Economists versus the Economy - the-enemy https://www.project-syndicate.org/commentary/mathematical-economics-training-too-narrow-by-robert-skidelsky-2016-12 <comment><AUTHOR> > Economists claim to make precise what is vague, and are convinced that > economics is superior to all other disciplines, because the objectivity of > money enables it to measure historical forces exactly, rather than > approximately.

Economist here. Maybe some economists make this very bold, presumptive claim. But I'll be honest, money very rarely enters into the paradigm; rather resource allocation and maximizing utility are the common approach. But then again, I didn't focus solely on financial economics.

The draw for me wasn't mathematical complexity, it was the ability to model behavioral interactions I witnessed on a daily basis. And I'll be honest--it is so much fun! The conception, the data collection, the validation of theory.

Anyhow, I now work as a data scientist where I use the theories of economics and the methods of econometrics (especially game theory considerations) to really move the ball on our strategy and our marketing. I enjoy the process a lot and love seeing economists entering the field. Statisticians and economists make a potent combination.

<comment><USER2> >resource allocation and maximizing utility are the common approach.

Utility maximisation has always struck me as a horrible way to do modelling. In most cases your results must depend heavily on the form of utility function you choose. And you always have to make a choice since utility functions are unobservable.

<comment><USER3> I guess the follow up question to this is: what superior alternative do you propose we use for evaluating competing government policies?

<comment><USER4> I don't think we should ditch "utility" entirely but rather the idea people are actors that try to rationally maximize utility.

One problem is of uncertainty (this was pointed out by Keynes) - people simply do not trade higher risk for higher profits, even if the mean value increases in the mathematical sense. Rather, they set a horizon of uncertainty.

The other big problem is that utility is ill-defined for an individual. We are competitive beings and value many things for reasons that are related to how other people value them. This cannot be modeled within the theory of rational choice. (It's also somewhat related to the fact that supply-demand is not that great model.)

In other words, we should augment the models to take the above issues (at least, IMHO those are the biggest problems but certainly not the only ones) into consideration.

<comment><USER3> I agree.

I think at this point even the most conventional academic economist would start giving you sideways glances if you asserted that people are always rational utility maximisers. It seems that most econometric modelling takes a top-down approach; implicitly making homogenising assumptions about the models 'atoms' (e.g. individuals, firms, states, countries etc.).

I often wonder if the future of economic modelling is to be found in 'agent- based' models, where you start at the lowest level and aggregate up. This approach makes it possible to account for the effects of non-homogeneous actors and to also include 'non-rational' behaviours observed in experimental/behavioural economics.

I feel that the other issue is how beginner-level economics is taught at university. I would agree that there's no practical way to teach economics to beginners without making a bunch of simplifying assumptions and presenting a bunch of simplified models for study (e.g. a perfectly competitive market). However, I think the problem is that insufficient effort (if any) is made to emphasise that these models do not really reflect reality, and are just 'toy models' to help you develop your analytical thinking.

At best, in a real world context, understanding these models gives you an analytical framework for reasoning about whether some policy proposal is pointing in the right or wrong direction, though even that is a pretty fraught assertion.

EDIT: I figured I'd address some of the comments below regarding randomised- controlled trials, since its related to agent-based modelling / simulation. Comments below have pretty much highlighted the crux of the problem with economics and public policy (albeit without comprehending the implications): barring the rare 'natural experiment', its virtually impossible to collect 'clean' data that allows comparison of different policies. It's true that RCTs are being run in a 'public-administration' context, and the idea is gaining popularity. Most notably, the UK government has run a bunch of RCTs on various things.

But the crucial thing to note is that these RCTs are generally only run for 'low-stakes' issues. For instance, one of their RCTs involved varying the wording of their tax authority's "you haven't submitted a tax return" letter to determine what gets the highest compliance rate.

How comfortable, from an ethical standpoint, would you feel running state-by- state RCTs to determine the best government healthcare policy? Particularly given that the outcome in some states will be higher levels of preventable death and permanent disability? I've chosen healthcare here because the connection between different policies and higher or lower rates of mortality is fairly direct. But for any other government policy (of any significance), you're generally looking at the same sort of stakes. It's just that the ultimate ill-effects of a bad policy are not immediately apparent, take a long time to unfold, and often only eventuate at the margins.

</comment></comment></comment></comment></comment><comment><USER5> There's a big difference between the economic topics that get the most media attention, and areas in which the majority of economists work.

I studied economics for 4 years and now work as an economist. I've never met a colleague/teacher who claimed to be able to forecast inflation/GDP growth over the next four quarters or correctly identify miss-priced assets.

Some examples of the questions I have seen economists address:

      - How much might labour supply change following a change in tax policy?

      - What is the impact of online advertising through different channels on a company's incremental sales?

      - How would a merger between two companies affect the price and quality of their output?

      - How can you detect collusion between bidders in tender markets?

A lot of the work seemed convincing to me, and lead to insights beyond the common sense intuition of politicians/businessmen who were familiar with the domain.

Even if you think economists aren't helpful for predicting inflation/GDP growth or identifying miss-priced assets (I'm inclined to agree), there are lots of important questions about market dynamics and policy evaluation where economics does give us genuine insight. I also find it really fun!

<comment><AUTHOR> There are a few professional forecasters out there. Everyone wants to read the tea leaves.

