How To Fix The Economy

[slapout9]

Not really. Galbraith is convinced that econometrics will ultimately fail because of nebulous unpredictability in human affairs. I'm convinced econometrics fails because Galbraith and the like seem to content to tackle their field with barely the math an undergrad might pick up in his first two years.

He is convinced our economic models will fail because of Criminality!!!!!he believes the best economist to explain the current situation besides himself is Thorsten Veblen.(brief synopsis: Veblen believed whenever you have unregulated free markets sooner or later they will all be taken over by crooks)

I don't see how anyone can tackle the last two pillars without math. A qualitative science isn't a very useful one.

You can't tackle the last two without math but it is the math of engineering not econometrics. You don't need advanced math for economics....6th grade arithmetic is all you need.

[Fuchs]

Having studied economics for five years on a West German university I can assure you that economists know pretty much all the crap that happens and have their appropriate terms and models for it.

"Crooks", for example, are usually a symptom of the principal-agent problem and the three market failures of information asymmetry, power asymmetry and externalities.
We know our stuff - much better than laymen.



Qualitative argumentation is useful for understanding, quantitative modelling is usually necessary for validation and prediction.
Qualitative argumentation without quantitative backup is usually little more than a fairy tale or ideology.


Econometrics are necessary to find the values of the variables in models, and without these values you know nothing. In fact, a single wrong value can ruin the result of a model with dozens of variables completely.
You can guess values, of course - just as you can throw a spear blindly into a lake for fishing.


I actually wrote my macroeconomic dissertation for the diploma without a single formula, and got away with a 1.3 grade. The reason why I was able to get away without quantification was that the topics hadn't been researched well and wasn't in the stage of econometric research yet. The researchers were still discussing the basics of the topics.
Correspondingly, I was not able to give a definitive answer to any question that arose.

[Ken White]

He is convinced our economic models will fail because of Criminality!!!!!he believes the best economist to explain the current situation besides himself is Thorsten Veblen.(brief synopsis: Veblen believed whenever you have unregulated free markets sooner or later they will all be taken over by crooks)

However, they fail to consider that so too will regulated markets also be taken over by crooks -- as will centralized economies. Instead of moaning about those facts, just accept 'em as a part of the human condition and insert checks and balances to counter quite normal and always present human greed. The human condition is inherently unstable -- that is not going to change, perfect security and / or stability will never be attained as long as animals are involved...

[slapout9]

The human condition is inherently unstable -- that is not going to change, perfect security and / or stability will never be attained as long as animals are involved...

I agree we will never have perfect security/stability BUT we can do a whole lot better than what we are doing now.

[Ken White]

I agree we will never have perfect security/stability BUT we can do a whole lot better than what we are doing now.

Not in dollars, we have more of those than we probably need (not that we spend them sensibly...) but in freedom and self reliance? We've already cur both those things in half compared to, say 1950. Certainly many things are better now than they were then were -- but many are decidedly worse particularly with respect to those two issues...

That address stability which we can improve upon little if at all. It's a people thing...