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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?

#91

Post by oDot »

nicoburns wrote: post #59
oDot wrote: post #19

The only school that has any explanation for this is the Austrian School of Economics. Their theory of the business cycle is the reason they successfully predict every crisis to the tee (except for timing, no one can do that), while other economists are just blown away in surprise that it even happened. Mises and Hayek wrote big and hard to read books about it, but two that explain this to the layman are "Meltdown" b…

The best theory I've seen for crash cycles is: 1. The establishment encourages making credit widely available in order to pacify the less well off who would otherwise demand a better deal out of the social contract. 2. This leads to unsustainable debt, as people are forced into borrowing to meet basic needs with no means to pay it back. 3. Eventually this comes to a head as people begin to default, causes a cascading…

The establishment you describe in step 1 is the government. Wall street could not do what they do now without government involvement. They will run out of money, and have to suffer the losses of the bad loans they make, instead of relying on the Fed to save them by depreciating the money of regular working people.

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

#94

Post by texasbigdata »

axegon_ wrote: post #87

Currently nothing, ran out of books to read and amazon is taking forever to ship them, despite the hefty shipping fee I paid(currently two weeks from Austria to Bulgaria which is just over 1000 km away)... Rant aside, all of Nassim Nicholas Taleb's books are a very good choice for anyone that hasn't read them.

Kindle?

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

#95

Post by tomrod »

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…

Economist here. Mostly agree with this sentiment.

I listened to the National Association of Business Economists webinar yesterday presenting survey expectations for Q2. To say there was difference in opinions is an understatement. Opinion ranged from barely any impact to 50% GDP loss (annualized, so 1/4 of that for a quarter).

You hear economists say things like "guns and butter do well in recessions." The same idea applies here: what do people need during this time? That is what creates the market.

Outside of that, my only thought is don't pay attention to the short run volatility of the stock market as an indicator for long run economic outcomes.

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

#96

Post by alexilliamson »

BaronSamedi wrote: post #68
DyslexicAtheist wrote: post #15

Nassim N. Taleb, author of BlackSwan books. His thinking about risk/probability is timeless. Frequently publishes links to his papers and debunks the BS-peddlers on his twitter: https://twitter.com/nntaleb

I liked Taleb's "The Black Swan" but find his Twitter persona grating. He displays an attitude of, "anyone who doesn't agree with me is dumb". I think the opposite is needed now. Complex and difficult issues are better approached with humility, and a frank and open discussion of uncertainty.

There was a particularly childish fight between Taleb and Nate Silver about a year ago on Twitter. I couldn't stand following either of them after that and I haven't looked back.

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

#97

Post by nicoburns »

Scea91 wrote: post #84
nicoburns wrote: post #59

Earlier quoted context omitted.

The best theory I've seen for crash cycles is: 1. The establishment encourages making credit widely available in order to pacify the less well off who would otherwise demand a better deal out of the social contract. 2. This leads to unsustainable debt, as people are forced into borrowing to meet basic needs with no means to pay it back. 3. Eventually this comes to a head as people begin to default, causes a cascading…

> 2. This leads to unsustainable debt, as people are forced into borrowing to meet basic needs with no means to pay it back. People borrow for much more than basic needs and they do so voluntarily without anyone forcing them. This does not substantially affect your logic, but I think lots of the blame for mismanaging debt lies at the people in debt themselves.

Hmm... they do, but this is actively incentivised with low interest rates, which directly inventivise borrowing, and also have secondary effects, such as easily available mortgages leading to increased house prices, which leads to further borrowing.

You can also see this in student loans. Sure, people volutarily choose to take them out. But this is because they live in a society where access to a lot of jobs is gated on having a degree, and degrees are so expensive that a loan is the only option more often than not.

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

#99

Post by ianleeclark »

Scea91 wrote: post #84
nicoburns wrote: post #59

Earlier quoted context omitted.

The best theory I've seen for crash cycles is: 1. The establishment encourages making credit widely available in order to pacify the less well off who would otherwise demand a better deal out of the social contract. 2. This leads to unsustainable debt, as people are forced into borrowing to meet basic needs with no means to pay it back. 3. Eventually this comes to a head as people begin to default, causes a cascading…

> 2. This leads to unsustainable debt, as people are forced into borrowing to meet basic needs with no means to pay it back. People borrow for much more than basic needs and they do so voluntarily without anyone forcing them. This does not substantially affect your logic, but I think lots of the blame for mismanaging debt lies at the people in debt themselves.

> People borrow for much more than basic needs and they do so voluntarily without anyone forcing them.

People can be forced without there being an "anyone" to do the forcing. Being underemployed in some expensive city, unable to make your next car payment that you need to get to your job doesn't require an "anyone" to force that person into a loan at gunpoint. They're still being coerced into that decision, even if there isn't an "anyone."

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

#100

Post by nicoburns »

oDot wrote: post #91
nicoburns wrote: post #59

Earlier quoted context omitted.

The best theory I've seen for crash cycles is: 1. The establishment encourages making credit widely available in order to pacify the less well off who would otherwise demand a better deal out of the social contract. 2. This leads to unsustainable debt, as people are forced into borrowing to meet basic needs with no means to pay it back. 3. Eventually this comes to a head as people begin to default, causes a cascading…

The establishment you describe in step 1 is the government. Wall street could not do what they do now without government involvement. They will run out of money, and have to suffer the losses of the bad loans they make, instead of relying on the Fed to save them by depreciating the money of regular working people.

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.
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