oh hell yeah. Case in point is trade theory. It's just unbelievable that so many of these corporate religious pundits called economists completely ignore the assumptions in Ricardo's model. Stuff like the work force is domestic, static, completely immobile.
So, they do not look at even this basic variance which then blows up the model and why it doesn't equal a win-win.
The whole Monetarists, Chicago School, etc. I need to go read some of the main papers but let's go rip their math apart because obviously their theories cannot hold mustard even over a 5 year time line, multiple systems. ;)
I find these people scary sometimes and wonder what the hell is being rewarded these days for a PhD. I mean this is basic undergraduate mathematics man.
My real issue is that one gets "baby with bathwater" syndrome, esp. on a layman's Populist blog. So, if one says all neoclassical economics is caca, well, a bunch of people believe it is caca, when my attitude is one needs much more accurate data, objectivity, modeling..
but that is assuredly not suggesting one goes with these bad math heads or bad models!
And those trying to spin their new religion under the guise of economics, simply to justify the latest greed, money and power grab by a precious few....
I think all of their seats in various universities need to be moved to the religious studies department.
My God, I think most of Congress cannot even add 3 digit numbers together in their heads....
;)
(just a side note, I mentioned nonlinear time variant systems, but in all honesty, in terms of economics, I don't think too many variables of of this nature, but to put in nonlinear time variant data into a linear system, which I believe most economic models are....is garbage analysis)
As Brad DeLong says, "equilibrium plus maximization is a pretty cool way to look at things." I agree with that. It is a very useful tool.
I also agree that, w/r/t using that tool, "garbage in, garbage out" applies.
Where I still part company is that (1) in certain ways people systemically behave in "irrational" ways (and stock and real estate bubbles are economic behaviors in which that has been thoroughly manifested), and (2) just because the data may aggregate towards an average, doesn't mean we shouldn't pay close attention to the variances. As the old saying goes, the average of too hot and too cold is, just right. That in the aggregate in many circumstances millions of people may behave "rationally" does not mean that we shouldn't play close attention to the spread. In fact, the spread may have everything to do with the pre-existing wealth of the actors.
And both of those points are extremely important in framing public policy, as opposed to the "public choice theory" so beloved of Chicago School types.
that's missing my point. Defining what is rational is an addendum to neoclassical theory, not a replacement. That is my argument. My argument is saying that these are systems, so the model is the system, whereas the assumptions are the "inputs". Garbage in equals garbage out. But the fact the "inputs" or "assumptions of what is rational" are garbage does not mean the system itself, the model itself is garbage, it means the assumptions are garbage.
I'm also saying that behavior psychology also has serious problems with it's theories. For example, in a time varying, multivariate, nonlinear system, one cannot assume limited inputs or assume a direct correlation of a set of limited inputs due to the unknowns and interactions in "real world" settings where those variables and derivations cannot be reproduced in a controlled setting.
i.e. salivating dog + bell. In the real world there are additional factors which can cause the dog to salivate and do not necessarily equate to reinforcement behavior for it is not a controlled limited environment.
I would also claim that over time, with statical aggregate modeling of what is rational plus accommodating within these statistical norms for time variance, cultural variance, that there is a convergence point of boundary conditions which again will validate a time-invariant mathematical model. I'd have to go read on this to validate, but there are certain truths which probably will validate neoclassical economic models across cultures, conditions and time, taking into account an accurate modeling of the assumptions.
So, basically the models, if proven over time, with statistical data are reasonably accurate but if one starts with bad assumptions, i.e. defining their inputs on rationality and builds a model from those assumptions and that model doesn't correlate to historical data, deviates, then the model itself is bad.
If one has a model and the inputs have changed then if correctly analyzed in depth, that model can be proved to be reasonably correct.
Case in point is supply/demand curves. One can get anomalies but if one looks at the inputs one might be able to therefore adjust the curves, by the model that incorporate those input or rational behavior assumptions which give the anomaly results when those assumptions or data isn't taken as inputs into the model.
i.e. the supply/demand curve theory is fundamentally correct.
