I'm sure that zero financing environment in addition to the absurd deals many of the dealers cut to move these cars is sustainable. I'm sure they can profitably continue to offer buy one get one free. Without such an absurdly low interest rate and without basement prices (probably below profitability) these cars do not sell. Nevermind this does not address the bedrock issue here: can the big 3 automakers produce cars that sell at a profit. The answer, appears to be a resounding "NO!" I'll be watching in the quarters ahead to see if these sales continue.
What you are forgetting is that our entire crisis predicates on the issue of financing. The consumer has tapped out her ability to finance and no longer has an asset bubble to sustain the overconsumption that maintained growth over the past 10 years. The automakers must respond to this new environment accordingly by cutting excess production, and sadly, jobs that ran that production. There is no other option.
I am preparing to go on the road again, so I have not much time. If you would like to take my diary and combine it with yours for posting elsewhere (I'm thinking DailyKos and EuroTrib), I would be delighted. I have a slightly expanded version at http://discuss.epluribusmedia.net/node/3452.
There can never be any set of data that can "disprove" neoclassical economic theory. The data is merely shoved into the black hole of hindsight called "revealed preferences."
Since all data, no matter what it shows, is "consistent" with neoclassical economic theory, economists with a vested ideological interest in the correctness of the theory, will not admit that their precious theoretical Emperor has no clothes.
The basis of morality is the unique worth of human life. That which supports and improves human life is good.
Economics is very simply how a society organizes itself to gather, process, produce, and distribute the material and immaterial goods and services required to sustain and reproduce human life. That is the basis for all economic systems. Whatever flavor of mathematics you choose to try and understand the economy with, must, in the final analysis, always be judged by whether it helps or hinders the the basic task of sustaining and reproducing human life.
That's why, though I was not a mathematician or trained economist - in fact had never heard of Pareto until a few years ago - I was arguing 25 years ago that the United States was committing economic suicide by allowing the use of financial derivatives.
The biggest problem with professional economists is that they have forgotten this simple truth about what an economy is all about.
With Larry Summers doing the negotiating, how can this be good?
Now they are talking about increasing unemployment benefits.
Since state websites are crashing due to all of the applications and states are running out of money, that sounds like a good idea but ya know, were is the job creation and where is dealing with outsourcing?
I'm hearing layoff after layoff but what no one is mentioning is many of these layoffs are really jobs being offshore outsourced!
and lost billions of dollars and yet he's still a fracking multi-millionaire. Dude, where's my justice?
I'll bet 100 years from now, economists will look back at Black-Scholes and chuckle in derision - "What were they thinking?!"
But seriously, what strikes me is that a lot of the derivatives that have blown up in the last two years have been traced back to a lot of people who were at Drexel Burnham Lambert when Michael Milkin was refining the LBOs looting of industrial companies. Just think - if we had actually held everyone at the firm responsible, not just Milkin, and put their asses in jail, and firmly established the principle that the financial system should be subservient to the real economy, we probably would not have had a financial collapse and economic crisis to deal with.
Well, OK, I guess it would make a good novel, at least.
I'm guess I'm the official naysayer on behavioral economics. But then, I started out as a psychology major....
and dropped out due to the doo doo of it.
Use of statiticial models, probability models, I mean we just had I think a $65 trillion dollar derivatives market build on stupid models and unfortunately the people overviewing it don't know enough about systems to test all abhorrent boundary conditions in all possible multivariate scenarios. I think some group of PhDs from Stanford lost billions on something similar in the 80's. The thing they always forget is guaranteeing a stable system in abhorrent conditions. But today's computational power is capable of testing all models in simulators to see if they "blow up" and so well, who knows what went on, they are not transparent even to people who can track on their math.
So, I still vote for bad math vs. bad brains.
But on your point there is a host of people advising the President who have no idea of what they are talking about, on this point, I believe it's true!
I feel the people who do know what they are talking about, they get to testify in hearings before Congress and all of their recommendations, their data, their research is then promptly ignored!
I think they should take mandatory attendance for all of Congress at some of these hearings AND rap them with a ruler if they are not paying attention.
....the Chicago School does base it's tailored for the rich 'theories' on classical economics however.
