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N. N. Taleb answers that in the black swan. Better NO MODEL, than the wrong model. We do that with a lot of nature disasters, earthquakes, volcanos, we simply

by Adrox 5y ago

N. N. Taleb answers that in the black swan. Better NO MODEL, than the wrong model. We do that with a lot of nature disasters, earthquakes, volcanos, we simply don't know when they gonna happen, and build according (no buildings near volcanos, better and better buildings earthquake resistant, instead of trying to predict when and where they happen and evacuate people, that we can't). I would be more happy if a economist said right now: "I don't know what's gonna happen, I have no idea what to do". Than: "We should not raise minimum salary, etc, etc.." And it turns out to be wrong.

SantalBlush 5y ago
That's a fallacy. There is no agnosticism when it comes to earthquakes, weather, economics, or physics. Every single person on this earth makes day-to-day decisions based on their mental models of how these things work. You just described a model when you wrote "...no buildings near volcanos." Make no mistake, that is absolutely a model of where volcanic eruptions occur, it's just a very simple one. Now here's the question: what do you mean by "near"? Is it within 20 miles? 100 miles? As you try to answer that question, you are refining your model. Just saying, "Well, you know, it's just near" is a cop-out. It's not very useful. Do you perform work in exchange for money? Then you believe your currency will hold a reasonable amount of its value until you get paid, and you might believe that based on things like the currency's historical performance, etc. That is part of your economic model, and every single person who participates in the economy has a model like that. The difference in the academic discipline is that one should be precise in one's descriptions (which is what the math is for) so if they're wrong, they have no wiggle room to make ad hoc adjustments and pretend their model was actually right. So if anyone wants to criticize mainstream economic models, the real criticism should be that they aren't precise enough.
- Adrox 5y ago
  What is the fallacy? Yes, I have/use economic models in my life. The difference is I don't use them to justify changing the life of millions of people, not even my own family. I advice them, and tell them what is in my opinion in what best to do. But I always start with "I am not a financial advisor". Talking about economy now one can be 100% sure about anything. Now change the camera to the hundreds of "economists" making predictions without any track record, without any disclamer and with 100% certains. Not just "TV"/news economists, I live in Europe, which has 27 Financial Ministers, when there is a crisis all off them always come out announcing "measures" as they know how we get out of the crisis, that none of them imagined it could happen, but knows for sure how to get out of it... I actually don't have anything against Krugman (that actually won the Sveriges Riksbank Prize in Economic): https://www.snopes.com/fact-check/paul-krugman-internets-effect-economy/ https://www.snopes.com/fact-check/paul-krugman-internets-eff... He never aknowledge his error, didn't even reflected why he failed this, and how to avoid it in the future, and no one asks him about it... And he is one of the "best" ones. The news is full of this kind of "predictions" and "economic models", that are mostly wrong all the time, and then we come back and ask the same guys how to fix things now? What credibility to they have? As much as me?
  - SantalBlush 5y ago
    I see Dr. Oz promoting his latest super food on TV, even suggesting that it might cure my cancer. Clearly he's a quack, and there are other doctors on TV like him, therefore modern medicine is nonsense. Now you might think you're not applying that faulty logic here, but you really are. I don't care what some paid pundit on TV was trying to sell you; use your head.
    - Adrox 5y ago
      I precisely gave the example of Krugman, who won a important prize. If they would give the Nobel of Medicine to Dr. Oz, without much general commotion from other doctors: I would for sure consider Medicine a quack, or at least 90% of it, which is the one I use. Now the questions is, are 90% of economists more close to Doctors or to astrologers? If most of economist are quackers and I cannot distinguish them, and most of the quackers end up in Government positions and Universities: economy is quackery!

by Adrox 5y ago

SantalBlush 5y ago

That's a fallacy. There is no agnosticism when it comes to earthquakes, weather, economics, or physics. Every single person on this earth makes day-to-day decisions based on their mental models of how these things work. You just described a model when you wrote "...no buildings near volcanos." Make no mistake, that is absolutely a model of where volcanic eruptions occur, it's just a very simple one. Now here's the question: what do you mean by "near"? Is it within 20 miles? 100 miles? As you try to answer that question, you are refining your model. Just saying, "Well, you know, it's just near" is a cop-out. It's not very useful. Do you perform work in exchange for money? Then you believe your currency will hold a reasonable amount of its value until you get paid, and you might believe that based on things like the currency's historical performance, etc. That is part of your economic model, and every single person who participates in the economy has a model like that. The difference in the academic discipline is that one should be precise in one's descriptions (which is what the math is for) so if they're wrong, they have no wiggle room to make ad hoc adjustments and pretend their model was actually right. So if anyone wants to criticize mainstream economic models, the real criticism should be that they aren't precise enough.

Adrox 5y ago
What is the fallacy? Yes, I have/use economic models in my life. The difference is I don't use them to justify changing the life of millions of people, not even my own family. I advice them, and tell them what is in my opinion in what best to do. But I always start with "I am not a financial advisor". Talking about economy now one can be 100% sure about anything. Now change the camera to the hundreds of "economists" making predictions without any track record, without any disclamer and with 100% certains. Not just "TV"/news economists, I live in Europe, which has 27 Financial Ministers, when there is a crisis all off them always come out announcing "measures" as they know how we get out of the crisis, that none of them imagined it could happen, but knows for sure how to get out of it... I actually don't have anything against Krugman (that actually won the Sveriges Riksbank Prize in Economic): https://www.snopes.com/fact-check/paul-krugman-internets-effect-economy/ https://www.snopes.com/fact-check/paul-krugman-internets-eff... He never aknowledge his error, didn't even reflected why he failed this, and how to avoid it in the future, and no one asks him about it... And he is one of the "best" ones. The news is full of this kind of "predictions" and "economic models", that are mostly wrong all the time, and then we come back and ask the same guys how to fix things now? What credibility to they have? As much as me?
- SantalBlush 5y ago
  I see Dr. Oz promoting his latest super food on TV, even suggesting that it might cure my cancer. Clearly he's a quack, and there are other doctors on TV like him, therefore modern medicine is nonsense. Now you might think you're not applying that faulty logic here, but you really are. I don't care what some paid pundit on TV was trying to sell you; use your head.
  - Adrox 5y ago
    I precisely gave the example of Krugman, who won a important prize. If they would give the Nobel of Medicine to Dr. Oz, without much general commotion from other doctors: I would for sure consider Medicine a quack, or at least 90% of it, which is the one I use. Now the questions is, are 90% of economists more close to Doctors or to astrologers? If most of economist are quackers and I cannot distinguish them, and most of the quackers end up in Government positions and Universities: economy is quackery!