Economics – hard to suspend disbelief – is it satire?

I’m going to incorporate some thoughts about economics in the third book of the April series, “The Middle of Nowhere”.

It’s hard to do so because today what the talking heads on TV and the writers in financial e-zines write is so bizarre it is like a well written ‘Onion’ article. You are almost sure it is satire, but not without small doubts you will read it the wrong way and embarrass yourself in front of all your friends.

If you wish to have your car repaired or your teeth cleaned the state requires you to deal with a mechanic who is licensed and certified. Your dental hygienist has to be approved by the almighty state too. If you think this is primarily for your protection  you are a fool. It is to limit the number of people who can enter the profession and keep prices up for them.

Do you know what you need to be an economist?

Well a degree in economics helps. But actually many people work as economists from other backgrounds in mathematics, business, finance or even agriculture.

There is no such thing as a licensed and certified economist.

If you look into the matter closely, you do not even need a personal history of being right more than half the time to continue working as an economist.

If you as a surgeon killed fifty patients in a row on your operating table do you think you’d continue in the business? But an economist can be wrong every week for a year and still be employed, asked to appear on TV networks and given awards and advanced to  better jobs.

The key to being a successful economist today is the same as being a successful priest in a major religion. Publicly profess believe in the dogma of your sect and punish any unbelievers.  Today the sect in power is Keynesianism. The Fed and the treasury espouse it and the vast majority of academic economists are given fellowships and published based on faith in this orthodoxy.

As an example of how convoluted such academic thinking works, online today was data showing the Japanese in the last year have exported gold for the first time since they started keeping records.

The economists painted all sorts of complicated theories about how the psychology of the Japanese has changed because they have not seen inflation in so long it is impossible for them to worry about it. So since gold is an inflation hedge they don’t want it anymore. 0o.

Since 1989 the value of Japanese stocks has stagnated. The real estate market went from homes being an investment to an expense. Everything is expensive. I had a friend go to Japan for a few weeks. He bought a MELON in a fruit market for the price on the sign. When he got back to his rooms he calculated the exchange and it was a $30 melon. The Japanese have layers and layers of wholesalers and inefficient protected industries to drive prices up. Imported rice has a 700some % tariff on it. Japanese industry is being sent to cheaper labor markets just as happened here. The earthquake and nuclear contamination have made everything less certain and more expensive.

Okay, here is my deep technical analysis of why the individual Japanese are selling their gold. They need the money!




2 Responses to Economics – hard to suspend disbelief – is it satire?

  1. Ori Pomerantz May 10, 2012 at 1:09 am #

    Economists are like doctors a few centuries ago – respected not because they are competent, but because the problems they work on are so important.

  2. Chris May 11, 2012 at 5:24 am #

    Economists fail because they can never see the full picture. A sudden change can alter economics, even one that changes nothing on the surface.


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