Without arguing the absolute position of Mr. Samuelson as Godfather his magnum opus Foundations of Economic Analysis is based on classical thermodynamic theory, at least so sez Wikipedia, so 'classical economists' are still working with math from the 1800s. Math that physicists and mathematicians abandoned around 1910 when Einstein and others realized that the universe is non-linear and not continuous. This makes quite a difference in your modeling of what could happen.
I still submit that our policy makers are listening to folks who have no idea what they are talking about. Always been plenty of folks around like that but it would be helpful if such as Summers and Rubin gave some indication that they understand something of modern economic theory.
Too busy grooming themselves that high-paying slot with Goldmand Sachs I suppose.
But these people, their math has to be bad because deregulation and unfettered markets will, by the theory, create social injustice, bubbles, more extreme cycles. It's also from historical data.
Classical economics? Paul Samuelson is the current Godfather of classical economics and well, frankly he's not wrong and he's also not a member of the Chicago school.
Actually, the problems go back to Reagan, Bush, and Clinton. I wrote this back in November 2007 and posted it in a comment on DailyKos:
Back in the late 1980s early 1990s, when I was a (poorly) paid economics correspondent (one of the first to write about the dangers of derivatives, by the way), I was a constant and regular user of government statistics, and also statistics from the various industry trade associations in the U.S. This is a brief summary of what I learned about government statistics and statistics keeping back then.
The U.S. Department of Commerce and its Bureau of the Census used to do a fair job tracking the real economy back in the 1950s through 1980s, until Reagan took office and the first wave of privatization was begun. Economic statistics, at that time, were much more than just the Gross Domestic Product. You used to be able to get what were called Current Industrial Reports for such things as Inventories of Steel Producing Mills, Iron and Steel Castings, Knit Fabric Production, and so on. All these Current Industrial Reports were quarterly, and many of the important indicators of basic economic activity, such as cement production, or iron and steel production, were monthly. Most of these Current Industrial Reports have been discontinued, including the first three I mentioned. . Just go through this list and see how many Current Industrial Reports have been discontinued – and for which industries. http://www.census.gov/cir/www/alpha.html
Why is this important? Because the best econometric models of the time used hundreds of inputs such as these to track the economy. These econometric models are probably the best that have ever been developed, but now they probably don’t function very well, because the raw statistics are simply no longer available. So now the Bush administration can claim that GDP grew by 3.8 percent, and that inflation was a feeble three percent or so, and who can gainsay the numbers? The numbers are no longer available – unless you’re willing to pay the private firms and the trade associations that have taken over. Today -- and I’ve been looking the past few months, since it seems I’m about the only moron on the planet who has some ideas about these things AND is willing to share it on the blogosphere without any remuneration whatsoever -- you can still get most of the trade association reports, but they are all several hundred dollars.
The Commerce Dept. used to put out an annual tome called The U.S. Industrial Outlook. The contents were pretty much broken down along the lines of the list of Current Industrial Reports I linked to above. Each separate chapter pulled together all the statistics for that particular industry, provided a summary of the past years’ developments in that industry, and listed the sources of information for that industry, including the address and phone number of the Commerce Dept. specialist that wrote that chapter. I used to call those specialists for my economics news articles, and they were founts of information. They were national treasures. And they were all being slowly removed through attrition. The first time I really became aware of the insidiousness of the Reagan assault was when I called the specialist on power generating equipment – the turbines and boilers and pressure vessels that go into electric power generating plants. After getting the industry information I needed for an article, he mentioned he would be retiring at the end of the year. Assuming that he had been given an assistant that he was training to replace him, I asked for the name. There was no name. There was no assistant. There would be no replacement. When this specialist retired, the U.S. government – our government, your and my government – would no longer be following what happened in the power generating equipment industry.
Think about that for a minute. Have you experienced brown-outs or black outs the past few years? Well, our government has not kept tabs on the one industry vital to rebuilding the electric power generating industry for the past twenty plus years. How can intelligent policy be made if the government is not keeping track of such a vital industry? Well, duhhhh… And this is just ONE example of dozens. You really need to go through that list of Current Industrial Reports and see what is no longer being tracked. http://www.census.gov/cir/www/alpha.html
This dearth of real economic statistics helped facilitate the transformation of the U.S. economy from industrial capitalism to financial capitalism. How could anyone protest the wrecking of the manufacturing economy, if essential facts and statistics were no longer freely available to the public?