</comment></comment><comment><USER6> Can anyone lend insight into whether any of the following really hold any merit?

1) Economists have a structural imperative not to publish their most meaningful studies. In short, if you find an accurate model for something, there's a good chance you can make more privately than via publishing.

2) The lack of a professional body for economists leaves open to corruption. Like the Dean of Columbia's Economics school writing a report praising Iceland's market reforms prior to 2008, at the behest of Iceland's Chamber of Commerce.

3) Economics jobs tend to fall into 2 broad categories. Either you're working for wallstreet analyzing markets, which are, in fact, very free ideal markets that lend themselves to the mathematical model... or you're working for a think tank, which almost certainly has an ideological bias.

<comment><USER7> Re (2): Glenn Hubbard (the dean you mention) has a relatively long history (depending on who you ask, of course) of having dubious ideas on economics. For example: [http://krugman.blogs.nytimes.com/2012/08/10/culture-of- fraud...](http://krugman.blogs.nytimes.com/2012/08/10/culture-of-fraud/), Krugman's blog has lots of examples.

So in that context, writing a report "at the behest of Iceland's Chamber of Commerce" is pretty small potatoes. It's far more likely that they commissioned a report knowing Hubbard's own views in advance, which makes it dodgy as hell, but not quite corruption. And in any case, many of those arguments about market reforms and deregulation really ought to be assessed on merits (which are objectively poor), with who's paying for them being more of a side note. It's also arguable that a professional body would not solve these kinds of problems. It'd be hard to build an argument against a profession by focussing on just one hack.

Re (1): taking an economics model and pushing it to production involves a genuinely considerable amount of work. "Make more privately" would mean something along the lines of getting hired by a hedge fund as consultant. There are also other incentives involved: first, academia generally urges people to publish. Second, having a model be published is part of the way it is accepted by practitioners too: if you just come up with a random model, it would have to be insanely good to convince anyone to put their money behind it, otherwise they'll _require_ you to get other people to assess it, and you'll have to publish it in a peer-reviewed journal. The exception would be really specialized models, where you think you found an arbitrage opportunity or something (even then it's not completely clear, see, e.g., the literature on selling deep out-of-money puts).

<comment><USER8> 1) Historically Keynes is certainly known for profiting on foreign exchange bets, Irving Fisher on the other hand is notorious for predicting multiple times that the recovery of the 1929 crash was about to begin - and his funds followed his predictions into oblivion.

2) It was Fredrik Mishkin - and he was paid well over $100,000 for it.

[https://www.utanrikisraduneyti.is/media/Raedurogerindi/Finan...](https://www.utanrikisraduneyti.is/media/Raedurogerindi/Financial_Stability_in_Iceland.pdf)

This is the report, and it's worth reading because it encapsulates just about everything that is wrong with macro-economics, from theory to corruption. Understand that all anybody had to do at the time to understand how badly off the rails the Icelandic Banks were was to look at their balance sheets in their annual reports.

<comment><USER6> So in most science, if someone comes out with a study saying that (say, for example) climate change isn't real, they'll be buried under the remaining 99% that came to consensus in the other direction.

Sure, Industry will bankroll lobbyists to fight any potential change in government, and fund crackpot theories, but ultimately, the evidence that will accrue will be damning.

Why wasn't that the case for Iceland? Why doesn't that happen more for economics as a whole?

Is it a function of time? In economics, people are more focused on sub 10 year plot lines? Perhaps our understanding of macroeconomics is so poor that we're surprised by "big changes" every few years, and evidence doesn't get a chance to accrue? Whereas evidence for climate change can accrue year after year?

</comment></comment></comment></comment><comment><USER9> Paul Krugman's brief rebuttal may be relevant:

[http://krugman.blogs.nytimes.com/2016/12/24/dont-blame- macro...](http://krugman.blogs.nytimes.com/2016/12/24/dont-blame- macroeconomics-wonkish-and-petty/)

<comment><USER10> >But his prime examples of economics malfeasance are, well, terrible:

>Policymakers don't know what to do. They press the usual (and unusual) levers and nothing happens. Quantitative easing was supposed to bring inflation "back to target." It didn't. Fiscal contraction was supposed to restore confidence. It didn't.

>"Supposed to" according to whom? Not basic macroeconomics!

>Look, we had a more or less standard model of macroeconomics when interest rates are near zero — IS-LM in some form. This model said and says that (a) monetary policy is ineffective under these conditions (b) fiscal multipliers are positive and large — in particular, fiscal contraction is strongly contractionary. And these predictions have been borne out! Huge monetary expansion didn't raise inflation; extreme austerity was strongly correlated with severe economic downturns.

>In other words, policy had exactly the effects it was "supposed to."

Krugman actually used his ISLM model to decide to remortgage his house in 2003, and in a bout of epic predictive failure, foresaw skyrocketing interest rates:

[http://www.nytimes.com/2003/03/11/opinion/a-fiscal-train- wre...](http://www.nytimes.com/2003/03/11/opinion/a-fiscal-train-wreck.html)

"With war looming, it's time to be prepared. So last week I switched to a fixed-rate mortgage. It means higher monthly payments, but I'm terrified about what will happen to interest rates once financial markets wake up to the implications of skyrocketing budget deficits."

Whoops

<comment><USER11> > Whoops

According to the data, not really. Short-term mortgage rates increased steadily for the next several years; long-term rates also ticked up, but not by as much.