You've asked for support for my position. I've given it to you, and it wouldn't be difficult to call up lots more where that came from.
Where is the support for your position that neoclassical economics does not make the assumption of rationality? Where is the support for your (apparent) position that economics does not have non-falsifiable assumptions about behavior?
The difference between psychology and economics, aside from reliance upon hypotheses and experimentation, is that (with the exception of BF Skinner) no psychologist has ever attempted to run - and ruin - soiciety. THAT particular accomplishment belongs to neoclassical economic theory.
Folks, the drive by anonymous comments trying to stand by some corporate press release you heard on FAUX news, such as regulation hurts markets, what can I say, I hope the propaganda poison wears off and you start using your brain once again. We're here to help you start thinking for yourself. Regulation is a set of enforced rules, ethics, behavior if you will. It's like societal laws for markets. It is ok to shoot your neighbor in a society? Of course not and the same is true for regulations. They are the financial cops to keep ethics, transactions within a set of agreed to guidelines, rules so one can trust the market.
firstly that is absurdly broad, but secondly, the assumptions are rationale behavior which is clearly undefined, so to define rational behavior one must go to the historical data to verify a model.
Also, rational behavior is yet another aspect of behavioral psychology, they too try to predict behavior, successfully and not so successfully.
So, what is the problem here? When a model has historical precedence, has been proven over time then it is probably accurate. Changes in models, say for example, technological advances which enable services to be done over the Internet, thus creating some pretty fuzzy lines on domestic labor supplies or global supply chains which still use antiquated GDP models and attribute domestic growth incorrectly....well, they need to be changed.
But none of these vague definitions to me imply in the least that classical economic theory is wrong and it doesn't imply that one should throw out mathematical modeling with some sort of behavioral anything, more one is zeroing in on one input data stream, i.e. what is rational?
and there again, behavioral psychology is also full of holes with their models.
Let's take Karl Marx. Hey all sounds great in theory except the model assumptions that man is somehow this social beast creature like a bee, who would sacrifice the individual for the good of the collective. Oops, how altruistic and how dead wrong can one be. But that model does not prove solid throughout time and the history of mankind either.
The seller needs to limit his risk. Restricting the buyer through regulation, is not much different when closing the exchange when everyone wants to sell. This is a repeated historic lesson. Control the risk. The sellers took two much risk....
An approach to economics that relates supply and demand to an individual's rationality and his or her ability to maximize utility or profit. ....
Since its inception, neoclassical economics has grown to become the primary take on modern-day economics. Although it is now the most widely taught form of economics, this school of thought still has its detractors. Most criticism points out that neoclassical economics makes many unfounded and unrealistic assumptions that do not represent real situations. For example, the assumption that all parties will behave rationally overlooks the fact that human nature is vulnerable to other forces, which cause people to make irrational choices. Therefore, many critics believe that this approach cannot be used to describe actual economies
Neoclassical economics is what is called a metatheory. That is, it is a set of implicit rules or understandings for constructing satisfactory economic theories. It is a scientific research program that generates economic theories. Its fundamental assumptions are not open to discussion in that they define the shared understandings of those who call themselves neoclassical economists, or economists without any adjective. Those fundamental assumptions include the following:
1. People have rational preferences among outcomes. 2. Individuals maximize utility and firms maximize profits. 3. People act independently on the basis of full and relevant information.
Theories based on, or guided by, these assumptions are neoclassical theories.
There is no "rational behavior" input as far as I am aware in data models, it's historical data, statistics, aggregate indicators. Where is the neoclassical model specifically mentioning "rational behavior" in it's modeling as a set of assumptions or "inputs" into their system models?
So far these conversations are generalities so I need an example. The ones I just gave are from pure mathematical modeling so that's "classical economics vs. classical economics".