These trends were not reversed nor even slowed down by the Clinton administration.
At the time I was writing, there was a very careful, deliberate debate going on within the U.S. Labor Department about the labor statistics. There are two sets, one based on surveys of work places, and the other based on surveys of households. I dimly recall that the latter has a sample universe of around 60,000. It was recognized that there were serious shortcomings with the surveys, and with the models used to transform the survey results into accurate and trust worthy snapshots of the entire national labor force. My assessment is that at the time, the people involved were very concerned and dedicated to getting the best data, models, and analysis possible. But, they were slowly but surely leaving, and without being replaced. And that was 15 years ago and more.
By the way, there is something out there that appears to be the successor to the U.S. Industrial Outlook. I think it’s called the U.S. Trade Outlook. It is compiled, published, and distributed by a private company, and costs, if I recall (I was looking at it – or the ads, actually – online about six months ago) $285 or some other amount that scares me off.
About the only thing left in the U.S. now that I think is worth looking at (unless you have a few thousand dollars to buy all the private reports) is the annual industry assessments done by the U.S. Industrial College of the Armed Forces. These are online available one year after publication here: http://www.ndu.edu/icaf/industry/reports.htm
One other thing I would like to note. The U.S. government used to have all sorts of documents and studies on various manufacturing industries. I remember getting one on gear cutting and making. They were excellent. A lot of these came from the Office of Technology Assessment, which was abolished during Clinton’s tenure. There also used to be lots of private studies and assessments of various manufacturing industries available from trade associations, and a host of companies. From what I’ve seen that past year or so looking for them, they no longer exist. But the really interesting thing to note is that there are now a lot of them available for various manufacturing industries in India. For example, check out this link. http://www.bharatbook.com/general/aboutus.asp
...is because most people in the field of economics don't thinkn they did anything wrong, it was the government, or the people, or a "few bad apples" that failed, NOT their theories. Hell, looking at the WSJ editorial pages in Sept./Oct./Nov. they were saying that the crisis was the result of OVERREGUALTION.
The field of economics is atrophied. Most economists are peddlers of right-wing, pseudo-libertarian ideology passing itself off as social science. They are so enamored with their highly mathematical models that show the world THEY WANT, that they FAIL to reflect the world as it REALLY is. Most economists today are baffled as to what is happening with our economy today, after all, tax cuts and deregulation should have been the panacea for us all. And most economists have absolutley no clue as to how to handle the current situation, they are ideologically ill-equipped to even understand the problems.
Of course, I am biased. I am an economics grad school dropout ;-).
"....under Capitalism, man oppresses man. Under Communism it's just the opposite..."
I cannot agree with your assertion that the mathematics of 'classical economics' is not wrong. The use of linear equations and other tools Pareto borrowed from my field, physics, over 400 years ago would be laughable if it had not resulted in such disasters as the Great Depression and the current mess.
Further, the lack of interest in recent advances in our knowledge of how people actually behave as opposed to how The Maestro and others of the Chicago School assert they do is nothing short of criminal.
Respectfully, no amount of hard work or diligence is going to produce good results as long as policy makers are listening to the Chicago School, The Maestro or any other 'classical' economist. They have no clue as to what is really going on with the economy and never will as long as they cling to their flawed theory ignoring what the latest research shows about markets and how people act in them.
Not to say that the 'complexity' guys know it all but they are a lot closer to doing that by about 400 years of math and research.
And math does not lie. People use it to tell lies but those who understand it, a dwindling minority, can refute same with it without much trouble. Ha, as if....
The average American will never 'get it' but they do know when they are being scammed...
Hi, That is one horrific story, what do you mean that someone literally starved to death? Or did someone wither away due to poverty and having their livelihood destroyed?
There have been quite a number of suicides due to destroyed livelihoods and so on.
I see people sometimes post in a comment mention of some of these and I do hope people register, make contacts, join groups because an anonymous comment here and there is shocking but there is no way to contact the anonymous poster and get people to join forces, work together to try to stop some of this rape of the middle class. Also for emotional support. Geeks I think especially, it's like the employers do not see STEM people as human beings.
