Scott Adams did a pretty good job lampooning modern economists this week:
And I’m not kidding. Here’s an example of modern economics from Matthew Rognlie, an “economics” graduate from MIT (stolen from The Dollar Vigilante):
Just like with all centrally planned (aka communist) economic ideas his paper is filled with all sorts of equations.
And just like all central planned ideas the answer to all these computations is more government intervention into the economy. The public, ignorant of economics, goes along with it because of the fancy mathematics models which, time and time again, don’t fit reality.
That’s not economics. It’s not science. But it is what governments are relying on when they make their social-engineering policies: mathematical models that only a few hundred people in the world understand.
That dipstick doesn’t realize what the real underlying problems in the housing market are. Jeff Berwick (rich dude with no PhD) does:
Rognlie has noticed that housing has gotten more expensive over the years but completely misses the point as to why. The main reason is due to central bank money printing. Secondary reasons include things like government regulation and interference via things like Fannie Mae and Freddie Mac (that are bankrupt yet again) that dramatically increase the cost of housing.
Government cannot improve an economy via any intervention and central banks can never improve an economy by printing money and manipulating interest rates away from their natural market levels. Any action by government or central banks in the economy can only hinder the economy as a whole.
One day, future historians will look back and make note of this very fact. Sadly, in the meantime, we have to live through these market manipulators trying to tinker with the economy to make things “fair” which will only result in a worsened economic situation for everyone and only serve to make the rich richer and the poor poorer.
The only good thing about modern economics is that all of those PhDs practicing it are going to be permanently disproven once the current monetary system goes to hell. And then the real economists can take over and fix things.