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Fed’s Clarida ‘Surprised’ by Inflation Report

10 points by throwkeep 5y ago

fallingfrog 5y ago
Yeah the fed’s record as far as making accurate predictions goes is pretty laughable. But they continue to confidently make all sorts of statements about what’s going to happen. If economics was a science, someone would at some point ask why no two economists ever agree, and why they continue to be completely unable to use their models to make accurate predictions. Like, if their models mean anything at all, they should have at least been able to see major speculative bubbles like 2008. I mean the fact that housing was hugely overpriced at that moment should have been entered into their data somewhere as a basic fact about the economy. It’s like watching a blind person claim to have the best vision in the world as they walk right into a wall. Consulting punxsutawney phil would be more accurate. What’s really stunning is that these witless mountebanks appear to be completely unaware of how devastatingly wrong they consistently are.
- fallingfrog 5y ago
  Lol I probably should not have written what I really thought
  - deleted 5y ago
    [deleted]
- jfengel 5y ago
  They did know about the speculative bubble. The problem is that they couldn't predict when it would pop. And that's one of the basic contradictions of economics: if people knew when the bubbles would pop, they'd get ahead of it and prevent them from popping. They can't know when it will pop. But they will know when it's there. Economics is a lot like thermodynamics (and draws a lot from it). They don't know the entire state of the system in detail. But they can draw long-term predictions about its equilibrium state. In economics, those long-term predictions are decades, sometimes years. Certainly not quarters. That doesn't mean that they don't try. We have to have an economic policy. The best thing they could hope for would to slowly deflate bubbles, rather than pop them. They do get better at that over time, though every time they improve the tactics people go out and invent new ways to circumvent them. That's what makes economics both necessary and impossible. Economists would love to be physicists, with nice, simple, trivially-behaving objects. Instead they deal with human behavior. Which is arguably more important, because we're humans, and it all affects us. They're actually more accurate than you think: their inflation prediction was within a couple of points of being right. It's like criticizing a weatherman for predicting 1" of rain when we actually got 1.5". It doesn't mean they were guessing.

10 points by throwkeep 5y ago

Yeah the fed’s record as far as making accurate predictions goes is pretty laughable. But they continue to confidently make all sorts of statements about what’s going to happen. If economics was a science, someone would at some point ask why no two economists ever agree, and why they continue to be completely unable to use their models to make accurate predictions. Like, if their models mean anything at all, they should have at least been able to see major speculative bubbles like 2008. I mean the fact that housing was hugely overpriced at that moment should have been entered into their data somewhere as a basic fact about the economy. It’s like watching a blind person claim to have the best vision in the world as they walk right into a wall. Consulting punxsutawney phil would be more accurate. What’s really stunning is that these witless mountebanks appear to be completely unaware of how devastatingly wrong they consistently are.

fallingfrog 5y ago
Lol I probably should not have written what I really thought
- deleted 5y ago
  [deleted]
jfengel 5y ago
They did know about the speculative bubble. The problem is that they couldn't predict when it would pop. And that's one of the basic contradictions of economics: if people knew when the bubbles would pop, they'd get ahead of it and prevent them from popping. They can't know when it will pop. But they will know when it's there. Economics is a lot like thermodynamics (and draws a lot from it). They don't know the entire state of the system in detail. But they can draw long-term predictions about its equilibrium state. In economics, those long-term predictions are decades, sometimes years. Certainly not quarters. That doesn't mean that they don't try. We have to have an economic policy. The best thing they could hope for would to slowly deflate bubbles, rather than pop them. They do get better at that over time, though every time they improve the tactics people go out and invent new ways to circumvent them. That's what makes economics both necessary and impossible. Economists would love to be physicists, with nice, simple, trivially-behaving objects. Instead they deal with human behavior. Which is arguably more important, because we're humans, and it all affects us. They're actually more accurate than you think: their inflation prediction was within a couple of points of being right. It's like criticizing a weatherman for predicting 1" of rain when we actually got 1.5". It doesn't mean they were guessing.