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This is an extremely valid point. If you look at the stories that are posted daily on Yahoo! Finance, nearly all of them are market predictions by people with a

This is an extremely valid point. If you look at the stories that are posted daily on Yahoo! Finance, nearly all of them are market predictions by people with a vested interest in their predictions (beyond simply trying to be correct). I think this is still lost on most consumers; most people think stock analysts are the same as economists, and that's completely wrong. A good economist will tell you that they can't predict the stock market, but they can tell you what the economy will do. That's enough to let you know that the direction of the economy and the stock market are not directly linked.

dxbydt 15y ago
>> A good economist ...can tell you what the economy will do. I was sipping a venti mocha when I read this and I laughed so hard there's mocha all over my keyboard. There are people here, actual paid economists, who are doubling up in laughter at your assertion.
- irrumator 15y ago
  I don't know what else to expect from a thread with an editorialized title taken from Reddit and ZeroHedge of all places.
- silverbax88 15y ago
  That's funny, because I have some actual paid economists who work for me and they are scarily accurate. But I could throttle back and say 'they know what the economy will LIKELY do'. I still think you are transposing economists and analysts.
  - daeken 15y ago
    No, an economist knows what the economy should do, not what it will do or is likely to do.
    - silverbax88 15y ago
      Sure, I can accept that.
    - mattm 15y ago
      Or can explain what has happened in the past.
  - steve8918 15y ago
    Just out of curiosity, did any of your economists predict the US recession back in 2007, or the US housing crisis? From what I recall, almost none did.
    - silverbax88 15y ago
      Actually, many did. Economists were telling us that the economy was shaky all through the 00's. Economists told us in 2006 that the market problems from Wall Street would spread into housing. Again, there is a difference between stock analysts and economists. Economists are looking at numbers, trends and history more like a computer scientist. Economists are even often specialized into various regions of the country. A stock analyst is going off of timing and trends more than data. If you've ever traded stocks heavily, you learn quickly that traders throw away yesterday...'that money's gone'. Having worked to make companies profitable, it's unsettling to realize that the stock market is full of people who know how stocks work but have no idea how business works. I think I've posted this before but in one past company we moved millions of dollars of product around before we did our annual inventory just so our numbers would match what Wall Street expected. We actually needed much more on hand than the stock market wanted just to do business, but they wouldn't have any idea about that.
      - steve8918 15y ago
        I've always found that economists for the most part have been extremely unreliable in forecasting things like recessions. (Also stock analysts are useless too) Case in point, an article from 2007, pre-recession: http://www.nytimes.com/2007/03/04/business/yourmoney/04view.html http://www.nytimes.com/2007/03/04/business/yourmoney/04view....
        silverbax88 15y ago
        I remember that article. It had two glaring ommissions: 1. Economists were not aware that there would be a major terrorist attack six months later 2. Economists did predict the recession that occurred in March 2001 due to the Bush administration's desire to weaken the dollar. When polled, a few economists were polled if there would be a double dip recession and 95% said no- a fact that changed six months later.
- cynicalkane 15y ago
  As economics, as a field, becomes more powerful, the economy becomes more stable. I think this is probably a positive indicator for the value of economics. This recession is severe, but it has nothing on the recessions of the past. Let's not throw out this knowledge; it was won by the accumulated experience of economic hardship unimaginable to modern Americans. I have a hard time believing there are any "actual paid economists... doubling up in laughter" in your vicinity. Something about the attitude of your post.
