Economics is bullshit

Here's a great Economics Explained video on why we can't trust economics. But this video was created by economics, so perhaps we can't trust that conclusion either

Great video anyway.

I wonder if the biggest problem with economics is that people trust economists. If people trust them it will influence behaviour. If economists are basing their calculations on previous behaviour in a dynamic system, there's a warping feedback loop.

DrZoidberg said:

I wonder if the biggest problem with economics is that people trust economists. If people trust them it will influence behaviour. If economists are basing their calculations on previous behaviour in a dynamic system, there's a warping feedback loop.

Click to expand...

Reminds me of an observation Alan Greenspan made. He said something to the effect that high levels of debt have a destabilizing effect, and much of the job of the federal reserve was to counteract that -- to twiddle whichever knobs they had control of to keep things on an even keel -- but the better they got at doing it, the more incentive that created for people to go deeper into debt.

Bomb#20 said:

DrZoidberg said:

I wonder if the biggest problem with economics is that people trust economists. If people trust them it will influence behaviour. If economists are basing their calculations on previous behaviour in a dynamic system, there's a warping feedback loop.

Click to expand...

Reminds me of an observation Alan Greenspan made. He said something to the effect that high levels of debt have a destabilizing effect, and much of the job of the federal reserve was to counteract that -- to twiddle whichever knobs they had control of to keep things on an even keel -- but the better they got at doing it, the more incentive that created for people to go deeper into debt.

Click to expand...

People tend to look at the level of harm a threat appears to cause. Economy runs more smoothly, fewer people get bit by debt other than due to their own fault (there are always those who use it recklessly and get burnt) and so people are more willing to take on debt.

And people tend to not recognize what they are doing. It's not an obsession about bad things, it's evaluating those bad things to see if you would have handled it differently, avoided the situation entirely, whether it's a fluke that is unavoidable, or whether one needs to rethink safety in regards to whatever happened.

Add to that we are very poor at evaluating low probability events. When you don't see people hurt doing X people tend to not be afraid of X--but how wide the news spreads has an awful lot to do with whether you see people hurt doing X.