Economic clowns at every turn

Fascinating title from an article in the Financial Times: Why economists keep being wrong on policy. It comes with a bit of interesting content in its description of the nature of economic theory and policy:

The abiding sin threaded through it all was that of certitude. Perfectly plausible but untested theories, whether about the money supply, fiscal balances and debt levels, or market risk, were elevated to the level of irrefutable facts. Economics, essentially a faith-based discipline, represented itself as a hard science. The real world was reduced by the 1990s to a set of complex mathematical equations that no one, least of all democratically elected politicians, dared challenge.

Thus detached from reality, economic policy swept away the postwar balance between the interests of society and markets. Arid econometrics replaced a measured understanding of political economy. It scarcely mattered that the gains of globalisation were scooped up by the super-rich, that markets became casinos and that fiscal fundamentalism was widening social divisions. Nothing counted above the equations.

And what is the conclusion?

And now? After Donald Trump, Brexit and Covid-19, it seems we are back at the beginning. Time to dust off Keynes’s general theory.

It does make me laugh. Donald Trump created the greatest economic upturn in American history but that remains completely invisible to these clowns. It would never occur to them to examine just what happened and why it might have worked. But the notion that Keynes and his General Theory have been absent from policy and need to be brought back may be the most stupid comment I have seen on economic theory and policy in a very long time.

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16 Responses to Economic clowns at every turn

  1. stackja says:

    If Keynes was the solution? Why is there still a problem?

  2. Judith Sloan says:

    Yep. Bizarre.

  3. Bruce of Newcastle says:

    The abiding sin threaded through it all was that of certitude. Perfectly plausible but untested theories, whether about the money supply, fiscal balances and debt levels, or market risk, were elevated to the level of irrefutable facts.

    This is so like the climate scientists. Two articles I saw today:

    Friday Funny: nature makes a mockery of month-ahead model forecasts. (19 Feb)

    Junk Grade Models: Even Short-Term Climate And Weather Modelers Get It All Wrong (19 Feb)

    In the first they predicted warm weather for Texas during February, based on their models. Three weeks later it’s the deepest freeze for a century in some parts. In the second the German climateers of Potsdam Institute predicted a weak la Nina using their “pioneering model”, only for the real world data to turn out much colder three months later. Both use models with erroneously large CO2 forcing.

    What I observe in economics and science these days is the players have all become lefty activists who Believe their pet theories with a religious fervor. They cannot accept anything which shows their heartfelt green-progressive icons are wrong, so they spend all their time tweaking models to justify their wishful thinking.

    But every now and then reality intrudes to show their ideology is foolish and wrong.

    You cannot build a civilization on fantasy and lies, which this stuff is.

  4. entropy says:

    It’s modelling in front of massive dual monitors in climate controlled offices on salaries immune to whatever is going on in the world outside that gets mistaken for the real world. They forget the assumptions can inadvertently drive the conclusion.

    But re Keynes. Just because it’s application hasn’t worked every time for the last eighty five years doesn’t mean it won’t work next time with the right people in charge. At the very least it will work for the right people.

  5. max says:

    Donald Trump created the greatest economic upturn in American history but that remains completely invisible to these clowns.

    sorry disagree, FED open spigot of fiat money and reduce interest to zero.

  6. harrys on the boat says:

    Sinclair Davidson is a university lecturer. He believed in Malcolm Turnbull.

  7. Ian of Brisbane says:

    Stimuli are popular because they are pork barrels with a respectable name.

  8. harrys on the boat says:

    Judith Sloan posted here last April how the complete lockdown of Australia was necessary to stop people in her age bracket getting a chesty cold.

  9. Paul says:

    But these clowns know exactly what Trump did and how. They are invested in Wall St not Main St.
    Trump cost them billions and they don’t want him out they want revenge.
    The sooner we can go back to building things for a profit the better, instead of playing risky business on the ponzis of Wall St.
    Big business is not a democracy it’s authoritarianism.
    Thats why they play with communist china

    Sundance at CTH raised an interesting prospect one time, the NSA spying on Americans can easily be turned to spying on wall St traders, insider trading.
    They can never lose.

  10. Kim says:

    Trump presided over the largest increment of public debt in history. He presided over the largest expansion of the “swamp” in history. He did more damage that any president in history. He promoted actions that led to the worst public health disaster in us history. He built a fake issue that enraged many Americans and then sent a gang of them to attack the Capitol. Qates eats every turd he floats down river.

  11. Bruce of Newcastle says:

    Kim seems to’ve spent his life in a jungle somewhere. Certainly has no idea of reality.

  12. Tom says:

    Qates eats every turd he floats down river.

    Nothing but the classiest trolls. Well done, your Doomlordship.

    Your troll swamp may smell smell like a Louisiana bayou after a spring hurricane, but low-IQ progressives know their own rules will never apply to them here on their dozens of daily drive-bys.

  13. Squirrel says:

    Following on from entropy’s apt comments, modelling – which we’ve heard so much about in this country since our federal Treasury got into it in a big way in the 90s – has much to answer for.

    It’s marvelous how modelling unfailingly produces results which support the world view of the people who commission it, and almost as often supports public policies which – lo and behold – neatly suit the personal circumstances of the typical salaried economist employed in a public or private sector bureaucracy, and others of their ilk.

    The crusade to replace stamp duty on property transactions with annual land taxes is a prime example of this. Likewise the enthusiasm for generous middle class welfare (particularly if it can in any way be justified on the grounds of workforce participation – one of Treasury’s holy Ps) – provided it is paid for by indirect taxes on other people.

  14. Lee says:

    Qates eats every turd he floats down river.

    Hilarious, coming from a lefty troll whose shtick is bullshit.
    And who can’t spell either.

  15. will says:

    max
    #3762066, posted on February 20, 2021 at 12:51 pm
    Donald Trump created the greatest economic upturn in American history but that remains completely invisible to these clowns.

    sorry disagree, FED open spigot of fiat money and reduce interest to zero.

    You appear to be misinformed. The endless deluge of fiat currency has been going on for some time, pushed by Congress and the idiot half Kenyan, and the money supply expanded by the same swamp. Donald John had very little control over these people. What he could control was the regulatory burden. Fortunately Congress agreed with some relief on tax.

  16. Mike Ryan says:

    Keynesian Economics is like climate alarmism. It doesn’t matter how many times the assumptions are challenged or proved fallacious, it’s rinse and repeat.
    Thatcher preferred Hayek.

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