I have seen the IT profession in the United States rocked to bones until shattered. I have seen our skilled workers replaced by cheap over-seas labor and the ruination of lives and careers. As this turning away away from our talent pool increased, so did our economy diminish. When a consultant friend of mine, an older woman passed away one recent January without food - I realized we were now starting to kill our own citizens. This woman was qualified - very qualified - and they saved little outsourcing her job. It is amazing to see the sales of computer books dwindling in this country. We pander to a Bill Gates - a man who has made more money than any of us could ever hope to see - to get the pulse of the US IT work force? This bill is a disgrace to the many who made America number 1 in software development - and is short sighted to the point of allowing the destruction of our core infrastructure.
In the reads link is one of my favorite books and it's because they analyzed, from the mathematics, from the theory, free trade theory and proved that it is not a "win-win" and depending upon how one implements it, it can be a huge "lose" for some nations, especially 1st world nations.
So, the problem is the real work with the real math gets ignored! These guys should be winning a Noble Prize for that book frankly and its by the mathematics, the entire second section of the text is math and one must have at least advanced Calculus to read it.
I am a Math head. But the biggest thing is one can easily lie with math, have bad math, bad assumptions, bad models.
When you say math has ethics, it does but it's by the rules of mathematics and accurately modeling is wherein the ethics lie. It's like E=mc2. That is one of the most famous equations in history but one can use that equation for both good and evil. But within the mathematics itself is the ethics of is it verifiable, is the model accurate, is it complete.
The problem isn't the use of mathematics or even absolutes, the problem is inaccurate or incomplete models.
Kind of a don't throw the baby out with the bathwater approach. Many believe the mathematics of classical economics is wrong, well, it is not, the real problem is the lack of good mathematical skill and ability. Well, Baumol and Gomory just proved that wrong and why this text is so important.
Another economist who uses quite a bit of good math is George Borjas whereas let's pick on Catherine Mann who wrote some paper to push offshore outsourcing. Well, if one reads the basic assumptions of her paper, they are just plain incorrect and therefore one cannot conclude that offshore outsourcing is good. Didn't hurt her employer is the think tank arm of a McKinsey who sell and peddle offshore outsourcing services. People took that paper as verbatim and it was not a solid research paper.
There are many examples like this but for people who do not know the mathematical details going into subject areas like Economics one believes things are "moral" but they are not, they are science and thus in the sphere of scientific method, objectivity, accuracy, thoroughness, which is a moral code but not the same as what lay people believe morality is.
First, current 'economists' are using a broken and outmoded set of tools to to their 'work'. Current economic theory being a mass of conservative bs crafted exclusively to make the rich richer and the rest of us broke.
Second, the Bush administration has, as per usual, destroyed the government reporting mechanisms to the point where the information stream is mostly garbage.
And third...heh, went over my limit here, when the crooks who run and manage our financial 'institutions' are spewing lies as fast as they can move their lips...well.
Not to excuse these self satisfied fellows the least they might have done is express some concern over the poor government information and the lack of transparency in the 'markets' but then that might have ruffled some feathers, eh?
And Robert I do believe that all the great economists of the past starting with Adam Smith built their theories with a strong measure of ethics.
Folks if you see an Instapopulist you think would be good on the front page, just hit the little arrow up and it will move it to the front page. (hit it down to remove posts from EP).
This is a very good question and one of the reasons EP exists. So many theories as well as policies are divorced from reality.
The entire field of mathematics, statistics, probability and yes, economics exists and one needs to at least analyze policy results from history!
Right now I see policy recommendations that do not even have in depth analysis on their efforts (sorry Bernstein, I don't see it) and studies, research papers with serious fundamental flaws buried within, yet because the recommendations are popular, desired, few bother to point these out. Objectivity and ethics, scientific method seemingly is going out the window.
As far as the person saying there is no morality on economics, I think they were trying to imply the mathematical aspects of the theory.
But of course, to achieve desired effects, such as increasing social equality and a strong middle class, there are some moral assumptions underneath the math.
I'm sure that zero financing environment in addition to the absurd deals many of the dealers cut to move these cars is sustainable. I'm sure they can profitably continue to offer buy one get one free. Without such an absurdly low interest rate and without basement prices (probably below profitability) these cars do not sell. Nevermind this does not address the bedrock issue here: can the big 3 automakers produce cars that sell at a profit. The answer, appears to be a resounding "NO!" I'll be watching in the quarters ahead to see if these sales continue.