  - arethuza 15y ago
    "As economics, as a field, becomes more powerful, the economy becomes more stable" So you are asserting that economics as a field causes stability in the economy?
  - byrneseyeview 15y ago
    People entering the workforce forty years ago could reasonably guess when they'd retire and what they'd be doing at the time. I know very few people who think they'll have the same job five years from now. It seems very likely that the argument that the economy is getting more stable is false. Here's why: underlying predictability probably increases volatily. People love to lever up when they're certain; "Private Equity" as an asset class refers to both VC deals and leveraged buyouts because in both cases, they fine-tune their leverage to get the same (high) volatility. Increased certainty makes bankers more willing to lend, and speculative buyers are always willing to borrow. In my experience, speculative borrowers and the marginal banker overestimate decreases in volatility. Thus, a more superficially predictable economy will lever up fast enough to more than counteract that (sort of like the theory that airbags increase traffic fatalities because drivers overestimate how safe they are and thus take extra risks). For economic volatility to actually dampen, you'd need economists to come up with better predictions that sound really stupid, so bankers and speculators would disregard them.
  - scarmig 15y ago
    This is inaccurate, or misleading at best. "It has nothing on the recessions of the past" is only true if you're looking at the pre-WW2 period. Compared to recessions since then, this is the most severe and long-lasting. There has been no recession since the Great Depression where unemployment has stayed as high as it is for so long. Economists spoke of a Great Moderation that had occurred thanks to their ideological theorizing, but that is just an unfunny punchline to a joke now.
- grammaton 15y ago
  "Mainstream economists are masters of the ad hoc explanation for whatever happened yesterday." - John Michael Greer
- 16s 15y ago
  Yes, they are like weathermen. The best they can do is make an educated guess.
- smallblacksun 15y ago
  The First Law of Economists: For every economist, there exists an equal and opposite economist. The Second Law of Economists: They're both wrong.
  - ph0rque 15y ago
    So the trick is to find a direction orthogonal to all economists, and thus find out what the economy really is going to do? Not a bad idea. I guess the hardest part about it is not letting an economist read about this direction, and claim it as his own...
    - rasur 15y ago
      Sounds like we need an Economist in the Complex plane.. Hmm, an Imaginary Economist.. Sounds somehow apt?
hvs 15y ago
Actually, only a dishonest economist would say, "they can tell you what the economy will do." NO ONE knows what the economy will do. People make educated guesses, some better than others, but for every economist that tells you one thing, you can find another that will tell you the exact opposite.
- deleted 15y ago
  [deleted]
jprobert 15y ago
I agree with the fact that most people who make these comments have a bias. While these bias must be disclosed they are often not done so until the end of the video or article that they've written. It should be required that a person disclose any potential biases at the beginning of their argument so that the audience has a clear understanding of what motivates them.
patrickgzill 15y ago
I think you need to do a Yahoo! search on Lawrence Yun, economist for the National Association of Realtors. Then you will understand why I find your comment quite humorous....
- bediger 15y ago
  Wouldn't someone employed by realtors be one of those vested interest parties, who can't make a rational prediction, because they'd loose their job if they did?
marcamillion 15y ago
I think a more accurate statement is that a 'good' economist can tell you what the economy MIGHT do, based on what it has done in similar circumstances in the past. Economics is the study, and explanation, of the way things work - from a historical perspective.

