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Fake Economist: how do you tell?

2013-01-25 14:33:37.546231-08 by Dan Lyke 7 comments

NPR: The Fake Economist Who Conned A Nation.

Dave said: "was amazed to find that this article was not about Paul Krugman."

But rather than picking on Krugman, I'm gonna ask two questions: How do you tell if you've been conned by an economist? The lack of verifiable models suggests that this may be impossible. Second, given that, aside from lying about his degree, how did he "con" Portugal?

[ related topics: Currency Interactive Drama Economics ]

comments in ascending chronological order (reverse):

#Comment Re: made: 2013-01-26 04:38:49.241463-08 by: meuon

The target must give in, want to be conned. He was merely validating things they wanted validation for. A little confered trust from someone else, a little voice in your head saying: "I want to believe" and the farce is on it's way.

#Comment Re: made: 2013-01-26 07:44:13.211344-08 by: DaveP

Yeah, though Krugman was my first choice for picking on (in conversations, I've referred to him as "Oscar-winning economist Paul Krugman" which surprisingly few people call me on), I think you could use any economist as your target. But then I also think if you're going to call something a science, you need to be able to run repeatable experiments.

#Comment Re: made: 2013-01-27 16:44:56.567017-08 by: Medley

Is astronomy a science, then?

#Comment Re: made: 2013-01-28 07:34:04.153583-08 by: TheSHAD0W

I suppose astronomy is a science, but look at how often theories are revised in astronomy as new things are noticed? But with economics matters are much worse; popular theories in astronomy don't affect how the stars function. :-P

#Comment Re: made: 2013-01-28 09:43:13.734287-08 by: Dan Lyke

That's why I use "falsifiable theories" as my benchmark for science: Is there some piece of data that could be unearthed that could render the theory false? Or will every new discovery be hand-waved away with some variant of the "no true Scotsman" defense or other appeal to externalities?

Will a huge spending binge, or austerity, cause the early end of a recession? We have a whole lot of theories, a bunch of really noisy data, but there is a hell of a lot of "yes, this matches with our theories because [of these cherry-picked results]" rather than "here's our confident prediction about these metrics moving forward, and if these predictions are wrong our model was wrong".

I think the real problem with economics as a science is that most real discoveries will, by the very act of their discovery, invalidate themselves: "The market" is very smart, and will assimilate all public information and act on it. Thus an observation about how "the market" will act is going to feed back and cause it to act differently.

#Comment Re: made: 2013-01-28 12:52:09.644938-08 by: Larry Burton

Science is based on the laws of nature where things act rationally. Economics is based on markets made up of consumers who very often behave irrationally. Essentially you have the same problem calling economics a science as you do calling psychology a science and that is probably due to the fact that they are two related arts.

#Comment Re: made: 2013-01-29 04:18:15.153566-08 by: DaveP

This reminds me that I enjoyed reading Extraordinary Popular Delusions and the Madness of Crowds and it's probably about time to read it again.