What you are forgetting is that our entire crisis predicates on the issue of financing. The consumer has tapped out her ability to finance and no longer has an asset bubble to sustain the overconsumption that maintained growth over the past 10 years. The automakers must respond to this new environment accordingly by cutting excess production, and sadly, jobs that ran that production. There is no other option.
I am preparing to go on the road again, so I have not much time. If you would like to take my diary and combine it with yours for posting elsewhere (I'm thinking DailyKos and EuroTrib), I would be delighted. I have a slightly expanded version at http://discuss.epluribusmedia.net/node/3452.
There can never be any set of data that can "disprove" neoclassical economic theory. The data is merely shoved into the black hole of hindsight called "revealed preferences."
Since all data, no matter what it shows, is "consistent" with neoclassical economic theory, economists with a vested ideological interest in the correctness of the theory, will not admit that their precious theoretical Emperor has no clothes.
The basis of morality is the unique worth of human life. That which supports and improves human life is good.
Economics is very simply how a society organizes itself to gather, process, produce, and distribute the material and immaterial goods and services required to sustain and reproduce human life. That is the basis for all economic systems. Whatever flavor of mathematics you choose to try and understand the economy with, must, in the final analysis, always be judged by whether it helps or hinders the the basic task of sustaining and reproducing human life.
That's why, though I was not a mathematician or trained economist - in fact had never heard of Pareto until a few years ago - I was arguing 25 years ago that the United States was committing economic suicide by allowing the use of financial derivatives.
The biggest problem with professional economists is that they have forgotten this simple truth about what an economy is all about.
Obama trashes $3k for job business tax credit.
With Larry Summers doing the negotiating, how can this be good?
Now they are talking about increasing unemployment benefits.
Since state websites are crashing due to all of the applications and states are running out of money, that sounds like a good idea but ya know, were is the job creation and where is dealing with outsourcing?
I'm hearing layoff after layoff but what no one is mentioning is many of these layoffs are really jobs being offshore outsourced!
and lost billions of dollars and yet he's still a fracking multi-millionaire. Dude, where's my justice?
I'll bet 100 years from now, economists will look back at Black-Scholes and chuckle in derision - "What were they thinking?!"
But seriously, what strikes me is that a lot of the derivatives that have blown up in the last two years have been traced back to a lot of people who were at Drexel Burnham Lambert when Michael Milkin was refining the LBOs looting of industrial companies. Just think - if we had actually held everyone at the firm responsible, not just Milkin, and put their asses in jail, and firmly established the principle that the financial system should be subservient to the real economy, we probably would not have had a financial collapse and economic crisis to deal with.
Well, OK, I guess it would make a good novel, at least.
If they knew their collective ass from a hole in the ground, they'd have met at the St. Francis.
I'm guess I'm the official naysayer on behavioral economics. But then, I started out as a psychology major....
and dropped out due to the doo doo of it.
Use of statiticial models, probability models, I mean we just had I think a $65 trillion dollar derivatives market build on stupid models and unfortunately the people overviewing it don't know enough about systems to test all abhorrent boundary conditions in all possible multivariate scenarios. I think some group of PhDs from Stanford lost billions on something similar in the 80's. The thing they always forget is guaranteeing a stable system in abhorrent conditions. But today's computational power is capable of testing all models in simulators to see if they "blow up" and so well, who knows what went on, they are not transparent even to people who can track on their math.
So, I still vote for bad math vs. bad brains.
But on your point there is a host of people advising the President who have no idea of what they are talking about, on this point, I believe it's true!
I feel the people who do know what they are talking about, they get to testify in hearings before Congress and all of their recommendations, their data, their research is then promptly ignored!
I think they should take mandatory attendance for all of Congress at some of these hearings AND rap them with a ruler if they are not paying attention.
Kind of like Kindergarten.
...you knocked it out of the park with this one.
....the Chicago School does base it's tailored for the rich 'theories' on classical economics however.
