Tuesday, September 15, 2009

I Have Friends Who Are Economists

Here's a couple of thoughts on why Economics is not a science of any sort. Not a definitive argument by any stretch. Yet.


1. Past performance may not be indicative of future results.


Absolutely true for mutual funds. Absolutely true for internet stocks, housing, derivatives, world-wide financial systems.


2. There were a few professional Economists who were trying to get people's attention regarding sub prime mortgages, derivatives, housing bubbles, etc. Obviously, they were unsuccessful in getting their message across. Even in hindsight, I've seen and read very little about this small group. One of the few things I saw was a montage showing all these esteemed panel members rolling on the floor, laughing out loud night after night at one of the very few guys who was balls-on right. I'm not aware anyone has tried to square away what *did* happen with how it *should have* happened within the professional Economists community.



3. What good are they, anyway? Any idiot could, and did say what would happen following the repeal of Glass-Steagall of 1933 in 1999. Overwhelmingly passed by both houses.

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