I've seen this over and over again where some buried assumption or raw data that is completely biased is used to write some sort of philosophical political agenda disguised as an economics paper. Drives me nuts because I know even reporters just do not have the analytical skills and the mathematical skills to dig into these "studies" pinpoint these flaws.
I mean David Kay Johnston for example, he has spent the time to dig into the US corporate tax code and simply finds out the real facts and how much of a ripoff on the American people the corporate tax code is...
So I need an example, because behavioral psychology, at least to me, is a series of actuarial science type of models (at best) and a set of controlled experiments claiming to predict behavior. That said, their theories, have not proved to be correct in the real world either.
To me, behavioral psychology is really based on static modeling versus multivariate adaptive nonlinear modeling, which I believe is the real world.
i.e. let's take abused kid x and abused kid y. Behavioral psychology predicts both will end up with alcoholism, lower intelligence, trouble making correct decisions and a strong correlation for repeat behavior as the abuser in adulthood.
Well, in reality, those results are not written in stone, there is more, it's adaptive, it's cognitive.
Kid x becomes a serial killer, kid y becomes a successful neurosurgeon with a happy family.
The central notion in the philosophy of science of Popper, although foreshadowed by Whewell and Peirce. In his Logik der Forschung (1934), Popper argued that the central virtue of science, as opposed to pseudo-science, is not that it puts forward hypotheses that are confirmed by evidence to some high degree, but that its hypotheses are capable of being refuted by evidence. That is, they genuinely face the possibility of test and rejection through not conforming to experience. The scientific method is not, therefore, the mechanical induction of generalizations from accumulated data, but the formation of bold hypotheses that are then subjected to rigorous test: a method of conjectures and refutations
Under this criteria, neoclassical economic theory is a pseudo-science.
You: " That is from 1 study only, has been seriously questioned as valid"
That's the beauty of running experiments. There is data which can be tested, and hypotheses retested in further experiments. The study can be shown to be flawed. In other words, the hypothesis is falsifiable.
Economics as currently practiced in the mainstream has no falsifiable hypotheses.
It isn't an either/or chocie between "bad brains" and "bad math." Modern economics has both.
Ok, so we have them trying to put spyware on the world bank computers, same with Indian offshore outsourcing firm Wipro, massive fraud beyond Enron and now this.
Guess who has offshore outsourcing contracts with these guys, our government and GM. GM outsourced DESIGN to these people!
and maybe some definitions and assumptions are off.
I'll take Paul Samuelson's paper on offshore outsourcing. He proves, with mathetmatics that indeed offshore outsourcing can be very much not a win-win and instead a case of global labor arbitrage. It's pure mathematics and with mathematics, he proves how Bhagwati is simply incorrect. If one reads Bhagwati, he does set a series of assumptions that are inaccurate.
Buamol & Gomory, from free trade models, also proves that trade is not a "win-win" and can be a huge "lose" especially for an advanced economy depending upon how it is implemented. There again, it's pure mathematics on how they proved this.
Labor Economist Borjas proves that (surprise, surprise), massive influxes of workers from Post Docs to unskilled, will lower wages in a Domestic Economy.
Andrew Card's paper is a joke, he tries to take one anomaly and extrapolate that as somehow defying the laws of supply and demand. He misses the Miami situation completely, ignores the reality that 80% of all new real estate (which generated a lot of jobs) during the 80's was funded by drug money. He ignored a multibillion dollar local economy completely as if somehow underground economies are not real, which very obviously from S. Florida in the 1980's, they are damn real.
So, let's see some concrete examples at this point on what the rub is.
Most of the papers I've seen, using mathematics to claim some effect one knows is not visible I always find gaping assumptions that are incorrect as well as incorrect mathematics.
Give me a paper that is online that is saying neoclassical economics itself is full of it vs. the author or economist is full of it and proving it with some data.
Here's one that never makes the press. One of the best assets the United States has is it's university system. Globally, the U.S. completely dominates the best schools in the world.