Without arguing the absolute position of Mr. Samuelson as Godfather his magnum opus Foundations of Economic Analysis is based on classical thermodynamic theory, at least so sez Wikipedia, so 'classical economists' are still working with math from the 1800s. Math that physicists and mathematicians abandoned around 1910 when Einstein and others realized that the universe is non-linear and not continuous. This makes quite a difference in your modeling of what could happen.
I still submit that our policy makers are listening to folks who have no idea what they are talking about. Always been plenty of folks around like that but it would be helpful if such as Summers and Rubin gave some indication that they understand something of modern economic theory.
Too busy grooming themselves that high-paying slot with Goldmand Sachs I suppose.
But these people, their math has to be bad because deregulation and unfettered markets will, by the theory, create social injustice, bubbles, more extreme cycles. It's also from historical data.
Welcome to EP, I love your last line.
Classical economics? Paul Samuelson is the current Godfather of classical economics and well, frankly he's not wrong and he's also not a member of the Chicago school.
Actually, the problems go back to Reagan, Bush, and Clinton. I wrote this back in November 2007 and posted it in a comment on DailyKos:
Back in the late 1980s early 1990s, when I was a (poorly) paid economics correspondent (one of the first to write about the dangers of derivatives, by the way), I was a constant and regular user of government statistics, and also statistics from the various industry trade associations in the U.S. This is a brief summary of what I learned about government statistics and statistics keeping back then.
The U.S. Department of Commerce and its Bureau of the Census used to do a fair job tracking the real economy back in the 1950s through 1980s, until Reagan took office and the first wave of privatization was begun. Economic statistics, at that time, were much more than just the Gross Domestic Product. You used to be able to get what were called Current Industrial Reports for such things as Inventories of Steel Producing Mills, Iron and Steel Castings, Knit Fabric Production, and so on. All these Current Industrial Reports were quarterly, and many of the important indicators of basic economic activity, such as cement production, or iron and steel production, were monthly. Most of these Current Industrial Reports have been discontinued, including the first three I mentioned. . Just go through this list and see how many Current Industrial Reports have been discontinued – and for which industries.
http://www.census.gov/cir/www/alpha.html
Why is this important? Because the best econometric models of the time used hundreds of inputs such as these to track the economy. These econometric models are probably the best that have ever been developed, but now they probably don’t function very well, because the raw statistics are simply no longer available. So now the Bush administration can claim that GDP grew by 3.8 percent, and that inflation was a feeble three percent or so, and who can gainsay the numbers? The numbers are no longer available – unless you’re willing to pay the private firms and the trade associations that have taken over. Today -- and I’ve been looking the past few months, since it seems I’m about the only moron on the planet who has some ideas about these things AND is willing to share it on the blogosphere without any remuneration whatsoever -- you can still get most of the trade association reports, but they are all several hundred dollars.
The Commerce Dept. used to put out an annual tome called The U.S. Industrial Outlook. The contents were pretty much broken down along the lines of the list of Current Industrial Reports I linked to above. Each separate chapter pulled together all the statistics for that particular industry, provided a summary of the past years’ developments in that industry, and listed the sources of information for that industry, including the address and phone number of the Commerce Dept. specialist that wrote that chapter. I used to call those specialists for my economics news articles, and they were founts of information. They were national treasures. And they were all being slowly removed through attrition. The first time I really became aware of the insidiousness of the Reagan assault was when I called the specialist on power generating equipment – the turbines and boilers and pressure vessels that go into electric power generating plants. After getting the industry information I needed for an article, he mentioned he would be retiring at the end of the year. Assuming that he had been given an assistant that he was training to replace him, I asked for the name. There was no name. There was no assistant. There would be no replacement. When this specialist retired, the U.S. government – our government, your and my government – would no longer be following what happened in the power generating equipment industry.
Think about that for a minute. Have you experienced brown-outs or black outs the past few years? Well, our government has not kept tabs on the one industry vital to rebuilding the electric power generating industry for the past twenty plus years. How can intelligent policy be made if the government is not keeping track of such a vital industry? Well, duhhhh… And this is just ONE example of dozens. You really need to go through that list of Current Industrial Reports and see what is no longer being tracked.
http://www.census.gov/cir/www/alpha.html
This dearth of real economic statistics helped facilitate the transformation of the U.S. economy from industrial capitalism to financial capitalism. How could anyone protest the wrecking of the manufacturing economy, if essential facts and statistics were no longer freely available to the public?