He basically refinanced his home _exactly_ at the bottom [1].

[1] [http://www.bankrate.com/finance/mortgage-rates- history-0112....](http://www.bankrate.com/finance/mortgage-rates- history-0112.aspx)

<comment><USER10> I think we need to change the scales and put it in context:

[http://mortgage-x.com/images/graph/fhfb_contract_rate.gif](http://mortgage-x.com/images/graph/fhfb_contract_rate.gif)

According to the data, yes really.

<comment><USER12> Your graph shows the same as the one from smallnamespace: 2003 was a good year to refinance because rates were at a bottom.

<comment><USER10> Krugman's bet - in his own words and using ISLM - was that interest rates would skyrocket because of deficit spending on the Iraq war in 2003. He paid extra to make this bet.

Where on that graph did rates skyrocket exactly?

<comment><USER12> From the article: "And as that temptation becomes obvious, interest rates will soar. _It won 't happen right away._ With the economy stalling and the stock market plunging, short-term rates are probably headed down, not up, in the next few months, and mortgage rates may not have hit bottom yet. But _unless we slide into Japanese-style deflation_ , there are much higher interest rates in our future." (emphasis mine)

That's pretty much what happened:

[http://www.gridgit.com/postpic/2011/09/us-inflation-rate- his...](http://www.gridgit.com/postpic/2011/09/us-inflation-rate-historical- chart_259737.png)

Inflation doubled from 2002 onwards, then the housing bubble popped, causing inflation to fall. Thankfully not into a long-term deflationary spiral, though.

<comment><USER10> "unless we slide into Japanese-style deflation"

Yeah, that was the best part. "This is going to be awful. It's going to happen. Unless, that is, the exact opposite of what I'm betting on happening actually happens".

</comment></comment></comment></comment></comment></comment></comment></comment><comment><USER13> I'm not sure if this article brings up anything new but it fans my crisis of epistemology all the same.

I've always been a good "the academics know what they're talking about" believer, but lately I've started having doubts.

I went to MIT and many of my good friends and peers went onto PhDs in the hard sciences (Princeton/CERN, Harvard CfA, CalTech chemistry) so I've always been impressed, almost reverential, towards them and the discoveries of their fields.

But as we branch away from physics, astronomy, chemistry, what I used to almost take on faith I'm now growing doubtful about. This excellent blog post[0] by Columbia statistics Professor paints the state of modern Psychology research unflatteringly. And then there's this post[1] looking at a parallel universe of scientists studying, peer reviewing, and publishing (in their own journals) parapsychology (being "psychic" and all that). I'd call it "cargo cult" science, but at much more than a superficial level it resembles many "real" scientific disciplines in terms of meta analyses, p-values, etc. I personally majored in Math and Econ, and for my Econ classes I did my fair share of modeling and teasing out effects from their confounding variables, etc, and was always a little leery about it all. It doesn't really surprise me that the Fed has written that Economics, too, is suffering a replication crisis[2].

But then how far does it go, and where do I go from here? I don't have the time or inclination to study to an expert level all these soft science fields and form my own opinions. What fields are as sturdy as particle physics? Medicine? Biology? Climate change? It's a slippery slope to anti- intellectualism but I feel myself slipping.

[0] [http://andrewgelman.com/2016/09/21/what-has-happened-down- he...](http://andrewgelman.com/2016/09/21/what-has-happened-down-here-is-the- winds-have-changed/)

[1] [http://slatestarcodex.com/2014/04/28/the-control-group-is- ou...](http://slatestarcodex.com/2014/04/28/the-control-group-is-out-of- control/)

[2] [https://www.federalreserve.gov/econresdata/feds/2015/files/2...](https://www.federalreserve.gov/econresdata/feds/2015/files/2015083pap.pdf)

<comment><USER14> I think Economics is a fairly big outlier though. There's quite a good book by Economics Prof. Steve Keen called Debunking Economics, which is very accessible and goes over how most of the core tenants of neoclassical (mainstream) economics have been known to be flawed for decades, yet it's all still taught as fact.

It's not a scholarly work, but references a great deal of scholarly work.

It's fascinating to read and imagine how the profession has not been reformed in light of these known flaws (and the fact of the huge failure of mainstream Economics to predict the Great Recession).

There is some hope though in some student movements that are starting to challenge how economics is taught (like Rethinking Economics and the Post- crash Economics Society). It may be that like some times in science, the profession will advance "one funeral at a time" as the new generation comes in.

<comment><USER15> Neoclassical synthesis is still taught because, even though it's flawed, we have nothing better. Economists know that the assumptions behind neoclassical models aren't always fulfilled.

All science is always done with models and we just use the best models we have, while taking into account their limitations. People don't usually object to this in other fields, but in economics they do because they have stronger Opinions about economics than the natural sciences and the models sometimes disagree with their Opinions. If they had a better model, economists would welcome it, I'm sure, but they don't and they still want to keep their Opinions, so instead they blabber about how the current models are flawed. They're not wrong.

The Marxian school is a dead end and the Austrian school lacks scientific rigor. There's no point in teaching along with neoclassical synthesis things that are less rigorous than neoclassical synthesis while also having less breadth. If they were taught, the situation would be similar to what it is in psychology, where dubious approaches like psychoanalysis are taught alongside cognitive psychology.