Yet, they are pushing some globalization agenda and accepting undergraduate degrees that just do not compare in the level of depth and time that a U.S. degree does. So, while the U.S. BS/BA must have a very high GPA, in walks someone with a BSc which can be trade school to say 90 credit hours and not nearly in depth, yet enter our best universities. The reject rates for both undergraduate and graduate school are sky high, yet this is going on.
Then, graduate school, due to wanting below poverty level graduate teaching assistants and especially Post Docs, who perform research, it turning into a political cess pool.
In other words, higher education is projected to be a larger profit market than financial services and seemingly our universities, instead of primarily focusing in on the United States and enhancing the United States seem to be moving into the business of peddling paper called degrees....to increase their coffers.
The trade deficit dropped by 12%, but that is mostly due to the bubble burst of crude oil.
Exports also dropped by 5.9%.
A very good piece of news (but maybe not who believe China and the United States economies are completely intertwined) is China trade deficit dropped by 17.5%.
It's Dismal because its no longer a science - it's politics. There is no longer any search for the truth in the field of economics, just for promotion and profit.
As you can tell, I no longer have any respect for any economist alive today. I no longer have any respect for the schools of economics. They've deteriorated to a sad joke.
Behavioral psychology has a lot of wrongs and inability to predict behavior as well.
Take for example, trying to tie in credit scores to give insurance rate quotes. That is from 1 study only, has been seriously questioned as valid, yet this is now used.
Does a credit score really predict if someone is more accident prone? Mean they are not a bad driver?
Obviously the correlation is spurious and there is potential for some other behavior associated potentially, such as being an alcoholic and so on, but obviously the conclusion that good credit scores imply one is a good driver is false.
I think any theory going from statistical results in the past should automatically be incorporating human behavior simply because that behavior is implied in past economic data which would fit the model.
And that's why I'm more of a distributionist- Thanks to the way human beings evolved, in small tribes for the grand majority of our history, economics simply works better in small communities- where the producer, retailer, and consumer all have to deal with each other in external-to-business social situations. This increases the risk of cheating and excessive hoarding, and thus reduces those behaviors.
Piling up control over production into centralized anonymous markets simply doesn't work- no better than piling up control over production into centralized anonymous governments. Instead we need DECENTRALIZATION to bring the human element back into focus- goods produced as close to the end consumer as possible. Globalization should be for the internet- communicating plans and blueprints to faraway plants.
I've gotten busy at work over the next week- so I'll be posting a lot less. But I had to put this in. Any other Chesterton/Dorthy Day fans out there in EP land?
oh hell yeah. Case in point is trade theory. It's just unbelievable that so many of these corporate religious pundits called economists completely ignore the assumptions in Ricardo's model. Stuff like the work force is domestic, static, completely immobile.
So, they do not look at even this basic variance which then blows up the model and why it doesn't equal a win-win.
The whole Monetarists, Chicago School, etc. I need to go read some of the main papers but let's go rip their math apart because obviously their theories cannot hold mustard even over a 5 year time line, multiple systems. ;)
I find these people scary sometimes and wonder what the hell is being rewarded these days for a PhD. I mean this is basic undergraduate mathematics man.
My real issue is that one gets "baby with bathwater" syndrome, esp. on a layman's Populist blog. So, if one says all neoclassical economics is caca, well, a bunch of people believe it is caca, when my attitude is one needs much more accurate data, objectivity, modeling..
but that is assuredly not suggesting one goes with these bad math heads or bad models!
And those trying to spin their new religion under the guise of economics, simply to justify the latest greed, money and power grab by a precious few....
I think all of their seats in various universities need to be moved to the religious studies department.
My God, I think most of Congress cannot even add 3 digit numbers together in their heads....
;)
(just a side note, I mentioned nonlinear time variant systems, but in all honesty, in terms of economics, I don't think too many variables of of this nature, but to put in nonlinear time variant data into a linear system, which I believe most economic models are....is garbage analysis)
As Brad DeLong says, "equilibrium plus maximization is a pretty cool way to look at things." I agree with that. It is a very useful tool.
