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Are these the same economists that had NO IDEA that the crash in 2006 would happen? If so I think I've had quite enough of their opinions.

deleted 13y ago
[deleted]
jmduke 13y ago
This is somewhat akin to saying, "Are these the same programmers that had NO IDEA the dotcom bubble in 1999 would burst? If so I think I've had quite enough of their opinions."
- smnrchrds 13y ago
  I think Y2K will be a better example for what you're trying to say.
  - aggronn 13y ago
    An even better one would be to say that economists are like the consultants to a massive and public government IT project thats 300 years into the making. Complexity built into the system from the start leads to recurring issues that can't be addressed because of entrenched managers, lazy analysts, and a 300 million line codebase. Thats not to say that if they started from scratch there wouldn't be some unforeseen bugs down the road.
    - dredmorbius 13y ago
      A bigger problem (see my Galbraith quote above) is that Economics seems curiously immune to the process of testability and improvement which are the hallmarks of real science. In fact, several key and foundational theorists expressly deny falsifiability or evidence-based theories. Which is sort of like writing code without ever referring to your specification, use-cases, and/or users, or in fact, compiling or running it.
kbenson 13y ago
Definitely! Similarly, I threw out all the advice I got from my father the day I found out he was wrong about who was going to win the world series that year. I mean, if you can't trust someone to be right about everything, why even listen?
- bazillion 13y ago
  To be fair, he said the Redskins were going to win.
Symmetry 13y ago
It's generally recognized as impossible to predict crashes in advance. If a given crash could be predicted in advance, people wouldn't wait until the deadline to sell off their stuff, they'd sell it right now until the price crashed to the predicted level. The same way that the butterfly effect prevents long term weather predictions, the fact that the market can see economic predictions means that all crashes that occur are ones that weren't generally predicted. Now, there's the Great Recession that got going in 2008 which economists should be embarrassed about not seeing as a consequence of the crash of 2006, but we all know that economists don't agree much about macro stuff. By contrast, the effect of patents is all microeconomic. And microeconomics is the part of economics that is actually generally understood and agreed upon by professionals.
- dredmorbius 13y ago
  It's possible to predict bubble-induced crashes in advance, to getting the timing right can be difficult. There were those who predicted the 1929 stock market crash, the dot-com bust, the 2007 housing bubble crash, and many other bubbles. The precise timing depends however on specific events, including but not limited to crowd psychology, and the triggers may not be known for years (for example: what caused mortgages to dry up suddenly in 2007). As Jeffrey Reuben has pointed out, all but one of the post-WWII recessions in the US was preceded by an oil price rise. Including the 2008 recession. Agreed that microeconomics (mostly) works better than macro, though it too has its issues.
dredmorbius 13y ago
This is a largely emotional reaction against the discipline but FedRegister's got a pretty good point: economists and economics (as a whole, there are exceptions) have done rather poorly in either predicting the future or providing solid rationales for what is and why it should be. This is a fact that's widely recognized, even among economists. Source: I've got an undergraduate degree in the topic, have been continuing to study it over the subsequent decades, and have been specifically researching in depth the foundations of the discipline in the past few months. One rather striking failure of economics has been its lack of interest in long-term history. Which is peculiar if you've read Adam Smith as he actually goes into depth on the matter. It's the #2 economist, David Ricardo, who drops that view (though there continue to be economic historians), a fact which was criticized quite strongly by Arnold Toynbee (the economic historian, not his universal historian nephew Arnold J. Toynbee), whose Lectures on the Industrial Revolution begin with the observation: It has been a weakness of the science, as pursued in England, that it has been too much dissociated from History. Adam Smith and Malthus, indeed, had historical minds; but the form of modern text-books is due to Ricardo, whose mind was entirely unhistorical. http://archive.org/stream/industrialrevol00toyngoog#page/n16/mode/2up http://archive.org/stream/industrialrevol00toyngoog#page/n16... (page 1, 18 of the PDF) It goes further than this. Nassau Senior, a strong early supporter of Ricardo writes: "Political economy is not greedy of facts; it is independent of facts." Serious WTF moment there. The Austrian School (from which Classical Liberalism, a/k/a Libertarianism takes its lead) is even worse. Speaking of praexology, the interpretive method on which it's based: "Its statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification or falsification on the ground of experience and facts." -- Ludwig von Mises http://www.goodreads.com/quotes/846342-praxeology-is-a-theoretical-and-systematic-not-a-historical-science http://www.goodreads.com/quotes/846342-praxeology-is-a-theor... Suddenly the whole "reality-based" vs. "faith-based" divide becomes a tad bit easier to understand. There's a great deal else out there, and no, not all of economics is complete tosh, but a great deal of it really should be tossed out.
- lukifer 13y ago
  Many fields can succumb to a compartmentalizing of ideas and getting lost in leaky abstractions, and economics is possibly one of the most egregious. To very loosely paraphrase Alan Kay, anyone serious about economics will also study psychology, anthropology, sociology, and evolutionary biology. These fields are deeply interconnected in the same sense that calculus, physics and chemistry work together to create an understanding of complex physical systems. (For a good start, see Dan Ariely's behavioral economics.)