<comment><USER16> This is a commonly held belief, but it's wrong, the dominant economic models in use today are neither rigorous (internally inconsistent, extremely poor empirical verification, major aggregation errors, lack of essential inputs) nor representative of an economy (a dynamic system, not an extremely stylized static equillibrium model). You should read Keen's book, it's point is not that those assumptions don't always hold, it's that they under _any_ real world circumstance will invalidate themselves.

</comment></comment></comment></comment><comment><USER17> There are two bits of premise I think that are unfair in the article:

1) 'Economists don't know what is going on'. Yes, they do know what is 'going on'. They can measure it, and tell you.

The sneaky assumption in the question is the assumption that if "they knew what was gong on, then they would know how to solve it"

This is totally unfair.

Jobs and the economy were never entirely managed through centralized economic policy. Unless you are a country that is 'way behind others that are good examples to follow' \- in which case you can make no-brainer investments in 'roads' and 'electricity' ... it's otherwise not possible.

No 'economist' would have ever thought 'we need a good search engine' or 'someone needs to re-jigger electric cars to make them work in our economy' etc. etc..

It takes entrepreneurs of various sorts - mostly of the 'boring' kind (carpenters, contractors, restaurant owners, parts manufacturers) etc. to form the basis of the economy. It's not and never will be managed by economists.

2) The failure of 2008 was not predicted by economists ergo their discipline is bunk.

This is not fair either. 100% of economists would have predicted the outcome if they knew the vast scope of homeowners lying on their applications, that banks were misleading others by packaging crap loans as good ones, that the ratings agencies were not doing their jobs and actually rating the loans properly.

Economists depend on 'valid data' in their understanding of the world. Were the data in 2008 to have been valid, predicting the outcome would have been trivial.

You could argue that Economists might need a different approach, i.e. to be more 'in the field' doing their own measurements - sure. But their models were not wrong, their data was.

<comment><USER18> >This is not fair either. 100% of economists would have predicted the outcome if they knew the vast scope of homeowners lying on their applications, that banks were misleading others by packaging crap loans as good ones, that the ratings agencies were not doing their jobs and actually rating the loans properly.

It was very widely reported at the time that banks had drastically lowered their standards for loans, and that this had lead to a boom in housing prices. And all this was publicaly defended by conservative politicians and commentators. And it takes only a little thought to figure out the banks were misleading investors, and the bond rating agencies were helping them out. The reason the economists didn't figure it out is they lack the needed common sense.

</comment></comment><comment><USER19> >Policymakers don't know what to do. They press the usual (and unusual) levers and nothing happens.

That's not really true if they're _refusing_ to push the Keynesian levers for ideological reasons.

<comment><USER20> _That 's not really true if they're refusing to push the Keynesian levers for ideological reasons._

 _snort_ Everyone's a Keynesian when it's time to spend but Keynes also said to pay down your debts on the upswing of the cycle, and guess what everyone didn't do?

<comment><USER19> Well, I was a teenager before the housing bubble went bust, but I'm just fine with paying higher taxes in boom times. Don't snort at me: raise my taxes! It's what I'm already voting for. Tax _me_ and my high-tech salary. It can pay for schools and trains in my own community, it can pay down the national debt, etc. Redistribute _my_ wealth, because I'm _exceptionally_ well-off for my age group.

<comment><USER21> Why not just make voluntary contributions to organizations you support? Governmental or otherwise. Why wait for someone to take it from you when you could give it instead?

<comment><USER19> I already do that. I spend more money on _each_ organization I support each month than I do on cable internet.

<comment><USER21> So then are there just no organizations other than government that can get done what you want? Why advocate for higher taxes rather than upping your voluntary contributions?

I just listened to this [0] Sam Harris podcast episode yesterday so it's kind of on my mind, though this is admittedly a tangential issue to the podcast.

[0]: [https://www.youtube.com/watch?v=PxStuUxaZxQ&t=4171s](https://www.youtube.com/watch?v=PxStuUxaZxQ&t=4171s)

</comment></comment></comment></comment></comment></comment><comment><USER22> I don't agree with everything Skidelsky (the author) writes, but his main point rings true:

 _" Today's professional economists... have studied almost nothing but economics. They don't even read the classics of their own discipline. Economic history comes, if at all, from data sets. Philosophy, which could teach them about the limits of the economic method, is a closed book. Mathematics, demanding and seductive, has monopolized their mental horizons. The economists are the idiots savants of our time."_

In other words, they lack what Charlie Munger calls "elementary worldly wisdom:" [https://old.ycombinator.com/munger.html](https://old.ycombinator.com/munger.html).

<comment><USER18> I think the very unfortunate narrowness of economics has partly to do with its history. Economics got going before any of the other social sciences and also ecological science, and early on had an enormous practical success with the development of free market theory, and so got the mistaken idea that it could proceed just fine without these other sciences.

Another problem is that economics is very closely connected to political policies, so it is very vulnerable to ideological influences.

</comment></comment><comment><USER23> > But no branch of human inquiry has cut itself off from the whole – and from > the other social sciences – more than economics.

In Bratislava, the town I come from, there's Comenius University which has many faculties, one of them being Philosohical Faculty. Among many departments in Philosophical Faculty there's a department of sociology.

There is also a fully separate Economics University, with its own faculties and departments.

