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It seems that a lot of economics as it’s used for political decisions is way oversimplified to the point of being useless or just plain wrong. The minimum wage

It seems that a lot of economics as it’s used for political decisions is way oversimplified to the point of being useless or just plain wrong. The minimum wage issue is an example where reality is much more subtle and complex than what a lot of economists in the news say. Same for tax cuts for upper incomes that were supposed to spur investments in new technologies but seem to have done more to drive up asset prices. Or the argument that lower health care prices will drive up utilization. I am sure there are a lot of economists that do great work but economics as it’s used in public discourse is just abysmal.

davidw 7y ago
Most real economists go much further than the sound bite types of stuff. I mean, the article itself says: "A number of peer-reviewed academic studies have found little to no impact on hiring as states and municipalities have raised the minimum wage." Those are economists doing that research.
nine_zeros 7y ago
I think typical economists like to think of the world as a perfectly rational system. They look at the world from the lens of some bullshit econ 101 nonsense. Extraordinary economists figure out that reality is super complicated, often uncontrollable at all. All you can do is experiments. A real example of this is the Bernanke asset inflation. All he could think about is assets and recovery of banking system. He thought like a middle aged man who just has a few more years to live. It never once occurred to him that his policies could eat up childrens future. Even if it did occur, future monetary policies never went back to "normal" or equitable. As a result, the vast disparity today is just asset holders vs non-asset holders. This has nothing to do with wages. I lay blame on monetary policies and politicians with zero knowledge relying solely on monetary policies to define a future. The govt needs more educated people.
- IG_Semmelweiss 7y ago
  "The govt needs more educated people" Nonono you have it backwards! It is precisely the pretense of knowledge of the ivory-tower educated krugman/bernake/etc that got us into the current mess in the first place. What we need is not "better educated" govt staff. What we need is less govt staff, period!
nwah1 7y ago
"Asset prices" is kind of a codeword for land titles and artificial scarcities. Inflation in general doesn't occur as a result of tax cuts, but rising prices are confined to those particular areas... which is a clue on where to focus policy. But aside from that, I would generally agree with the consensus economics positions that, all else being equal, lower taxes on production will unlock more production, and lower prices on healthcare will increase demand for healthcare. And that minimum wage will reduce demand for unskilled labor.
baron816 7y ago
> what a lot of economists in the news say TV economists are definitely a different breed. Most real labor economists acknowledge that the issue is tricky. I (not an economist) don’t like the minimum wage since it’s really a poor tool for the job. Society agrees that people should have a minimum standard of living, but then place the burden of providing that standard on a very narrow range of businesses. That burden should just be spread across all of society by way of a negative income tax.
- petra 7y ago
  There are plenty of ways to view the role of businesses in society. One particular way is "the triple bottom line": part of running a business is a responsibility for taking care of your employees, your community and the environment. And minimum wage laws are a part of that.
  - baron816 7y ago
    Ok. I’m not a corporatists.
FabHK 7y ago
> a lot of economics as it’s used for political decisions is way oversimplified to the point of being useless or just plain wrong. Absolutely. A point well made by James Kwak in his book Economism: Bad Economics and the Rise of Inequality, where he complains about this caricature of Economics 101 that is often used to justify laissez-faire policies. https://economism.net https://economism.net

davidw 7y ago

Most real economists go much further than the sound bite types of stuff. I mean, the article itself says: "A number of peer-reviewed academic studies have found little to no impact on hiring as states and municipalities have raised the minimum wage." Those are economists doing that research.

nine_zeros 7y ago

I think typical economists like to think of the world as a perfectly rational system. They look at the world from the lens of some bullshit econ 101 nonsense. Extraordinary economists figure out that reality is super complicated, often uncontrollable at all. All you can do is experiments. A real example of this is the Bernanke asset inflation. All he could think about is assets and recovery of banking system. He thought like a middle aged man who just has a few more years to live. It never once occurred to him that his policies could eat up childrens future. Even if it did occur, future monetary policies never went back to "normal" or equitable. As a result, the vast disparity today is just asset holders vs non-asset holders. This has nothing to do with wages. I lay blame on monetary policies and politicians with zero knowledge relying solely on monetary policies to define a future. The govt needs more educated people.

IG_Semmelweiss 7y ago
"The govt needs more educated people" Nonono you have it backwards! It is precisely the pretense of knowledge of the ivory-tower educated krugman/bernake/etc that got us into the current mess in the first place. What we need is not "better educated" govt staff. What we need is less govt staff, period!

nwah1 7y ago

"Asset prices" is kind of a codeword for land titles and artificial scarcities. Inflation in general doesn't occur as a result of tax cuts, but rising prices are confined to those particular areas... which is a clue on where to focus policy. But aside from that, I would generally agree with the consensus economics positions that, all else being equal, lower taxes on production will unlock more production, and lower prices on healthcare will increase demand for healthcare. And that minimum wage will reduce demand for unskilled labor.

baron816 7y ago

> what a lot of economists in the news say TV economists are definitely a different breed. Most real labor economists acknowledge that the issue is tricky. I (not an economist) don’t like the minimum wage since it’s really a poor tool for the job. Society agrees that people should have a minimum standard of living, but then place the burden of providing that standard on a very narrow range of businesses. That burden should just be spread across all of society by way of a negative income tax.

petra 7y ago
There are plenty of ways to view the role of businesses in society. One particular way is "the triple bottom line": part of running a business is a responsibility for taking care of your employees, your community and the environment. And minimum wage laws are a part of that.
- baron816 7y ago
  Ok. I’m not a corporatists.

FabHK 7y ago

> a lot of economics as it’s used for political decisions is way oversimplified to the point of being useless or just plain wrong. Absolutely. A point well made by James Kwak in his book Economism: Bad Economics and the Rise of Inequality, where he complains about this caricature of Economics 101 that is often used to justify laissez-faire policies. https://economism.net https://economism.net