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I am not an economist. I have never even played one on TV.

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No Elephants Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Aug-28-13 04:35 AM
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I am not an economist. I have never even played one on TV.
But, apparently, I either nailed it or got close. I will explain.

In a NYT Opinionator article entitled What Is Economics Good For?, Alex Rosenberg and Tyler Curtain opine that economics is not a science or even a good predictor. (Duh?) They then go on to tell us what they think economics is good for.

Social and political philosophers have helped us answer this question, and so understand what economics is really all about. Since Hobbes, philosophers have been concerned about the design and management of institutions that will protect us from the knave within us all, those parts of our selves tempted to opportunism, free riding and generally avoiding the costs of civil life while securing its benefits. Hobbes and, later, Hume along with modern philosophers like John Rawls and Robert Nozick recognized that an economic approach had much to contribute to the design and creative management of such institutions. Fixing bad economic and political institutions (concentrations of power, collusions and monopolies), improving good ones (like the Feds open-market operations), designing new ones (like electromagnetic bandwidth auctions), in the private and public sectors, are all attainable tasks of economic theory.

What Is Economics Good For?

First, needing philosophers to explain the point of your job, and in this case, philosophers from two disciplines, is a huge red flag.

Indeed, much of that quote sounds like sheer bs to me.

Economists were not creatively managing institutions, or saving society from the knaves, or fixing anything, or we would not have had the Wall Street Crash of 1929 or the Wall Street Crash of 2008, which was worse in some other countries than in the US, or the several real estate bubbles that we've been having since the 1980s, or the savings and loan debacle, etc.

Who did fix the crash of 1929? Well, Christina Romer, one of Obama's economists early on, says it got fixed by accident--something about the gold standard. I say the fixers were mostly FDR, Joe Kennedy and lots of lawyers writing and passing legislation. However, FDR then got deficit hawkish and it took WWII to fix things.

Who made the recovery after 2008 so anemic? Maybe DLC style and Republican style economists, like Geithner (whom wiki describes as an "economic policy maker"), Austan Goolsbee (once employed by the DLC), Bernanke (allegedly an expert on the Great Depression), Summers, et al. Oh, and Christina Romer:

Romer showed that fiscal policy played a relatively small role in the recovery from the depression in the US, because taxes were raised in the US almost as quickly as government spending increased during the New Deal. However, accidental monetary policy played a large role in the US recovery from depression. This monetary policy came first from the devaluation of the dollar in terms of gold in 19331934, and later from the flight of European capital to the relatively stable US as war in Europe became more likely.<7>


Romer calculated that a $1.8-trillion package was necessary to fill the output gap, but Summers rejected the proposal and opted not to include it in the memo fearing that a trillion-dollar package would not pass through Congress.<18> The Obama administration ultimately passed an $800-billion package.

(Hey, Larry, good work. Why wait for a then mostly Democratic Congress eager to support Obama in leading the way out of the Depression to cut down down the package, when the WH can do it before ever presenting it to Congress? As if that were actually the reason you cut Romer's proposal by more than half.)

As far as Romer, if spending had nothing to do with recovery from the Great Depression of 1929, how dare she propose spending $1.8 billion to recover from the Crumby Depression of 2008? Wouldn't that just be throwing the money away? Shame on her!

Look how New Demorat Obama loves economists who think spending had nothing to do with the recovery from the Great Depression, not the recovery spending nor the war spending. How very, very conveeeenyent.

Does most of the above stuff from the experts on economics sound like bs to you, too?

Well, then, what does the pseudo science of economics do? Probably something much like the pseudo science of alchemy did, namely employ many more alchemists than should ever have been employed.

Well, a job and appearance fees and power to call some shots are certainly what's in it for economists. Tuition, and, oddly, often prestige, is what's in it for the universities who train economists. But, what's in it for the people who employ economists?

I've found that "Follow the money" and "Who benefits?" to be very good questions to ask when trying to figure out things in modern society. It's really one question, but "cui bono" or "who benefits" is in vogue now, so what the hell.)

My first non-expert, CU post on economics said:

The job of an economist is to believe, or at least make others believe, that markets should determine policy and everything else in our lives.

Also to believe, or at least make others believe, that protecting markets and enriching job destroyers are the greatest possible societal goods.

In one of his plays (Henry IV, Part II), Shakespeare has one of his characters say, "'The first thing we do, let's kill all the lawyers."

I say, leave the lawyers alone. They've helped a lot of poor people and done a lot of social good by suing over dangerous products and fighting in court for the Bill of Rights, often for free or on contingency or for a lot less than they could make in corporate law firms.

School desegregation came about because an NAACP lawyer took the case to a bunch of former lawyers wearing black robes. Newspapers got rights to print things like the Pentagon Papers the same way. FOIA lawsuits force government to reveal things it would rather hide, etc.

But economists......

"25 People to Blame for the Financial Crisis

Alan Greenspan
dek Photo Illustration; Greenspan: Alex Wong / Getty; Getty

The Federal Reserve chairman an economist and a disciple of libertarian icon Ayn Rand met his first major challenge in office by preventing the 1987 stock-market crash from spiraling into something much worse. Then, in the 1990s, he presided over a long economic and financial-market boom and attained the status of Washington's resident wizard. But the super-low interest rates Greenspan brought in the early 2000s and his long-standing disdain for regulation are now held up as leading causes of the mortgage crisis. The maestro admitted in an October congressional hearing that he had "made a mistake in presuming" that financial firms could regulate themselves."
Read more:

And, of course, there are politicians (public servants, my ass) like Bill Clinton, who said that he wanted repeal of Glass Steagall on his desk ASAP, thereby getting Democrats to vote for something they might otherwise have opposed, and Phil Gramm.

Like economists, they rationalize it all away.

And, perhaps even lower, are the lobbyists, like, well, Clinton and Gramm.

Here's the link, but don't bother to click. The entire post is quoted above. (No copyright issue as the post was my own post at DU.)

My second post on economics is too long to quote in full here, but this is the link.

Sorry for the hubris, but I think my poor musings ring truer than the words of the experts, Rosenberg and Curtain.

The poster who says, "I told you so," especially when the poster knows nothing about the topic, must be the worst annoyance on a message board, so I'll only think it (and drop this huge hint about thinking it).

BTW, what supposedly spurred Rosenberg and Curtain to write was the upcoming replacement of Hanky Panky Bernanke at the Fed. Speculation is that Obama will nominate, you guessed it, Summers, the man who cut Romer's recovery proposal by more than half.


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Enthusiast Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Aug-29-13 03:01 AM
Response to Original message
1. I liked that, No Elephants!
In his appointment of Summers(and Pritzker), I guess the President wanted to demonstrate once and for all, that he is not on our side. I didn't need much convincing.
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No Elephants Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Aug-29-13 09:39 AM
Response to Reply #1
2. I was getting convinced by the time he hit Gates and Geithner during the transition.
Guess I'm easily convinced.
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No Elephants Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Aug-29-13 09:42 AM
Response to Reply #1
3. P.S. So far, you've been a fan of my economics posts.
Maybe I should go back to school and get an economics degree.

The whole field strikes me as too Emperor's New Clothes, though.
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