WASHINGTON (AP) — Federal Reserve Chair Janet Yellen says she wants to raise awareness of the need for diversity among economists, with relatively few women and minorities still choosing to major in economics in college.
Among the questions to be addressed, Yellen said, is how college students view the coursework and employment prospects for economics majors compared with what the actual prospects are. The lack of diversity among economics majors may reflect “a more general need to make basic economics more relevant and otherwise appealing to undergrads,” she said.
She noted that the economics association has examined the so-called “leaky pipeline,” the greater tendency among some groups to abandon economics education and employment before or even after getting a PhD.
Quick, name one female economist other than Janet Yellen and one minority economist! Okay, so I really didn’t expect you to come up with Christina Romer or Joan Robinson. A few of you might have said Walter Williams or Thomas Sowell, the only two black economists that I know of (well, the only two black economists who aren’t Marxists anyway). Dr. Sowell even has ‘street cred’: he grew up in Harlem and didn’t graduate from high school.
The problems with studying economics in college go far beyond a lack of women or minorities in the major. The truth of the matter is that economics is dying as a major in college. And there are some very good reasons why:
- For most students, economics is harder than other majors like psychology, sociology, criminal justice, management, or marketing. Much of economics is neither obvious nor common sense. And once you get past the Principles courses, economics becomes more abstract and mathematical. It requires the ability to think, which is increasingly absent from college students who just want to drink, do drugs, and hook up for four years (or more). Not to mention the fact that many students have been taking drugs for ADHD (which doesn’t really exist), and these drugs have made it difficult for them to think about anything. Fun fact: Ritalin and other drugs used to ‘treat’ ADHD have the same effect on the brain as cocaine.
- Any degree in economics is worthless in the job market. Let’s face it, corporations don’t want employees who can think for themselves. They want mindless drones who won’t question corporate policy and will sit, shake, and roll over when the company tells them to. As the author of the linked article states: “Economics is a dwindling field. Long called the ‘dismal science’ it is now considered just another philosophical school of thought; people in the money business who want quantification hire physicists rather than economists.” The author also states the truth about the job market for economists: “Economics degrees pay well, on average, but those averages hide a truth. It pays well at the highest levels and poorly at lower levels and jobs are difficult to get. Arguing that average income for economics majors is good is like noting that Michelin-star chefs make a lot of money so more people should pay to go to culinary school. It won’t create a world of all high-paid chefs.” Well, bust my buttons and call me Gordon Ramsay.
- The economics profession is intolerant of anyone who doesn’t subscribe to the mainstream neoclassical/Keynesian theories. In some ways, the modern economics profession is like a religion. Heretics aren’t burned at the stake, but they are ostracized, bullied, and otherwise harassed until they quit. Promising PhD students with an interest in economics and the ability to teach it are kicked out of PhD programs when they question the dogmas of their professors. It is a well-known fact within academia that nothing a grad student says or does matters. I myself found flaws in several economic models and theories, but when I presented my findings to my ‘superiors’ I was dismissed with “You don’t have your doctorate, so it doesn’t matter.” And may God have mercy on your soul if you know some economic history or have an interest in Austrian economics.
The Fed has actually hired many female economists. So the problem isnt’ a lack of sexual diversity:
The Fed, with more than 300 PhD economists plus another 400 at its 12 regional reserve banks, has made significant progress in increasing diversity since her start there, Yellen said. She said the Fed is committed to making further progress.
Around a third of the economists at the Federal Reserve’s Washington headquarters are women, a figure in line with women’s representation in the profession nationally, according to a Reuters analysis of Fed employee data.
And it’s not a problem outside of the Fed, either:
The share of economics doctorates awarded to women in the United States in 2012 was 32.4 percent, according to the National Center for Science and Engineering Statistics. That is up from 27.7 percent in 2002, but well below some other fields, such as health sciences and psychology.
In terms of geographic diversity, the analysis found around 36 percent of economists at the Fed board had earned at least one academic degree overseas.
According to the American Economic Association, tenure and tenure-track women in university economics departments comprise around 22 percent of the field. For blacks and Hispanics, the number is around 5 percent.
So women, minorities, and foreigners are earning their PhDs in economics and being hired. How’s that working out?
But what about economists? Of all the experts, weren’t they the best equipped to see around the corners and warn of impending disaster?
While some did warn that home prices were forming a bubble, others confess to a widespread failure to foresee the damage the bubble would cause when it burst.
“It’s not just that they missed it, they positively denied that it would happen,” says Wharton finance professor Franklin Allen…
Why did they ‘miss it’?
As computers have grown more powerful, academics have come to rely on mathematical models to figure how various economic forces will interact. But many of those models simply dispense with certain variables that stand in the way of clear conclusions, says Wharton management professor Sidney G. Winter. Commonly missing are hard-to-measure factors like human psychology and people’s expectations about the future, he notes.
That’s what happens when you train ‘economists’ as second-rate mathematicians and statisticians devoid of any knowledge of either (1) economic history or (2) economic theory prior to World War II. So what’s the solution? Here’s Janet’s opinion:
That raises the question, “Did the economics profession recruit and promote the individuals best able to bring the energy, the fresh insights and the renewal that every field and every body of knowledge needs to remain healthy?” she said.
“When economics is tested by future challenges, I hope that our profession will be able to say that we have done all we could to attract the best people and the best ideas,” Yellen said.
The profession doesn’t want to attract the best people and the best ideas if those people aren’t female or minorities, or if the ideas don’t come from females or minorities. White men need not apply.
Which just proves my adage that you shouldn’t listen to PhD economists.