Last month we remarked on PhD economists’ uncanny ability to make bad predictions.
As a rule, the only people worse at their jobs than weathermen are economists and the only real difference between the two professions is that when the weatherman gets it wrong, you get caught in the rain without an umbrella, but when an economist that someone installed in the Eccles Building gets it wrong, there’s the very real potential for the financial universe to collapse. Here’s how we summed up the profession:
If PhD economists were serious about getting things right, they would have a tough job. That goes double for PhD economists charged with making policy decisions based on their conclusions. That’s because economics (like sociology and political science and astrology) isn’t a real science. It’s a pseudo-science. And as is the case with other pseudo-sciences, it’s flat out impossible to discover laws and immutable truths, no matter what anyone told you in your undergrad economics course.
Of course PhD economists aren’t really serious about getting things right, which means that in reality, their jobs are remarkably easy. Here’s the job description: make predictions that are almost never right and then make up any reason you want to explain away the fact that you were wrong. These explanations run the gamut from intentional obfuscation via opaque statistical tinkering (‘residual seasonality’) to comically absurd attempts to turn common sense into an excuse for poor outcomes (‘snow in the winter’).
We delivered that stinging indictment of the pseudoscience that is economics on the way to noting that back in January, some 75% of experts said the Fed would have hiked by now. Considering that rather abysmal track record, we encourage you to take the following with a grain of salt (or two grains, or a whole shaker full).
Via Bloomberg:
This post was published at Zero Hedge on 09/11/2015.
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