deleted 13y ago

[deleted]

jmduke 13y ago

This is somewhat akin to saying, "Are these the same programmers that had NO IDEA the dotcom bubble in 1999 would burst? If so I think I've had quite enough of their opinions."

smnrchrds 13y ago
I think Y2K will be a better example for what you're trying to say.
- aggronn 13y ago
  An even better one would be to say that economists are like the consultants to a massive and public government IT project thats 300 years into the making. Complexity built into the system from the start leads to recurring issues that can't be addressed because of entrenched managers, lazy analysts, and a 300 million line codebase. Thats not to say that if they started from scratch there wouldn't be some unforeseen bugs down the road.
  - dredmorbius 13y ago
    A bigger problem (see my Galbraith quote above) is that Economics seems curiously immune to the process of testability and improvement which are the hallmarks of real science. In fact, several key and foundational theorists expressly deny falsifiability or evidence-based theories. Which is sort of like writing code without ever referring to your specification, use-cases, and/or users, or in fact, compiling or running it.

kbenson 13y ago

Definitely! Similarly, I threw out all the advice I got from my father the day I found out he was wrong about who was going to win the world series that year. I mean, if you can't trust someone to be right about everything, why even listen?

bazillion 13y ago
To be fair, he said the Redskins were going to win.

Symmetry 13y ago

It's generally recognized as impossible to predict crashes in advance. If a given crash could be predicted in advance, people wouldn't wait until the deadline to sell off their stuff, they'd sell it right now until the price crashed to the predicted level. The same way that the butterfly effect prevents long term weather predictions, the fact that the market can see economic predictions means that all crashes that occur are ones that weren't generally predicted. Now, there's the Great Recession that got going in 2008 which economists should be embarrassed about not seeing as a consequence of the crash of 2006, but we all know that economists don't agree much about macro stuff. By contrast, the effect of patents is all microeconomic. And microeconomics is the part of economics that is actually generally understood and agreed upon by professionals.

dredmorbius 13y ago
It's possible to predict bubble-induced crashes in advance, to getting the timing right can be difficult. There were those who predicted the 1929 stock market crash, the dot-com bust, the 2007 housing bubble crash, and many other bubbles. The precise timing depends however on specific events, including but not limited to crowd psychology, and the triggers may not be known for years (for example: what caused mortgages to dry up suddenly in 2007). As Jeffrey Reuben has pointed out, all but one of the post-WWII recessions in the US was preceded by an oil price rise. Including the 2008 recession. Agreed that microeconomics (mostly) works better than macro, though it too has its issues.

dredmorbius 13y ago

This is a largely emotional reaction against the discipline but FedRegister's got a pretty good point: economists and economics (as a whole, there are exceptions) have done rather poorly in either predicting the future or providing solid rationales for what is and why it should be. This is a fact that's widely recognized, even among economists. Source: I've got an undergraduate degree in the topic, have been continuing to study it over the subsequent decades, and have been specifically researching in depth the foundations of the discipline in the past few months. One rather striking failure of economics has been its lack of interest in long-term history. Which is peculiar if you've read Adam Smith as he actually goes into depth on the matter. It's the #2 economist, David Ricardo, who drops that view (though there continue to be economic historians), a fact which was criticized quite strongly by Arnold Toynbee (the economic historian, not his universal historian nephew Arnold J. Toynbee), whose Lectures on the Industrial Revolution begin with the observation: It has been a weakness of the science, as pursued in England, that it has been too much dissociated from History. Adam Smith and Malthus, indeed, had historical minds; but the form of modern text-books is due to Ricardo, whose mind was entirely unhistorical. http://archive.org/stream/industrialrevol00toyngoog#page/n16/mode/2up http://archive.org/stream/industrialrevol00toyngoog#page/n16... (page 1, 18 of the PDF) It goes further than this. Nassau Senior, a strong early supporter of Ricardo writes: "Political economy is not greedy of facts; it is independent of facts." Serious WTF moment there. The Austrian School (from which Classical Liberalism, a/k/a Libertarianism takes its lead) is even worse. Speaking of praexology, the interpretive method on which it's based: "Its statements and propositions are not derived from experience. They are, like those of logic and mathematics, a priori. They are not subject to verification or falsification on the ground of experience and facts." -- Ludwig von Mises http://www.goodreads.com/quotes/846342-praxeology-is-a-theoretical-and-systematic-not-a-historical-science http://www.goodreads.com/quotes/846342-praxeology-is-a-theor... Suddenly the whole "reality-based" vs. "faith-based" divide becomes a tad bit easier to understand. There's a great deal else out there, and no, not all of economics is complete tosh, but a great deal of it really should be tossed out.

lukifer 13y ago
Many fields can succumb to a compartmentalizing of ideas and getting lost in leaky abstractions, and economics is possibly one of the most egregious. To very loosely paraphrase Alan Kay, anyone serious about economics will also study psychology, anthropology, sociology, and evolutionary biology. These fields are deeply interconnected in the same sense that calculus, physics and chemistry work together to create an understanding of complex physical systems. (For a good start, see Dan Ariely's behavioral economics.)