It's a nice example of how the fact that economics is just one of many subdisciplines of sociology is concealed and instead, an impression is created that economics can exists as a fully separate discipline independent of any sociological factors.

</comment><comment><USER24> There were plenty of economists that warned of the bubble well before it popped but they were routinely ridiculed and dismissed since explaining themselves took longer than a 15 second slot between questions on a news show.

<comment><USER25> The fact that so many of them failed to recognize the popping even after it popped (Ben Bernanke among them) pretty much tells us everything we need to know.

</comment></comment><comment><USER26> Let's assume an actual prophet knew what was going to happen in response to government policies 2, 4, 8 years from now and let that be known. People still have freewill. People will react to the prophet's words and thereby probably change reality. I'm assuming the prophet was an actual prophet for the sake of argument - he/she knew what was going to happen if people didn't react to his prognostication. But of course people have freewill and are free to change and they do. That's the problem with all economic forecasts. It truly doesn't matter how good or bad they are - people can and will change in response if the forecast gets enough eyes.

That's a small example of what goes on daily in the world of economics and the global, financial markets. When the Fed makes a decision that later doesn't work out a valid explanation is, always, 'things changed'.

</comment><comment><USER27> I'm familiar with work in he philosophy of science. Is there a growing interest with he philosophy of economics?

<comment><USER28> Philosophy is a soft science, so I'm gonna guess "not on your life."

<comment><USER29> Philosophy is not a science at all, it's the mother of all science and it fits firmly within the humanities. The philosophy of economics is what we now call 'economics' except they've abandoned philosophy. Karl Marx is a philosopher and was an economist until the current neoliberal econ regime wrote him out of all the textbooks and retroactively reclassified him so they didn't have to think about his ideas or those of his followers.

</comment></comment></comment><comment><USER30> > how to estimate the costs of a project properly – ought to be of interest to > most people. In fact, the field repels all but connoisseurs of fanciful > formal models.

Considering how bad humans are at planning most mid/large sized projects (let alone small ones), how much faith can we put into centralized planning on a large macro national scale?

Wouldn't the US be better off managing their local economies more directly? With differing assistance from the federal level. Rather than attempting to apply a model across a huge diverse national economy?

I feel like Canada (where I'm from) was much more capable at dealing with the crisis because we had a small more cohesive system and our localized issues are easily dealt with. I feel that starts to break down at a larger scale.

It would also make politics more predictable and less partisan where you don't have an economically 'forgotten' class of people disrupting national elections with protest votes.

The US was founded on federalist ideas and it seems it's decline from economic greatness (at least towards stagnant growth) has coincided with a divergence from those ideas to a top heavy centralized government, where the election of the president has grown to consume 90% of people's attention while only 10% as much is given to their congress, governors, state legislators, etc. A whole country complaining about 'Washington elites' as if it were a simple managerial issue for the next executive to solve rather than the result of a systemic shift in power toward the executive and federal governments that has gone unchallenged. Not to mention they seem to increasingly be given all the blame/praise for whether the economy functions well or not.

<comment><USER17> "I feel like Canada (where I'm from) was much more capable at dealing with the crisis because we had a small more cohesive system and our localized issues are easily dealt with. I feel that starts to break down at a larger scale."

In Canada (where I'm from as well) - we definitely are not an more sophisticated than anywhere.

Though your point about being 'smaller' I think is valid.

We are simply very conservative, behaviourally. We generally have stricter rules about most things, our finance execs aren't as aggressive, people are much less likely to lie on application forms.

We don't 'innovate' with finance, i.e. 'finding new ways to package crap mortgages to sell them as good' \- that's an Anglo/American thing :)

America is the 'land of the free' Canada has always been about 'order, stability and peaceful coexistence' \- so it's a cultural thing that exhibits itself systematically.

I should say one thing: we do have a wicked housing bubble in Toronto, and economists have been predicting demise for years, and it could very well happen if foreign buyers lose the ability to spend. A 'Chinese crash' combined with slightly higher interest rates - would put Toronto in a really, really dire situation. And we we can't blame economists for that one - the risks are clear.

<comment><USER30> > A 'Chinese crash' combined with slightly higher interest rates - would put > Toronto in a really, really dire situation. And we we can't blame economists > for that one - the risks are clear.

Agreed, I personally hope it results in a new common sense that housing is not the perfect silver bullet investment for everyone. And hopefully it results in more capital going to entrepreneurship and business, rather than 90% of people betting on stable corporate jobs and mortgage payments for their future financial independence.

There are always economic tradeoffs made in bubbles, as capital is misplaced and used inefficiently, that are just as costly as the money lost on the actual investments.

The banks are just as responsible for this too, I've heard ridiculous stories of middle class people getting offered million dollar mortgages while small/medium businesses are shutting down at a faster rate than new ones are being started.

</comment></comment></comment><comment><USER2> It's possible to graduate from an economics program without knowing what the IMF does, or how a bank works, or how trade agreements work, or what the major imports and exports from China are. That suggests to me that something has gone badly wrong with economics education.

<comment><USER11> As someone who went through an undergrad econ program, I strongly disagree for a few reasons:

1\. Econ programs focus early on building basic mathematical models; a pretty normal curriculum is microeconomics, macroeconomics, econometrics (using stats + data), and then whatever you want your electives to be (e.g. international trade economics, labor economics, etc.). Without being fluent in at least the basic models, you don't have any framework with which to work with other subtopics, but learning the basics takes most of your time.