These trends were not reversed nor even slowed down by the Clinton administration.
At the time I was writing, there was a very careful, deliberate debate going on within the U.S. Labor Department about the labor statistics. There are two sets, one based on surveys of work places, and the other based on surveys of households. I dimly recall that the latter has a sample universe of around 60,000. It was recognized that there were serious shortcomings with the surveys, and with the models used to transform the survey results into accurate and trust worthy snapshots of the entire national labor force. My assessment is that at the time, the people involved were very concerned and dedicated to getting the best data, models, and analysis possible. But, they were slowly but surely leaving, and without being replaced. And that was 15 years ago and more.
By the way, there is something out there that appears to be the successor to the U.S. Industrial Outlook. I think it’s called the U.S. Trade Outlook. It is compiled, published, and distributed by a private company, and costs, if I recall (I was looking at it – or the ads, actually – online about six months ago) $285 or some other amount that scares me off.
About the only thing left in the U.S. now that I think is worth looking at (unless you have a few thousand dollars to buy all the private reports) is the annual industry assessments done by the U.S. Industrial College of the Armed Forces. These are online available one year after publication here: http://www.ndu.edu/icaf/industry/reports.htm
One other thing I would like to note. The U.S. government used to have all sorts of documents and studies on various manufacturing industries. I remember getting one on gear cutting and making. They were excellent. A lot of these came from the Office of Technology Assessment, which was abolished during Clinton’s tenure. There also used to be lots of private studies and assessments of various manufacturing industries available from trade associations, and a host of companies. From what I’ve seen that past year or so looking for them, they no longer exist. But the really interesting thing to note is that there are now a lot of them available for various manufacturing industries in India. For example, check out this link.
http://www.bharatbook.com/general/aboutus.asp
...is because most people in the field of economics don't thinkn they did anything wrong, it was the government, or the people, or a "few bad apples" that failed, NOT their theories. Hell, looking at the WSJ editorial pages in Sept./Oct./Nov. they were saying that the crisis was the result of OVERREGUALTION.
The field of economics is atrophied. Most economists are peddlers of right-wing, pseudo-libertarian ideology passing itself off as social science. They are so enamored with their highly mathematical models that show the world THEY WANT, that they FAIL to reflect the world as it REALLY is. Most economists today are baffled as to what is happening with our economy today, after all, tax cuts and deregulation should have been the panacea for us all. And most economists have absolutley no clue as to how to handle the current situation, they are ideologically ill-equipped to even understand the problems.
Of course, I am biased. I am an economics grad school dropout ;-).
"....under Capitalism, man oppresses man. Under Communism it's just the opposite..."
---John Kenneth Galbraith
I cannot agree with your assertion that the mathematics of 'classical economics' is not wrong. The use of linear equations and other tools Pareto borrowed from my field, physics, over 400 years ago would be laughable if it had not resulted in such disasters as the Great Depression and the current mess.
Further, the lack of interest in recent advances in our knowledge of how people actually behave as opposed to how The Maestro and others of the Chicago School assert they do is nothing short of criminal.
To see what I am talking about read:
Experimental Economics: How We Can Build Better Financial Markets a book already old which foreshadows the current meltdown.
Or my favorite:
The Origin of Wealth thanks to Stoller for this.
As to 'ethics' and where that comes from start with:
The Moral Animal
Respectfully, no amount of hard work or diligence is going to produce good results as long as policy makers are listening to the Chicago School, The Maestro or any other 'classical' economist. They have no clue as to what is really going on with the economy and never will as long as they cling to their flawed theory ignoring what the latest research shows about markets and how people act in them.
Not to say that the 'complexity' guys know it all but they are a lot closer to doing that by about 400 years of math and research.
And math does not lie. People use it to tell lies but those who understand it, a dwindling minority, can refute same with it without much trouble. Ha, as if....
The average American will never 'get it' but they do know when they are being scammed...
Eventually.
Hi, That is one horrific story, what do you mean that someone literally starved to death? Or did someone wither away due to poverty and having their livelihood destroyed?
There have been quite a number of suicides due to destroyed livelihoods and so on.