I also agree that, w/r/t using that tool, "garbage in, garbage out" applies.
Where I still part company is that (1) in certain ways people systemically behave in "irrational" ways (and stock and real estate bubbles are economic behaviors in which that has been thoroughly manifested), and (2) just because the data may aggregate towards an average, doesn't mean we shouldn't pay close attention to the variances. As the old saying goes, the average of too hot and too cold is, just right. That in the aggregate in many circumstances millions of people may behave "rationally" does not mean that we shouldn't play close attention to the spread. In fact, the spread may have everything to do with the pre-existing wealth of the actors.
And both of those points are extremely important in framing public policy, as opposed to the "public choice theory" so beloved of Chicago School types.
that's missing my point. Defining what is rational is an addendum to neoclassical theory, not a replacement. That is my argument. My argument is saying that these are systems, so the model is the system, whereas the assumptions are the "inputs". Garbage in equals garbage out. But the fact the "inputs" or "assumptions of what is rational" are garbage does not mean the system itself, the model itself is garbage, it means the assumptions are garbage.
I'm also saying that behavior psychology also has serious problems with it's theories. For example, in a time varying, multivariate, nonlinear system, one cannot assume limited inputs or assume a direct correlation of a set of limited inputs due to the unknowns and interactions in "real world" settings where those variables and derivations cannot be reproduced in a controlled setting.
i.e. salivating dog + bell. In the real world there are additional factors which can cause the dog to salivate and do not necessarily equate to reinforcement behavior for it is not a controlled limited environment.
I would also claim that over time, with statical aggregate modeling of what is rational plus accommodating within these statistical norms for time variance, cultural variance, that there is a convergence point of boundary conditions which again will validate a time-invariant mathematical model. I'd have to go read on this to validate, but there are certain truths which probably will validate neoclassical economic models across cultures, conditions and time, taking into account an accurate modeling of the assumptions.
So, basically the models, if proven over time, with statistical data are reasonably accurate but if one starts with bad assumptions, i.e. defining their inputs on rationality and builds a model from those assumptions and that model doesn't correlate to historical data, deviates, then the model itself is bad.
If one has a model and the inputs have changed then if correctly analyzed in depth, that model can be proved to be reasonably correct.
Case in point is supply/demand curves. One can get anomalies but if one looks at the inputs one might be able to therefore adjust the curves, by the model that incorporate those input or rational behavior assumptions which give the anomaly results when those assumptions or data isn't taken as inputs into the model.
i.e. the supply/demand curve theory is fundamentally correct.
You've asked for support for my position. I've given it to you, and it wouldn't be difficult to call up lots more where that came from.
Where is the support for your position that neoclassical economics does not make the assumption of rationality? Where is the support for your (apparent) position that economics does not have non-falsifiable assumptions about behavior?
The difference between psychology and economics, aside from reliance upon hypotheses and experimentation, is that (with the exception of BF Skinner) no psychologist has ever attempted to run - and ruin - soiciety. THAT particular accomplishment belongs to neoclassical economic theory.
Folks, the drive by anonymous comments trying to stand by some corporate press release you heard on FAUX news, such as regulation hurts markets, what can I say, I hope the propaganda poison wears off and you start using your brain once again. We're here to help you start thinking for yourself. Regulation is a set of enforced rules, ethics, behavior if you will. It's like societal laws for markets. It is ok to shoot your neighbor in a society? Of course not and the same is true for regulations. They are the financial cops to keep ethics, transactions within a set of agreed to guidelines, rules so one can trust the market.
firstly that is absurdly broad, but secondly, the assumptions are rationale behavior which is clearly undefined, so to define rational behavior one must go to the historical data to verify a model.
Also, rational behavior is yet another aspect of behavioral psychology, they too try to predict behavior, successfully and not so successfully.