2\. The specifics of how banks are run, or central banks work, or what we trade with China today, is more or less irrelevant trivia unless you _actually work in that part of finance_ or will become a policy-focused economist, and you'll have plenty of time in your PhD to figure those details out. Economics is an extremely broad field and you can easily make a useful career out of, say, analyzing corporate acquisitions, or doing pure game theory, in which case how monetary or trade policy is conducted is pretty much irrelevant to you.

3\. Since graduating, I found my econ education was extremely helpful when learning how central banks actually print money, or how trade agreements are put together, because I have a general high-level picture of how things move. That's in contrast to people who think just because base money is increasing, there must be inflation -- if you've worked with the models much, you know they're all approximations, but you get a much better sense for what is a reasonable vs. unreasonable result.

I mean this is like complaining it's possible to get a CS undergrad degree without knowing how the Linux kernel works, or getting an CS PhD without knowing the details of TCP control flow.

Both economics and CS are large fields and practitioners don't all work on the same thing -- the point of the degree is to provide _a shared language and foundation_ , not to teach you every practical skill there is, because that's impossible and the relevant skills change very quickly.

</comment></comment><comment><USER31> [http://www.economicpolicyjournal.com/2016/10/brad-delong- end...](http://www.economicpolicyjournal.com/2016/10/brad-delong-ends-up-in- podesta-emails.html)

<comment><USER10> Exactly. This is the real reason why economists get it so wrong: their incentives.

Brad DeLong in particular is a real piece of work: [http://www.nakedcapitalism.com/2016/06/clinton-loyalist- autc...](http://www.nakedcapitalism.com/2016/06/clinton-loyalist-autclinton- loyalist-authoritarianism-brad-delong-threatens.html)

<comment><USER31> Sad thing about guys like Delong was the guy they despised for crass careerist reasons was the one candidate in a long while that would have been open to hearing them out on their policy proposals.

</comment></comment></comment><comment><USER18> One of the problems with the economics profession today is a lack of real societal responsibility. An example is supply-side economics, which is promoted by conservative politicians, including Trump. The economists all know it doesn't work, and so they ought to make that clear to the country. But instead they just sit back and say nothing.

</comment><comment><USER32> The root of the word "economy" is from the greek "oikos" (habitat). It is the same root as that of "ecology".

Economy means "the laws of the habitat", and ecology means "the story of the habitat".

How can 'smart people' think they are separable?

Imagine trying to do physics or chemistry, except that everything had to translate into the units of $.

Why is it: my sister is a full time mom on her own dime, whereas a friend of mine gets paid $14/hr to nanny? (Her clients pay $50/hr and she gets a fraction of that).

Care for one child, get paid, whereas if you care for another child, you have to pay? My sister could go work as a nanny and get paid to care for someone elses' children, but when it comes to taking care of her own, she's running a loss? To keep up, she goes and cleans those very same peoples' houses.

That's a bunch of nonsense, that two children would have different economic values. That one family would have to scramble just to keep up while another family's cup runneth over. The very real work my sister does to care for my niece is all but invisible in the economist's spreadsheet, while my nanny friend is considered a working, productive person.

These days I've been taking care of my niece quite often, and my work is not counted on the spreadsheets of the economists either. That doesn't make it any less valuable ecologically, spiritually, socially, communally... But economically, my work is in the red.

The contradictions are endless. People work "for free" all the time, and it doesn't get counted. In fact, such work is often "discounted" as amateur, poverty, laziness.

What's much more important, to many economists, and what _is_ counted, is to sit at some desk somewhere doing busywork in an office so that you can pump economic power into the pockets of rent suckers. That is counted on the economists' sheets. That'll get you greasy green paper pieces. So I could be doing that and walking around with all the clout telling people about my career and buying people drinks at the bar, and people would pat me on the back, and my family would be so proud of me, and my friends would envy my bank account, etc. But I wouldn't get to spend time with my niece.

Until people stop putting up with the madness of mainstream economic religion, it's just going to continue.

People take monstrous loans that grow and grow, just to have a stable home. That's the norm. What good does it do anyone? All it really does is uproot communities on a yearly basis.

I'm not saying there's anything wrong with being nomadic. But when multiple generations are in exile because of rampant greed all across the board (homeowners are corroborating by taking those loans out in the first place, by paying such high prices at the cost of such high debts)... it's a problem.

How much time and human energy is wasted by "breadwinners" doing ritual busywork at offices 40-70 hours a week? They could be at home doing things that are _actually useful_ for at least half of that time. Being with kids, cooking, gardening, reading/studying, exercising, cleaning, fixing stuff...

What counts as "busywork" vs. real productive work is ideologically relative... and here is where we desperately need spiritual evolution.

</comment><comment><USER33> Science is prediction, not explanation - Fred Hoyle.

By that measure, economics hasn't qualified as a science yet. The prediction quality is terrible. That's embarrassing. There's plenty of data. There's plenty of compute power. By now, economics should have more predictive power that it demonstrates.

<comment><USER17> Scientists cannot accurately predict what the temperature in my city will be next month, so is climatology a science?

Economists could make predictions in isolated systems - the problem is 'the real world' is complex.

Worse - the economy is made up of human actors, and policy makers, investors, all of whom make decisions that are not necessarily rational. Ergo, in such systems, it's pretty hard to determine outcomes.

