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>Sorry, but it's at this point in the thread that I realize that talking to tech bros on hacker news about monetary policy is actually the seventh circle of hel

by Qasaur 6y ago

>Sorry, but it's at this point in the thread that I realize that talking to tech bros on hacker news about monetary policy is actually the seventh circle of hell. Glhf. Appealing to the authority of mainstream economists in a perpetual state of groupthink is not an argument. It is this kind of hostile and borderline elitist attitude that scares away people from discussing monetary policy and makes it seem more complex than what it really is, and I don't think that is productive at all. Ironically it is the same kind of elitism that caused the collapse of the planned economies of the 20th century (which grade-school students learn about today), despite being comprised of supposed "experts" in economic affairs who should never be questioned.

thomashobohm 6y ago
Please, this isn’t Soviet Russia, economists disagree about practically everything, so the whole argument that the profession has a serious groupthink problem is unconvincing to me. The reason why economists mostly agree on this particular topic-the way the Fed operates-is because it’s exceedingly transparent, theoretically (not to mention mathematically) simple, and empirically verifiable.
- Qasaur 6y ago
  >Please, this isn’t Soviet Russia, economists disagree about practically everything, so the whole argument that the profession has a serious groupthink problem is unconvincing to me. They disagree on a lot of things, that is true, but the one thing they all seem to agree upon (except for Austrian economists) is that the economy can be effectively modelled and that effective policy prescriptions can be derived from said statistical models. It is a supremely complex system and it is the pretence of knowledge (in the words of Hayek) to believe that you can use monetary policy to command it, much less policies based upon empirical models which are as you say constantly bickered and debated about. Furthermore, the Fed is not exceedingly transparent - audits of its operations and its meeting minutes are classified and are not open to public review, as is the case with most central banks in the world. I know because I've tried to ask for copies of open market operation details from my central bank (the Swedish Riksbank) but was denied as they are classified by law (which is incredibly unusual for a society where other government agencies publish everything, including income tax returns).
  - thomashobohm 6y ago
    FOMC Meeting Minutes: https://www.federalreserve.gov/monetarypolicy/fomcminutes20200315.htm https://www.federalreserve.gov/monetarypolicy/fomcminutes202... Fed Audited Financial Statements: https://www.federalreserve.gov/aboutthefed/audited-annual-financial-statements.htm https://www.federalreserve.gov/aboutthefed/audited-annual-fi... I’m sorry that your Swedish central bank is classified, since, based on your worldview, there are presumably a bunch of Swedish economists working there behind closed doors to screw you over.
    - Qasaur 6y ago
      FOMC minutes are published, but not other meetings which are arguably more important, including the meetings of the Board. https://www.federalreserve.gov/aboutthefed/boardmeetings/meetingdates.htm https://www.federalreserve.gov/aboutthefed/boardmeetings/mee... "Effective March 15, 2020, the meeting was closed to public observation by Order of the Board of Governors1 because the matters fall under exemption(s) 9(A)(i) of the Government in the Sunshine Act (5 U.S.C. Section 552b(c)), and it was determined that the public interest did not require opening the meeting." This seems to be the case for almost all of their meetings.
      - thomashobohm 6y ago
        They only keep certain parts secret so market actors don’t make decisions based on what the Fed is thinking about doing. Obviously if people knew the Fed was thinking about raising interest rates, for example, it would affect their decisions (and the market as a whole) negatively. This is something any business or economics undergrad learns in an introductory banking class; since you are evidently unfamiliar with the Fed’s system (as opposed to the Swedish one), you may find it helpful to consult an American money and banking textbook. From your own link, verbatim: "Items considered in closed session include primarily - Bank and bank holding company supervisory matters, discussions of which generally disclose information from bank examination reports or commercial and financial information obtained in confidence by the Board - Monetary policy and other matters whose premature release could be used in financial speculation - Personnel matters." Not very nebulous, eh?

by Qasaur 6y ago

thomashobohm 6y ago

Please, this isn’t Soviet Russia, economists disagree about practically everything, so the whole argument that the profession has a serious groupthink problem is unconvincing to me. The reason why economists mostly agree on this particular topic-the way the Fed operates-is because it’s exceedingly transparent, theoretically (not to mention mathematically) simple, and empirically verifiable.

Qasaur 6y ago
>Please, this isn’t Soviet Russia, economists disagree about practically everything, so the whole argument that the profession has a serious groupthink problem is unconvincing to me. They disagree on a lot of things, that is true, but the one thing they all seem to agree upon (except for Austrian economists) is that the economy can be effectively modelled and that effective policy prescriptions can be derived from said statistical models. It is a supremely complex system and it is the pretence of knowledge (in the words of Hayek) to believe that you can use monetary policy to command it, much less policies based upon empirical models which are as you say constantly bickered and debated about. Furthermore, the Fed is not exceedingly transparent - audits of its operations and its meeting minutes are classified and are not open to public review, as is the case with most central banks in the world. I know because I've tried to ask for copies of open market operation details from my central bank (the Swedish Riksbank) but was denied as they are classified by law (which is incredibly unusual for a society where other government agencies publish everything, including income tax returns).
- thomashobohm 6y ago
  FOMC Meeting Minutes: https://www.federalreserve.gov/monetarypolicy/fomcminutes20200315.htm https://www.federalreserve.gov/monetarypolicy/fomcminutes202... Fed Audited Financial Statements: https://www.federalreserve.gov/aboutthefed/audited-annual-financial-statements.htm https://www.federalreserve.gov/aboutthefed/audited-annual-fi... I’m sorry that your Swedish central bank is classified, since, based on your worldview, there are presumably a bunch of Swedish economists working there behind closed doors to screw you over.
  - Qasaur 6y ago
    FOMC minutes are published, but not other meetings which are arguably more important, including the meetings of the Board. https://www.federalreserve.gov/aboutthefed/boardmeetings/meetingdates.htm https://www.federalreserve.gov/aboutthefed/boardmeetings/mee... "Effective March 15, 2020, the meeting was closed to public observation by Order of the Board of Governors1 because the matters fall under exemption(s) 9(A)(i) of the Government in the Sunshine Act (5 U.S.C. Section 552b(c)), and it was determined that the public interest did not require opening the meeting." This seems to be the case for almost all of their meetings.
    - thomashobohm 6y ago
      They only keep certain parts secret so market actors don’t make decisions based on what the Fed is thinking about doing. Obviously if people knew the Fed was thinking about raising interest rates, for example, it would affect their decisions (and the market as a whole) negatively. This is something any business or economics undergrad learns in an introductory banking class; since you are evidently unfamiliar with the Fed’s system (as opposed to the Swedish one), you may find it helpful to consult an American money and banking textbook. From your own link, verbatim: "Items considered in closed session include primarily - Bank and bank holding company supervisory matters, discussions of which generally disclose information from bank examination reports or commercial and financial information obtained in confidence by the Board - Monetary policy and other matters whose premature release could be used in financial speculation - Personnel matters." Not very nebulous, eh?