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Scott Sumner (an economist) responded, I thought his take was spot on https://www.themoneyillusion.com/the-animal-spirits-fudge-factor/ https://www.themoneyill

Scott Sumner (an economist) responded, I thought his take was spot on https://www.themoneyillusion.com/the-animal-spirits-fudge-factor/ https://www.themoneyillusion.com/the-animal-spirits-fudge-fa... Two quotes > “Macrophysics” (predicting complex physical systems such as hurricanes and earthquakes) does just as poor a job of prediction as macroeconomics. > The real problem is modeling the policymakers. We don’t know exactly how the 12 members of the FOMC will behave.

cy6erlion 7y ago
Just like chess. One can study openings, end-games as deep as possible, try to grasp the dynamics of positions but there is always the human element and that's very hard to study.
AlexTWithBeard 7y ago
We don’t know exactly how the 12 members of the FOMC will behave. Oh, if only dim policymakers behaved as economists tell them to! Wouldn't the world be a wonderful place then?
- kthejoker2 7y ago
  Sumner agrees with your sarcasm, so not sure who you're arguing with ... What he's pointing out is there's a human-driven force to economics so it's not accurate to compare it to a (theoretically) closed system like physics.
mikojan 7y ago
> “Macrophysics” (predicting complex physical systems such as hurricanes and earthquakes) does just as poor a job of prediction as macroeconomics. Which is why people do not trust the weather men and neither should they trust economists. > The real problem is modeling the policymakers. We don’t know exactly how the 12 members of the FOMC will behave. This sounds hard. What about 327 million consumers? The real problem is a discipline in the social sciences which mistakes itself for hard science. It is serving today the same purpose "scientific socialism" once served in the Soviet Union: Taking power away from the people and placing it into the hands of an enlightended elite. What's called "depoliticisation" today. In which you remove spheres of public interest from the democratic decision-making process and cede them to unaccountable power. The exact thing we just haven't had enough of just yet according to this guy. Listening to informed opinions is important but economists enjoy a kind of widespread unquestioned respect that has no basis in reality at all.
- bryanlarsen 7y ago
  > Which is why people do not trust the weather men and neither should they trust economists. People who's livelihood depend on the weather (farmers) do trust weathermen. They just know the limitations. 1: any forecast more than three days out cannot be counted on. (If you're close to mountains or other similarly confounding factor, that 3 day number is a lot smaller) 2: An 80% forecast of rain doesn't mean that it will rain in one specific place, but that it will rain in a good portion of the forecast area. The same thing applies to economists. Some of their predictions are very accurate, but much are wishes and guesses. But due to human nature we primarily remember the times their guesses were wrong.
- pessimizer 7y ago
  > This sounds hard. What about 327 million consumers? Predicting what a lot of people will do is a lot easier than predicting what one person will do (which was the point of what you were quoting.)

cy6erlion 7y ago

Just like chess. One can study openings, end-games as deep as possible, try to grasp the dynamics of positions but there is always the human element and that's very hard to study.

AlexTWithBeard 7y ago

We don’t know exactly how the 12 members of the FOMC will behave. Oh, if only dim policymakers behaved as economists tell them to! Wouldn't the world be a wonderful place then?

kthejoker2 7y ago
Sumner agrees with your sarcasm, so not sure who you're arguing with ... What he's pointing out is there's a human-driven force to economics so it's not accurate to compare it to a (theoretically) closed system like physics.

mikojan 7y ago

> “Macrophysics” (predicting complex physical systems such as hurricanes and earthquakes) does just as poor a job of prediction as macroeconomics. Which is why people do not trust the weather men and neither should they trust economists. > The real problem is modeling the policymakers. We don’t know exactly how the 12 members of the FOMC will behave. This sounds hard. What about 327 million consumers? The real problem is a discipline in the social sciences which mistakes itself for hard science. It is serving today the same purpose "scientific socialism" once served in the Soviet Union: Taking power away from the people and placing it into the hands of an enlightended elite. What's called "depoliticisation" today. In which you remove spheres of public interest from the democratic decision-making process and cede them to unaccountable power. The exact thing we just haven't had enough of just yet according to this guy. Listening to informed opinions is important but economists enjoy a kind of widespread unquestioned respect that has no basis in reality at all.

bryanlarsen 7y ago
> Which is why people do not trust the weather men and neither should they trust economists. People who's livelihood depend on the weather (farmers) do trust weathermen. They just know the limitations. 1: any forecast more than three days out cannot be counted on. (If you're close to mountains or other similarly confounding factor, that 3 day number is a lot smaller) 2: An 80% forecast of rain doesn't mean that it will rain in one specific place, but that it will rain in a good portion of the forecast area. The same thing applies to economists. Some of their predictions are very accurate, but much are wishes and guesses. But due to human nature we primarily remember the times their guesses were wrong.
pessimizer 7y ago
> This sounds hard. What about 327 million consumers? Predicting what a lot of people will do is a lot easier than predicting what one person will do (which was the point of what you were quoting.)