Economists can spell out for you pretty much what would happen if foreign purchasers dried up in Toronto, along with a slight increase in rates ... but we can't be sure if/when that would happen.

<comment><USER34> > Scientists cannot accurately predict what the temperature in my city will be > next month, so is climatology a science?

weather forecasts have been getting more and more accurate, actually

<comment><USER17> Weather is inherently unpredictable. They'll never be perfect.

I missed the most important point: because the economy is made up of intelligent actors - there is a dynamic aspect to economist predictions.

If the weatherman says 'it will be 'very hot' next week' \- this can be right or wrong, but the weather won't change as a result.

If a prominent economist says 'there will be a recession next month' \- business leaders may hold up on investment thereby causing a recession, where none might have been.

So it's pretty hard to predict the future, when your predictions change the future ;)

<comment><USER34> That just seems like it makes it easier! You predict a recession, you're wrong, but you end up being right anyway!

</comment></comment></comment></comment></comment><comment><USER35> "The economists are leveraging their academic prestige with secret reports justifying corporate concentration. Their predictions are often wrong and consumers pay the price.

If the government ends up approving the $85 billion AT&T-Time Warner merger, credit won't necessarily belong to the executives, bankers, lawyers, and lobbyists pushing for the deal. More likely, it will be due to the professors.

A serial acquirer, AT&T must persuade the government to allow every major deal. Again and again, the company has relied on economists from America's top universities to make its case before the Justice Department or the Federal Trade Commission. Moonlighting for a consulting firm named Compass Lexecon, they represented AT&T when it bought Centennial, DirecTV, and Leap Wireless; and when it tried unsuccessfully to absorb T-Mobile. And now AT&T and Time Warner have hired three top Compass Lexecon economists to counter criticism that the giant deal would harm consumers and concentrate too much media power in one company.

Today, "in front of the government, in many cases the most important advocate is the economist and lawyers come second," said James Denvir, an antitrust lawyer at Boies, Schiller.

Economists who specialize in antitrust — affiliated with Chicago, Harvard, Princeton, the University of California, Berkeley, and other prestigious universities — reshaped their field through scholarly work showing that mergers create efficiencies of scale that benefit consumers. But they reap their most lucrative paydays by lending their academic authority to mergers their corporate clients propose. Corporate lawyers hire them from Compass Lexecon and half a dozen other firms to sway the government by documenting that a merger won't be "anti-competitive": in other words, that it won't raise retail prices, stifle innovation, or restrict product offerings. Their optimistic forecasts, though, often turn out to be wrong, and the mergers they champion may be hurting the economy.

President Obama promised to fight corporate concentration. Eight years later, the airline industry is dominated by just four companies. And you're paying for it. "Some of the (Economics)professors earn more than top partners at major law firms. Dennis Carlton, a self-effacing economist at the University of Chicago's Booth School of Business and one of Compass Lexecon's experts on the AT&T-Time Warner merger, charges at least $1,350 an hour. In his career, he has made about $100 million, including equity stakes and non-compete payments, ProPublica estimates. Carlton has written reports or testified in favor of dozens of mergers, including those between AT&T-SBC Communications and Comcast-Time Warner, and three airline deals: United-Continental, Southwest-Airtran, and American-US Airways.

[https://www.propublica.org/article/these-professors-make- mor...](https://www.propublica.org/article/these-professors-make-more-than- thousand-bucks-hour-peddling-mega-mergers)

</comment><comment><USER36> Economists cannot predict the impact of [https://en.wikipedia.org/wiki/Parable_of_the_broken_window](https://en.wikipedia.org/wiki/Parable_of_the_broken_window)</comment>


FCC report finds almost no broadband competition at 100Mbps speeds - <AUTHOR> https://arstechnica.com/information-technology/2018/02/fcc-report-finds-almost-no-broadband-competition-at-100mbps-speeds/ <comment><USER2> Duplicate. [https://news.ycombinator.com/item?id=16361899](https://news.ycombinator.com/item?id=16361899)</comment>


SpatialOs - <AUTHOR> https://spatialos.improbable.io/ <comment><USER2> Would certainly be useful for some larger minecraft servers.</comment>


Ask HN: News sites suck, is there a site where people write long articles - <AUTHOR> Like a Twitter for news but longer <comment><USER2> Longer than... 140 characters? What are you actually asking for? Be specific. NYT writes long articles. New Yorker. Christian Science Monitor. What do you want?

<comment><AUTHOR> something similar with NY Times but written by everyday people (like Twitter)

<comment><USER2> "Everyday people" don't write long articles.

</comment></comment></comment><comment><USER3> [http://glance.wtf](http://glance.wtf)

Not quite what you're after, but a curated, speed-readable list of good reads.

<comment><AUTHOR> Was not expecting that,interesting

</comment></comment><comment><USER4> I am working on a similar platform called TalkBig [http://talkbig.co](http://talkbig.co)

<comment><AUTHOR> I'm kind of newbie in the start up world but your 'landing page' does not offer that much info about what the product is about

<comment> Warewolf-ESB Yep you're right. No idea what this is and how I can get more info without submitting my email.

</comment></comment></comment><comment><USER5> Here you go: [http://longform.org/](http://longform.org/)

</comment><comment><USER6> someone recommended this: Its kinda like a kick starter for writers. Though in the end its a subscription thing.

