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Ask HN: What are you reading to make sense of the economy?

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Re: Ask HN: What are you reading to make sense of the economy?

#181

Post by caseysoftware »

xenocratus wrote: post #166
jotakami wrote: post #154

Earlier quoted context omitted.

I believe this sentiment is mostly a symptom of the extreme prevalence of charlatans who use economics as a marketing tool rather than a social science. Economics is really just accounting, statistics and psychology. But mostly accounting. I think people get really worked up about the “unknowable” parts and fail to see that accounting can open up tremendous insights if we only take the time to understand it well. If…

After reading quite a lot about economic policies it sounds a lot like some sort of engineering - you have some levers/gadgets that you can use, but you have to understand the consequences of each of them and how the interact with the "real world" of companies and people participating in the economy. Sure, people being certain about what's going to happen and when is akin to snake oil, but using good insight and tool…

That's the Keynesian view where you can move a lever (cause) and measure the changes (effect).

Unfortunately, there are way too many variables, interactions, etc, etc to have any real confidence in those measures. It's further complicated by the idea that the normal tools (primarily interest rate & money supply delivered via subsidies, etc) are beyond their "normal" operating ranges.

When the Fed rate was 5% and loans were 8%, lowering rates encouraged borrowing. When the Fed rate is 0.25% and loans are 3-5%, qualified people can get all the money they want.. now what? Do they give money to people who can't pay it back (mortgage crash) or spend it on "shovel ready projects" which take 12-18 months to get started?

Alternatively, when consumer spending makes up 70%+ of the economy, consumer confidence is probably the single most important metric.

This is less engineering and more psychology at scale.

Re: Ask HN: What are you reading to make sense of the economy?

#182

Post by caseysoftware »

aqqTwxye wrote: post #90
DanielBMarkham wrote: post #57

Making sense in what fashion, to what end? Investment opportunities? Proposed public policy changes? Where to look for a job? To a large degree the economy is unknowable. That's why you can get two economists in a room and receive seven opinions. Don't get me wrong; there's good value there. It's just that economics is an odd mix of philosophy and math. On my more cranky days I call it astrology for people who know c…

Economists do not claim to know the economy, much less to the point of becoming rich. They are far more likely to insist that nobody can know such thing. You must be thinking of somebody else.

Distinguished Professor of Economics at the Graduate Center of the City University of New York and winner of the Nobel in Economic Sciences Paul Krugman would disagree with you. He's full of economic pronouncements going as far as when markets are going to crash (immediately) and their specific cause (Trump elected).

You can make the case that as a columnist, he's encouraged to make predictions but most Keynesians believe in direct cause -> effect of policy decisions based on a handful of metrics that properly describe the economy as a whole.

Re: Ask HN: What are you reading to make sense of the economy?

#184

Post by kiliantics »

skanderbm wrote: post #89

I would go through these three videos : - Ray Dalio for one view https://youtu.be/PHe0bXAIuk0 - Yanis Varoufakis for another https://youtu.be/zi-dXc0bKUM - Charles Mackay for an ancient, wise and entertaining read : https://youtu.be/FxgRbnh2ouE

+1 for Varoufakis, he has a very deep understanding of the system, having seen its ugly details very close up in the eurocrisis, and he has an excellent clarity in explaining it all

Re: Ask HN: What are you reading to make sense of the economy?

#186

Post by zie »

jazzyk wrote: post #168
passer_byer wrote: post #163

Consider a subscription to the British newspaper The Economist. It began publication in 1848 in protest against the British corn laws. The writing is superlative written with a rather sly sense of humor. In particular, they collect and graph enormous amounts of data to augment their articles. It's much better than random posts found on the internet.

Very well written indeed, unfortunately owned by globalists since 2015 (check out the ownership change, if you are interested [1]) I had been an avid reader for 30 years, cancelled my subscription around 2015-2016, and I was not even aware of the new ownership at the time, I just sensed the change of their ideological orientation and did not like it one bit. [1] https://en.wikipedia.org/wiki/Economist_Group

so where do we go now?

Re: Ask HN: What are you reading to make sense of the economy?

#187

Post by nicoburns »

oDot wrote: post #101
nicoburns wrote: post #100

Earlier quoted context omitted.

Agreed. Although one might note that those involved in wall-street are highly likely to be amongst those voting for conservative governments that are enacting these policies.

Both aisles, conservatives and leftists, support Cronyism with their actions. It was the Bush adminstration that came up with the plan the save Wall Street, and it was Obama's that passed that plan, in one form or another.

Agreed that cronyism is a problem across the political spectrum. Supporting cheap debt, and its use as a tool to prop up political support for otherwise uneven wealth distribution is something else though. Letting organisations like Wall Street pay for their stupid risks is one way of dealing with the problem. But IMO not particularly workable one due to all of the colateral damage it would inflict on ordinary people. We need to prevent this behaviour before it happens. That means making our economy less reliant on finance.

I would argue that there has been no truly left government in either the US or the UK (where I live) since Reagan/Thatcher introduced this style of economics in the 80s.

Re: Ask HN: What are you reading to make sense of the economy?

#189

Post by barrenko »

myth_buster wrote: post #124

Behavioral Economics - Thaler Kahneman Tversky et Al. If you are referencing to the fallout from covid, it's essentially the effect of global commerce coming to screeching halt. As CEO of GS said, no one has a clue on what's going to happen in Q2 and beyond, and if they say they do, they are BS'g. It's a Black swan event. Most forecasting models are ineffective. Whether it would be a V, U, L recession is anyone's gue…

It's NOT a black swan event.
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