Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935? • Hacker News Board

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#111

Post by Retric » Tue, Apr 04, 2017, 6:21 PM UTC

random_comment wrote: post #106

Retric wrote: post #105

Earlier quoted context omitted.

A coin flip with 50/50 odds is understandable even without predictions.

This is a technicality / edge case of 'pure randomness', rather than a rebuttal. Furthermore, I can predict the distribution of results for a coin quite accurately over long time timeframes. Indeed being the 'understanding' of a successful gambler means being able to make predictions about what will happen with a random process over time. Roulette for example is analogous to the coin toss; most casinos seem extremely…

You can model a coin flip you can't predict it. Next year the US GDP with be the same +/- 50%. That's been true for the last 200+ years, further there is positive bias so it's more likely to be + than -, but the down tail is thicker so it's more likely to be down 9% than up 9%.

Similarly casinos will sometimes lose lot's of money on Roulette when someone makes a big bet. But, the their long term average is positive money maker. Further, they don't pick specific returns just a range with some probability aka more than X not 10,203,556$.

What you want is a prediction for next year, not a model for next year.

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#112

Post by Retric » Tue, Apr 04, 2017, 6:46 PM UTC

zigzigzag wrote: post #97

TheOtherHobbes wrote: post #38

Earlier quoted context omitted.

Plenty of people I know were predicting the crash of 2008 at least a year out - sometimes more. Fortunately, none of them were qualified economists. Macro is actually pretty straightforward to do. But economics is politics by other means. It is not a science - it's a branch of rhetoric and persuasion (i.e. propaganda) and is used to disguise and rationalise purely political decisions that would otherwise be impossibl…

Indeed. Take Brexit. Government economists stated as fact that there would be 400,000 job losses following a vote to leave (note: the vote, not actually leaving itself). Absolute bloodbath. Reality: the economy grew. Everyone knows economists say what they're paid to say, which is why they're so often ignored. Oddly, the people who tend to understand that best are often the ones derided as the "uneducated" voters and…

If you want to find an economist to support some statement that's easy, but does not mean that it's actually what most economists actually believe.

It's like saying 4/5 Dentists recommend X by asking them if it's better to brush with crest or not brush at all. Or pay some group of 5 dentists that work for you and ask a more neutral question.

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#113

Post by dragonwriter » Tue, Apr 04, 2017, 9:33 PM UTC

hl5 wrote: post #83

AnimalMuppet wrote: post #51

Earlier quoted context omitted.

Yes millions lost their jobs, houses, and business. And yes it was a minor blip. If you think otherwise, you don't grasp how bad the Great Depression was. Think about 35% unemployment for years . The majority of mainstream economists didn't see it coming. That's a totally valid criticism. But they did a much better job of handling it than in 1929, and the damage, while major, was still nothing like the Great Depressi…

I see your 42 million unemployed people in 1929 and raise you 100 million people not currently looking for work in 2017.

A lot of those 100 million are elderly, children, or permanently disabled. There's a reason we count unemployed in a different manner than just "not currently looking for work."

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#114

Post by [deleted] » Wed, Apr 05, 2017, 10:56 PM UTC

dragonwriter wrote: post #113

hl5 wrote: post #83

Earlier quoted context omitted.

I see your 42 million unemployed people in 1929 and raise you 100 million people not currently looking for work in 2017.

A lot of those 100 million are elderly, children, or permanently disabled. There's a reason we count unemployed in a different manner than just "not currently looking for work."

[deleted]

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#115

Post by [deleted] » Wed, Apr 05, 2017, 10:57 PM UTC

dragonwriter wrote: post #113

hl5 wrote: post #83

Earlier quoted context omitted.

I see your 42 million unemployed people in 1929 and raise you 100 million people not currently looking for work in 2017.

A lot of those 100 million are elderly, children, or permanently disabled. There's a reason we count unemployed in a different manner than just "not currently looking for work."

[deleted]

Re: Why Were Economists as a Group as Useless Over 2010-2014 as Over 1929-1935?

#116

Post by josephlord » Thu, Apr 13, 2017, 2:13 AM UTC

Gibbon1 wrote: post #76

josephlord wrote: post #30

Earlier quoted context omitted.

Firstly there are two ways that money is printed. 1) Government/central bank spend more than they take in taxes. 2) Private banks make loans to private sector (biz or individuals). Money is destroyed by government running a surplus or by loans being repaid. Note also that for the government to run a surplus the private sector must run a deficit (decrease savings or increase borrowing) in most circumstances. The quest…

Money-Debt also expires via bankruptcy and gets eaten away via inflation.

Bankruptcy is actually the way to reduce debt without destroying the matching money (but may have knock on effects on further lending and related money creation).

Inflation is less clear cut and comes in many forms, assets, import costs, wages, consumer goods.