dxbydt 15y ago

>> A good economist ...can tell you what the economy will do. I was sipping a venti mocha when I read this and I laughed so hard there's mocha all over my keyboard. There are people here, actual paid economists, who are doubling up in laughter at your assertion.

irrumator 15y ago
I don't know what else to expect from a thread with an editorialized title taken from Reddit and ZeroHedge of all places.
silverbax88 15y ago
That's funny, because I have some actual paid economists who work for me and they are scarily accurate. But I could throttle back and say 'they know what the economy will LIKELY do'. I still think you are transposing economists and analysts.
- daeken 15y ago
  No, an economist knows what the economy should do, not what it will do or is likely to do.
  - silverbax88 15y ago
    Sure, I can accept that.
  - mattm 15y ago
    Or can explain what has happened in the past.
- steve8918 15y ago
  Just out of curiosity, did any of your economists predict the US recession back in 2007, or the US housing crisis? From what I recall, almost none did.
  - silverbax88 15y ago
    Actually, many did. Economists were telling us that the economy was shaky all through the 00's. Economists told us in 2006 that the market problems from Wall Street would spread into housing. Again, there is a difference between stock analysts and economists. Economists are looking at numbers, trends and history more like a computer scientist. Economists are even often specialized into various regions of the country. A stock analyst is going off of timing and trends more than data. If you've ever traded stocks heavily, you learn quickly that traders throw away yesterday...'that money's gone'. Having worked to make companies profitable, it's unsettling to realize that the stock market is full of people who know how stocks work but have no idea how business works. I think I've posted this before but in one past company we moved millions of dollars of product around before we did our annual inventory just so our numbers would match what Wall Street expected. We actually needed much more on hand than the stock market wanted just to do business, but they wouldn't have any idea about that.
    - steve8918 15y ago
      I've always found that economists for the most part have been extremely unreliable in forecasting things like recessions. (Also stock analysts are useless too) Case in point, an article from 2007, pre-recession: http://www.nytimes.com/2007/03/04/business/yourmoney/04view.html http://www.nytimes.com/2007/03/04/business/yourmoney/04view....
      - silverbax88 15y ago
        I remember that article. It had two glaring ommissions: 1. Economists were not aware that there would be a major terrorist attack six months later 2. Economists did predict the recession that occurred in March 2001 due to the Bush administration's desire to weaken the dollar. When polled, a few economists were polled if there would be a double dip recession and 95% said no- a fact that changed six months later.
cynicalkane 15y ago
As economics, as a field, becomes more powerful, the economy becomes more stable. I think this is probably a positive indicator for the value of economics. This recession is severe, but it has nothing on the recessions of the past. Let's not throw out this knowledge; it was won by the accumulated experience of economic hardship unimaginable to modern Americans. I have a hard time believing there are any "actual paid economists... doubling up in laughter" in your vicinity. Something about the attitude of your post.
- arethuza 15y ago
  "As economics, as a field, becomes more powerful, the economy becomes more stable" So you are asserting that economics as a field causes stability in the economy?
- byrneseyeview 15y ago
  People entering the workforce forty years ago could reasonably guess when they'd retire and what they'd be doing at the time. I know very few people who think they'll have the same job five years from now. It seems very likely that the argument that the economy is getting more stable is false. Here's why: underlying predictability probably increases volatily. People love to lever up when they're certain; "Private Equity" as an asset class refers to both VC deals and leveraged buyouts because in both cases, they fine-tune their leverage to get the same (high) volatility. Increased certainty makes bankers more willing to lend, and speculative buyers are always willing to borrow. In my experience, speculative borrowers and the marginal banker overestimate decreases in volatility. Thus, a more superficially predictable economy will lever up fast enough to more than counteract that (sort of like the theory that airbags increase traffic fatalities because drivers overestimate how safe they are and thus take extra risks). For economic volatility to actually dampen, you'd need economists to come up with better predictions that sound really stupid, so bankers and speculators would disregard them.
- scarmig 15y ago
  This is inaccurate, or misleading at best. "It has nothing on the recessions of the past" is only true if you're looking at the pre-WW2 period. Compared to recessions since then, this is the most severe and long-lasting. There has been no recession since the Great Depression where unemployment has stayed as high as it is for so long. Economists spoke of a Great Moderation that had occurred thanks to their ideological theorizing, but that is just an unfunny punchline to a joke now.
grammaton 15y ago
"Mainstream economists are masters of the ad hoc explanation for whatever happened yesterday." - John Michael Greer
16s 15y ago
Yes, they are like weathermen. The best they can do is make an educated guess.
smallblacksun 15y ago
The First Law of Economists: For every economist, there exists an equal and opposite economist. The Second Law of Economists: They're both wrong.
- ph0rque 15y ago
  So the trick is to find a direction orthogonal to all economists, and thus find out what the economy really is going to do? Not a bad idea. I guess the hardest part about it is not letting an economist read about this direction, and claim it as his own...
  - rasur 15y ago
    Sounds like we need an Economist in the Complex plane.. Hmm, an Imaginary Economist.. Sounds somehow apt?

hvs 15y ago

Actually, only a dishonest economist would say, "they can tell you what the economy will do." NO ONE knows what the economy will do. People make educated guesses, some better than others, but for every economist that tells you one thing, you can find another that will tell you the exact opposite.

deleted 15y ago
[deleted]

jprobert 15y ago

I agree with the fact that most people who make these comments have a bias. While these bias must be disclosed they are often not done so until the end of the video or article that they've written. It should be required that a person disclose any potential biases at the beginning of their argument so that the audience has a clear understanding of what motivates them.

patrickgzill 15y ago

I think you need to do a Yahoo! search on Lawrence Yun, economist for the National Association of Realtors. Then you will understand why I find your comment quite humorous....

bediger 15y ago
Wouldn't someone employed by realtors be one of those vested interest parties, who can't make a rational prediction, because they'd loose their job if they did?

marcamillion 15y ago

I think a more accurate statement is that a 'good' economist can tell you what the economy MIGHT do, based on what it has done in similar circumstances in the past. Economics is the study, and explanation, of the way things work - from a historical perspective.