[http://www.beaconreader.com/](http://www.beaconreader.com/)

<comment><AUTHOR> awesome tool for writers.Very similar with Kickstarter

</comment></comment><comment><USER7> or how about the Atavist ([https://atavist.com](https://atavist.com))?

</comment><comment><USER8> Have you looked at Medium.com?

<comment><AUTHOR> Yea, but medium is mostly stories . I wanted something similar with Twitter that will show news in real time and give users the power to write them rather than big conglomerates like CNN or fox.

</comment></comment><comment><USER9> The New York Times. There articles are quite in-depth.

Try paying for it, or it will go away someday.

Or read my own essays:

[http://www.warplife.com/mdc/essays/](http://www.warplife.com/mdc/essays/) [http://www.warplife.com/mdc/books/](http://www.warplife.com/mdc/books/) [http://www.warplife.com/jonathan-swift/](http://www.warplife.com/jonathan- swift/) [http://www.warplife.com/tips/](http://www.warplife.com/tips/)</comment>


DoH Secure DNS Doesn't Make Us a Villain Mozilla Tells UK ISP's - <AUTHOR> https://www.theregister.co.uk/2019/07/06/mozilla_ukisp_vallain/ <comment><USER2> I love how reports that overstep reason bring attention to an issue and increase the rate of adoption of what the report was against. [written with Firefox and DoH]</comment>


Ask HN: Canonical removed all job vacancies - <AUTHOR> In this URL, https://www.canonical.com/careers/all-vacancies, approximately month ago, there were 27 Job Vacancies. I was interviewing for a position but decided it was not for me later, and I was told to check here and see wheter there will be any other position would be for me, but now there is none. Is this related to CEO change? <comment><USER2> The canonical careers page used to have a section about requirements for your application. I said that you should point out one exceptional thing you did in your life. If you had not one single exceptional thing to highlight, it went on, you should instead apply "here". The last word was a link to the application page of the US government.

 _This is from more than 10 years ago and all from my memory, so I 'm not 100% sure about every detail_

EDIT: It probably was the Ubuntu employment page. Unfortunately 2005 is completely missing at archive.org. Digging though old versions I found these other gems:

\- HR would like us to say 5+ years Ubuntu experience. "Lots" will do.

\- Speak many languages. French and Spanish are better choices than Klingon or Esperanto.

\- You need to like people. They need to generally like you.

EDIT 2:

Found it! It was on markshuttleworth.com and the word here in the last sentence was a link to www.whitehouse.gov

 _I 'm looking for talented people to help turn ideas into reality. I like to work with people who fit this description:

Brilliant. Tell me about things you've done in which you have truly excelled. I don't mind if you did brilliantly at school and then crashed at university because you were more interested in something else, just tell me about the something else! It could be an open source piece of software you wrote and which has been widely used. It could be a small business you've setup and run. It could be that you were consistently in the top 10% of your class at school or university. It could be that you are a natural leader or organiser. If you haven't done brilliantly at something in life, try applying here, you'll fit in just fine._

[https://web-beta.archive.org/web/20041024004348/http://www.m...](https://web- beta.archive.org/web/20041024004348/http://www.markshuttleworth.com:80/work.html)

</comment><comment><USER3> They had a bunch of layoffs recently, from what I hear. There might be a hiring freeze.

</comment><comment><USER4> They are restructuring and had to lay off many people. There is now focus to cloud and iot. They will probably put job listings once they complete the restructuring.</comment>


Ask HN: Why punish popularity? - <AUTHOR>

It seems that there is a weighting algorithm in place that penalizes submissions that receive many upvotes from a common referral point.
For example, member jashkenas submitted http://news.ycombinator.com/item?id=2872831 earlier today and offered a HN link via Tweet.  This article received a quick dozen upvotes but was quickly buried on the 2nd page and has since fallen into limbo.
Are all HN submission discussions intended to grow organically?  Is there no room for directing interested parties to HN via a common source for the purposes of stimulating discussion?
I can envision a scenario where this would stop karma-baiting, but come on... there must be a better way.  jashkenas is a valuable member of the HN community and it's ashamed that he cannot serve as a source for stimulating discussion through a (now) ubiquitous channel for communication. <comment><USER2> I think I support the current system, though maybe there are ways of tweaking it. If there's no preference for internal decision-making on HN by people actually reading the /newest page, HN will tend to only consist of things that had traffic driven to them from something like twitter, a popular blog, or reddit (it's already pretty hard for anything on /newest to get noticed).

That seems like it'd lead to an HN that consisted mainly of discussion of things that're already being discussed elsewhere. To avoid that, some decoupling of communities so that what's at the top of HN is primarily driven internally is good, imo. But, perhaps there's a better way than devaluing externally driven votes.

</comment><comment><USER3> I wonder if this new activity of the weighting algo noticed all the rapid upvotes for new posts originating from #startups on freenode? That place is a regular source of 'please upvote my story here guys: <link>' even from the channel ops, two well-known HN-ers.

</comment><comment><USER4> Clickable: <http://news.ycombinator.com/item?id=2872831>

</comment><comment><USER5> Everything posted on Hacker News has the same and equal ability to be picked up from /newest. If the content you are posting is interesting it will naturally hit the front page and will not need artificial votes from friends.</comment>