So, what is the problem here? When a model has historical precedence, has been proven over time then it is probably accurate. Changes in models, say for example, technological advances which enable services to be done over the Internet, thus creating some pretty fuzzy lines on domestic labor supplies or global supply chains which still use antiquated GDP models and attribute domestic growth incorrectly....well, they need to be changed.
But none of these vague definitions to me imply in the least that classical economic theory is wrong and it doesn't imply that one should throw out mathematical modeling with some sort of behavioral anything, more one is zeroing in on one input data stream, i.e. what is rational?
and there again, behavioral psychology is also full of holes with their models.
Let's take Karl Marx. Hey all sounds great in theory except the model assumptions that man is somehow this social beast creature like a bee, who would sacrifice the individual for the good of the collective. Oops, how altruistic and how dead wrong can one be. But that model does not prove solid throughout time and the history of mankind either.
The seller needs to limit his risk. Restricting the buyer through regulation, is not much different when closing the exchange when everyone wants to sell. This is a repeated historic lesson. Control the risk. The sellers took two much risk....
Here, for example: http://www.answers.com/topic/neoclassical-economics
or here: http://www.econlib.org/library/Enc1/NeoclassicalEconomics.html
There is no "rational behavior" input as far as I am aware in data models, it's historical data, statistics, aggregate indicators. Where is the neoclassical model specifically mentioning "rational behavior" in it's modeling as a set of assumptions or "inputs" into their system models?
Not trying to be a bee, just need specifics here.
So far these conversations are generalities so I need an example. The ones I just gave are from pure mathematical modeling so that's "classical economics vs. classical economics".
I've seen this over and over again where some buried assumption or raw data that is completely biased is used to write some sort of philosophical political agenda disguised as an economics paper. Drives me nuts because I know even reporters just do not have the analytical skills and the mathematical skills to dig into these "studies" pinpoint these flaws.
I mean David Kay Johnston for example, he has spent the time to dig into the US corporate tax code and simply finds out the real facts and how much of a ripoff on the American people the corporate tax code is...
So I need an example, because behavioral psychology, at least to me, is a series of actuarial science type of models (at best) and a set of controlled experiments claiming to predict behavior. That said, their theories, have not proved to be correct in the real world either.
To me, behavioral psychology is really based on static modeling versus multivariate adaptive nonlinear modeling, which I believe is the real world.
i.e. let's take abused kid x and abused kid y. Behavioral psychology predicts both will end up with alcoholism, lower intelligence, trouble making correct decisions and a strong correlation for repeat behavior as the abuser in adulthood.
Well, in reality, those results are not written in stone, there is more, it's adaptive, it's cognitive.
Kid x becomes a serial killer, kid y becomes a successful neurosurgeon with a happy family.
Same behavior, same events, different outcomes.
People are not linear, time invariant systems.
From http://www.answers.com/topic/falsifiability , for example:
Under this criteria, neoclassical economic theory is a pseudo-science.
You: " That is from 1 study only, has been seriously questioned as valid"
That's the beauty of running experiments. There is data which can be tested, and hypotheses retested in further experiments. The study can be shown to be flawed. In other words, the hypothesis is falsifiable.
Economics as currently practiced in the mainstream has no falsifiable hypotheses.
It isn't an either/or chocie between "bad brains" and "bad math." Modern economics has both.
... of, e.g., rational behavior, false?
As in, "if the data shows the following:
1.
2.
3.
then the assumption of rational behavior is untrue."
Unless you can fill in the lines, 1-3, then neoclassical economics is non-falsifiable and therefore is not a scientific theory.
sold stock 6 months before fraud discovered
Ok, so we have them trying to put spyware on the world bank computers, same with Indian offshore outsourcing firm Wipro, massive fraud beyond Enron and now this.
Guess who has offshore outsourcing contracts with these guys, our government and GM. GM outsourced DESIGN to these people!
and maybe some definitions and assumptions are off.
