics-of-the-colonial-cringe-quot-about-the-economist-magazine-washington-post-1991/7415/ https://www.theatlantic.com/technology/archive/1991/10/-quot... "The magazine is written by young people pretending to be old people... If American readers got a look at the pimply complexions of their economic gurus, they would cancel their subscriptions in droves."

dalbasal 8y ago
heh. He doesn't like the economist at all. I don't agree in general, the economist is often good. This article (and economics generally)... I have to agree. Heavy on Oxbridge feel, light on actual ideas. Most of what these kind of articles convey is a feel, justified by technical sounding babble that a friendly reader will assume is adequate. Ironically, the iconic example of this kind of carry on is marxism. 93.6% of all communist/marxist writing was a sharp tongued criticism. Moral critiques of capitalism. Critical reporting on the state of the urban working class in Europe. But, Marx (and his Bougie Oxbridge readers) needed more than that though. They needed to refute "Bourgeoisie Economists" and "Liberal Political Scientists." That's why Das Capital was so important. No one read it, but owning a copy added intellectual weight to one's marxism.
tcbawo 8y ago
If American readers knew the track record of most economic gurus, they would cancel their subscriptions and demand a refund.
mifreewil 8y ago
This article is nearly 30 years old.
- pembrook 8y ago
  But perhaps even more true today, as the profession of journalism has become even younger and lower paid than it was before. Without the steady subscription revenue of the past, you can't afford to hire big name writers with decades of experience anymore.

niccolop 8y ago

This is why I stopped reading The Economist years ago. The lack of byline in my opinion allows that type of sloppy writing.

tormeh 8y ago
What do you read instead?

saas_co_de 8y ago

Economist is not economics reporting. It is political advocacy.

naravara 8y ago

This is pretty routine with the Economist. The anonymous bylines obscure the fact that most of their writers are fresh out of college economic majors with little to no real-world experience. When all you have is undergraduate level economics models and no experience to anchor it to how business actually works or decisions actually gets made, then you’re going to have vague, overgeneralized gobbledygook for analysis.

deleted 8y ago

[deleted]

jwatte 8y ago

Reducing Union power probably counts as "stacking against workers," as does a minimum wage that is not enough to actually live on. But there are much deeper injustices. The zip code you're born in predicts future success better than any other attribute, including IQ! If your parents can take you in when your business attempt falls, you're in a different world than of your parents are a single mother of three, through no fault of your own. Aristocracy is hereditary, always has been, seems to remain that way. This, is what "stacked" really means. Whether you think this is actually bad for America or not is a different question.

dajohnson89 8y ago

you succinctly described what bothers me about reading the economist.

Camillo 8y ago

I have tried to compile a list of the mysterious expressions used in the article: - "labour markets have tightened" - "unemployment rate" - "unemployment was much higher" - "fall in union membership" - "rising offshoring" - "outsourcing" - "workers’ bargaining power" - "tightening in labour markets might yet boost workers’ bargaining power" "as was the case during the late 1990s and late 2000s" - "number of part-time workers who want full-time jobs" - "unemployment rates that are far higher" - "pockets of slack might constrain wages everywhere" - "firms that are struggling to find workers" - "If slack were eliminated everywhere, pay might rise faster" - "boost real wages by running labour markets hotter" Now, I'm no economist, but the picture I'm getting is that they are describing labor relations as a "market", where prices (wages) are affected by demand (companies seeking employees) and supply (workers seeking jobs). So the idea would be that when the supply of potential workers increases (because unemployment is high, or because new sources of labor are available, e.g. by outsourcing and offshoring) that tends to drive wages down, and when the supply decreases it tends to drive wages up. The fly in the ointment of my interpretation is that there is at least one other obvious source of increased labor supply in rich countries, yet the Economist does not mention it anywhere. So I must be misunderstanding it, after all.

digaozao 8y ago

I am reading "skin in the game" from Nassim Taleb. He makes a lot of points against journalits or economists. And it seems right many times. They do not have real contact with the things they talk about.