I see people sometimes post in a comment mention of some of these and I do hope people register, make contacts, join groups because an anonymous comment here and there is shocking but there is no way to contact the anonymous poster and get people to join forces, work together to try to stop some of this rape of the middle class. Also for emotional support. Geeks I think especially, it's like the employers do not see STEM people as human beings.
I have seen the IT profession in the United States rocked to bones until shattered. I have seen our skilled workers replaced by cheap over-seas labor and the ruination of lives and careers. As this turning away away from our talent pool increased, so did our economy diminish. When a consultant friend of mine, an older woman passed away one recent January without food - I realized we were now starting to kill our own citizens. This woman was qualified - very qualified - and they saved little outsourcing her job. It is amazing to see the sales of computer books dwindling in this country. We pander to a Bill Gates - a man who has made more money than any of us could ever hope to see - to get the pulse of the US IT work force? This bill is a disgrace to the many who made America number 1 in software development - and is short sighted to the point of allowing the destruction of our core infrastructure.
In the reads link is one of my favorite books and it's because they analyzed, from the mathematics, from the theory, free trade theory and proved that it is not a "win-win" and depending upon how one implements it, it can be a huge "lose" for some nations, especially 1st world nations.
So, the problem is the real work with the real math gets ignored! These guys should be winning a Noble Prize for that book frankly and its by the mathematics, the entire second section of the text is math and one must have at least advanced Calculus to read it.
I am a Math head. But the biggest thing is one can easily lie with math, have bad math, bad assumptions, bad models.
When you say math has ethics, it does but it's by the rules of mathematics and accurately modeling is wherein the ethics lie. It's like E=mc2. That is one of the most famous equations in history but one can use that equation for both good and evil. But within the mathematics itself is the ethics of is it verifiable, is the model accurate, is it complete.
The problem isn't the use of mathematics or even absolutes, the problem is inaccurate or incomplete models.
Kind of a don't throw the baby out with the bathwater approach. Many believe the mathematics of classical economics is wrong, well, it is not, the real problem is the lack of good mathematical skill and ability. Well, Baumol and Gomory just proved that wrong and why this text is so important.
Another economist who uses quite a bit of good math is George Borjas whereas let's pick on Catherine Mann who wrote some paper to push offshore outsourcing. Well, if one reads the basic assumptions of her paper, they are just plain incorrect and therefore one cannot conclude that offshore outsourcing is good. Didn't hurt her employer is the think tank arm of a McKinsey who sell and peddle offshore outsourcing services. People took that paper as verbatim and it was not a solid research paper.
There are many examples like this but for people who do not know the mathematical details going into subject areas like Economics one believes things are "moral" but they are not, they are science and thus in the sphere of scientific method, objectivity, accuracy, thoroughness, which is a moral code but not the same as what lay people believe morality is.
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First, current 'economists' are using a broken and outmoded set of tools to to their 'work'. Current economic theory being a mass of conservative bs crafted exclusively to make the rich richer and the rest of us broke.
Second, the Bush administration has, as per usual, destroyed the government reporting mechanisms to the point where the information stream is mostly garbage.
And third...heh, went over my limit here, when the crooks who run and manage our financial 'institutions' are spewing lies as fast as they can move their lips...well.
Not to excuse these self satisfied fellows the least they might have done is express some concern over the poor government information and the lack of transparency in the 'markets' but then that might have ruffled some feathers, eh?
And Robert I do believe that all the great economists of the past starting with Adam Smith built their theories with a strong measure of ethics.
Folks if you see an Instapopulist you think would be good on the front page, just hit the little arrow up and it will move it to the front page. (hit it down to remove posts from EP).
This is a very good question and one of the reasons EP exists. So many theories as well as policies are divorced from reality.
The entire field of mathematics, statistics, probability and yes, economics exists and one needs to at least analyze policy results from history!
Right now I see policy recommendations that do not even have in depth analysis on their efforts (sorry Bernstein, I don't see it) and studies, research papers with serious fundamental flaws buried within, yet because the recommendations are popular, desired, few bother to point these out. Objectivity and ethics, scientific method seemingly is going out the window.
As far as the person saying there is no morality on economics, I think they were trying to imply the mathematical aspects of the theory.
But of course, to achieve desired effects, such as increasing social equality and a strong middle class, there are some moral assumptions underneath the math.
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