I'll take Paul Samuelson's paper on offshore outsourcing. He proves, with mathetmatics that indeed offshore outsourcing can be very much not a win-win and instead a case of global labor arbitrage. It's pure mathematics and with mathematics, he proves how Bhagwati is simply incorrect. If one reads Bhagwati, he does set a series of assumptions that are inaccurate.
Buamol & Gomory, from free trade models, also proves that trade is not a "win-win" and can be a huge "lose" especially for an advanced economy depending upon how it is implemented. There again, it's pure mathematics on how they proved this.
Labor Economist Borjas proves that (surprise, surprise), massive influxes of workers from Post Docs to unskilled, will lower wages in a Domestic Economy.
Andrew Card's paper is a joke, he tries to take one anomaly and extrapolate that as somehow defying the laws of supply and demand. He misses the Miami situation completely, ignores the reality that 80% of all new real estate (which generated a lot of jobs) during the 80's was funded by drug money. He ignored a multibillion dollar local economy completely as if somehow underground economies are not real, which very obviously from S. Florida in the 1980's, they are damn real.
So, let's see some concrete examples at this point on what the rub is.
Most of the papers I've seen, using mathematics to claim some effect one knows is not visible I always find gaping assumptions that are incorrect as well as incorrect mathematics.
Give me a paper that is online that is saying neoclassical economics itself is full of it vs. the author or economist is full of it and proving it with some data.
Here's one that never makes the press. One of the best assets the United States has is it's university system. Globally, the U.S. completely dominates the best schools in the world.
Yet, they are pushing some globalization agenda and accepting undergraduate degrees that just do not compare in the level of depth and time that a U.S. degree does. So, while the U.S. BS/BA must have a very high GPA, in walks someone with a BSc which can be trade school to say 90 credit hours and not nearly in depth, yet enter our best universities. The reject rates for both undergraduate and graduate school are sky high, yet this is going on.
Then, graduate school, due to wanting below poverty level graduate teaching assistants and especially Post Docs, who perform research, it turning into a political cess pool.
In other words, higher education is projected to be a larger profit market than financial services and seemingly our universities, instead of primarily focusing in on the United States and enhancing the United States seem to be moving into the business of peddling paper called degrees....to increase their coffers.
this is a horrific trend.
AP is also updating.
The trade deficit dropped by 12%, but that is mostly due to the bubble burst of crude oil.
Exports also dropped by 5.9%.
A very good piece of news (but maybe not who believe China and the United States economies are completely intertwined) is China trade deficit dropped by 17.5%.
It's Dismal because its no longer a science - it's politics. There is no longer any search for the truth in the field of economics, just for promotion and profit.
As you can tell, I no longer have any respect for any economist alive today. I no longer have any respect for the schools of economics. They've deteriorated to a sad joke.
Behavioral psychology has a lot of wrongs and inability to predict behavior as well.
Take for example, trying to tie in credit scores to give insurance rate quotes. That is from 1 study only, has been seriously questioned as valid, yet this is now used.
Does a credit score really predict if someone is more accident prone? Mean they are not a bad driver?
Obviously the correlation is spurious and there is potential for some other behavior associated potentially, such as being an alcoholic and so on, but obviously the conclusion that good credit scores imply one is a good driver is false.
I think any theory going from statistical results in the past should automatically be incorporating human behavior simply because that behavior is implied in past economic data which would fit the model.
And that's why I'm more of a distributionist- Thanks to the way human beings evolved, in small tribes for the grand majority of our history, economics simply works better in small communities- where the producer, retailer, and consumer all have to deal with each other in external-to-business social situations. This increases the risk of cheating and excessive hoarding, and thus reduces those behaviors.
Piling up control over production into centralized anonymous markets simply doesn't work- no better than piling up control over production into centralized anonymous governments. Instead we need DECENTRALIZATION to bring the human element back into focus- goods produced as close to the end consumer as possible. Globalization should be for the internet- communicating plans and blueprints to faraway plants.
I've gotten busy at work over the next week- so I'll be posting a lot less. But I had to put this in. Any other Chesterton/Dorthy Day fans out there in EP land?
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