Meanwhile, an enterprise with hundreds of trained economists (read: The Fed) used this magical unicorn training and prevented the Great Recesession from becoming the Great Depression II. All using economic theory. And if it wasn't for political interference/inaction, we'd be even further ahead, thanks to them.
I know people hate to hear that, and it's en vogue to rip on the field of economics, but it's true.
You're not exactly describing the difference. I would say that:
1. We have statistical evidence from large numbers of SIMILAR people with similar tumors. Economic events tend to be highly dissimilar in terms of context (Great Depression? 1988 Savings and Loans Crisis? 1997 Asian Financial Crisis? 2008 Global Financial Crisis?), and only to be similar in terms of before-and-after on some narrow set of parameters. This makes prediction and counter-factual history for economic stuff really hard.
2. We also understand some of the mechanisms of how tumors work and affect physiology. These are founded upon a large body of knowledge of causation and empirics in medicine, chemistry, and biology. Economics lack a comparably reliable and large body of knowledge because of 1.
>"We really have no idea what would have happened had the fed not intervened and allowed a normal bankruptcy to occur."
This is the fallacy: You really have no idea. That's not an insult. People who do this for a living, like, say, FRB economists, do know the consequences of letting bank runs occur and not providing liquidity during a crisis. It's well studied.
>" Economic events tend to be highly dissimilar in terms of context (Great Depression? 1988 Savings and Loans Crisis? 1997 Asian Financial Crisis? 2008 Global Financial Crisis?)"
I'm not sure this is true, either. Financial crises are surprisingly similar [0].
And we have statistical evidence from large numbers of economies. It's not perfect. We make a best guess and go for it. That's my point.
Contrary to popular belief, these guys aren't winging it. As I've said, go check out the research they're doing at the Fed. That's the cutting edge of economics.
You are using a straw man to defend the indefensible.
"These guys" are clearly winging it, when we remember the definition of "These guys":
Ideologues touting Efficient Markets and the Washington Consensus, often in the pay of corporations, and using clearly falsified theories to do so.
(You can get an idea of how bought they are by watching "Inside Job".)
No one is saying that no economists anywhere ever got anything right. The problem is that the economists who do get things right are the dissenters from the orthodoxy of "These guys".
So why don't you go check out the research referenced at
>"So why don't you go check out the research referenced at"
I read plenty of economic research, thank you. Every day. So, while I appreciate a link to a what is essentially the site of a pundit (whom I have read, by the way), this is not the bleeding edge of economics. When is the last time this guy actually wrote a paper?
>"As for the Fed, Volcker's Fed yes, Greenspan and Bernanke's Fed no."
Right. So, Volcker, dealing with intense inflationary pressure in the 1980s, and Bernanke, dealing with massive deflationary pressures in 2008, should use the same policy tools? I'm sorry, but you clearly need to brush up on the basics before you go attacking someone for their lack of economic knowledge. This is pointless.
I was referring to the Hudson book mentioned at the link, not Roberts's "punditry" as you call it.
Oh, and where did I say Volcker and Bernanke should use the same policy tools?
The big difference between Volcker and Greenspan is that Volcker stood up to congress, while Greenspan caved to the politicians and gave them the bubble they wanted. And politicized the Fed.
Or in your own words,
"And much of the housing portion was political mandate."
Did you not know this?
And where did I attack you for lack of economic knowledge?
I attacked you for using strawman arguments and putting words in peoples' mouths, and I stand by that.
>"If geeks weren't trading MBS and selling NInJA loans as AAA rated assets to the insurance companies"
I think you're conflating "people who work on Wall Street" with economists. Most of the "dirtiest" of the loan originators were people with no financial education whatsoever; salesmen, and nothing more.
>"If the Fed hadn't pumped easy credit, first during the dotcom bubble, then into the housing bubble, would the blowup have happened?"
Yes. Blowups happen. It's the business cycle. A credit driven economy inflates until marginal borrows default, which cascades to a deleveraging. The Fed "pumped" money in the economy after the dotcom bubble because we saw some of the greatest destruction of wealth, ever, during that period. And much of the housing portion was political mandate.
Admittedly, economics and the economy is a finicky patient. But contrary to popular belief, these guys are smart and know what they're doing.
>I think you're conflating "people who work on Wall Street" with economists. Most of the "dirtiest" of the loan originators were people with no financial education whatsoever; salesmen, and nothing more.
And I think you're conflating economists with people that didn't influence policy at the top level to enable those "salesmen" to do what they did, people that didn't hum along while the salesmen were doing it, people that didn't praise this thing happening, and people that didn't ensure the public that everything was perfectly OK before the crash.
Because economists, and top level ones at that, with Ivy League PhDs and all, did all of the above.
Case in point:
"""The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy. A long-time cheerleader for deregulation, Greenspan admitted to a congressional committee yesterday that he had been "partially wrong" in his hands-off approach towards the banking industry and that the credit crunch had left him in a state of shocked disbelief. "I have found a flaw," said Greenspan, referring to his economic philosophy."""
But all other top dog economists policy influences were doing the same things, and praising the same "throw caution to the wind" attitude towards the "free market" and unsupervised banking...
>"And I think you're conflating economists with people that didn't influence policy at the top level to enable those "salesmen" to do what they did"
Pray tell, what did they do? What options does the Fed have that can run opposite popular politics that wouldn't instantly cause them to lose independence?
>"people that didn't ensure the public that everything was perfectly OK before the crash"
This is simply not true. People, including academics, were writing about the housing market pressures as early as 2004. The "economists" can't force themselves onto MSNBC or CNN to tell people to stop buying houses, especially when that runs counter to what politicians want: a hot economy.
>"The former Federal Reserve chairman, Alan Greenspan, has conceded that the global financial crisis has exposed a "mistake" in the free market ideology which guided his 18-year stewardship of US monetary policy."
An old Randian, trying to ensure his legacy isn't completely tarnished. Hindsight is pretty easy.
>Meanwhile, an enterprise with hundreds of trained economists (read: The Fed) used this magical unicorn training and prevented the Great Recesession from becoming the Great Depression II.
Really? So where were these "hundreds of trained economists" when the Great Recession came about? Out there, causing it.
As for "being saved from becoming Great Depression II", well, let's wait and see.
>"Really? So where were these "hundreds of trained economists" when the Great Recession came about? Out there, causing it."
Causing it? That's preposterous, being as how the borrowers (ie, Joe Public) are 50% to blame for over extending themselves. Again, tell me what tools the FRB has at its disposal that could have prevented the housing meltdown.
>"As for "being saved from becoming Great Depression II", well, let's wait and see."
Indeed we shall. Care to put your money where your mouth is? I have, and continue to do so, participating in one of the biggest bull-market run-ups in history the past two years. Meanwhile, most people continue to spout doom and gloom. And I'm just some guy watching this happen from the sidelines, trying to piece it all together.
I know people hate to hear that, and it's en vogue to rip on the field of economics, but it's true.