2. people tend to call decisions poor because they result in perceived bad outcomes (from the perspective of the person making the judgment), without considering the range of all possible outcomes (the number of which is bigger than our brains can cope with). if most outcomes would have been "bad" ones, then the decision made might have been the best one possible without necessarily leading to a "good" outcome. (many such misperceptions and misattributions are possible when judging decisions in hindsight)

we like to tell ourelves stories that put us at the top of the heap (or similarly put others "below" us), regardless of the truthiness of those stories.

As if boom and bust business cycles aren't a thing in free markets. Or monopolies. Or monetary policy. Or externalized costs. Or tragedy of the commons.

That's just run of the mill anti-intellectualism.

Monetary policy is one that is more up for debate - it seems reasonable that it can have a positive effect on gdp, but something has decoupled GDP from measures that actually effect people. I think that something is monetary policy, and note in passing that GDP was, prior to 1970, a much better proxy for energy/capita than it is now [1].

I watch the US economy with curiosity and note, for example, that core inflation, the central plank of US monetary policy, excludes basically anything I spend money on.

[1] EDIT: https://wilcoxen.maxwell.insightworks.com/pages/804.html

https://img.4plebs.org/boards/pol/image/1429/19/142919512461...

The late 1970s were when neoliberal economic fundamentalism took over public policy.

The graph shows the effect on equality.

I would argue this is when most economists lost influence in Washington, while a few like Art Laffer gained massive influence. The New Deal era prior to this was largely motivated by the work of noted economist John Maynard Keynes. Although the causality is debated, the New Deal was followed by recovery and economic growth. Economists gained influence in the public sphere because of the effectiveness, real or imagined, or "Keynesian" economic policy. These folks had lost sway in Washington by the early 70s due to the stagflation crisis[1] and the collapse of the "New Deal coalition" after the tumultuous 1968 presidential election.

The late 1970s was dominated by the ideas of economists like Art Laffer, who took an uncontroversial economic idea "tax revenue is maximized at some point between 0% and 100%" and turned it into "the tax revenue maximizing rate must be lower than our current rate" without presenting sufficient evidence for his claim. This was a convenient for some in Washington who already believed this to be true, and thus the "Laffer curve" was born. The following era of deregulation and lower taxes on the wealthy likely played a large role in increasing income inequality.

[1] The causes of stagflation are still debated, but I am convinced this was directly caused by the OPEC oil cartel using it's market power to quickly inflate the price of oil by 400%, creating a massive supply shock that started the stagflation spiral.

It's not "economists => inequality" it's neoliberal economists (almost all of them today) => inequality"

As for your last paragraph, which things in the personal consumption expenditures (PCE) index don’t you buy? I just just read though the list of items in the PCE, and it seems like stuff we all buy.

https://www.bea.gov/about/pdf/1106_ACM_PCE.pdf

Also, I’m not clear on how this is much different from what economists attempt to do: create models and test them with data.

I’m happy to be corrected on this, but ‘inflation’ in the US is usually the CPI-U series; less Food and Energy when the Federal Reserve sets monetary policy; not the PCE with which I am unfamiliar. I got weights from [1], which suggest 25% weighting to a theoretical owners rent component which in reality I don’t pay because I don’t have a mortgage. Obviously the index can't apply to everyone, happens not to apply to me. I would love to see a comparison of CPI weights vs average expenditure, which might make me feel a lot better, but I don't know where to find that info.

As for elaborating on the monetary policy part, I broadly subscribe to the idea that a 10% increase in the amount money should link to a comparable reduction in the value of a unit of currency. That is basically using a personal inflation rate that is the rate of increase in the M2.

The core inflation rate is <3%, the inflation rate that I expect is 5%. This means either I am wrong (popular view) or that the inflation rate is measuring something that isn't very interesting. I favour 2 with the caveat of accepting inflation in asset prices as inflation which seems to be the big break with mainstream thought.

The big downside of this is all the usual stats become questionable – particularly ‘real GDP growth’, which I mentally downgrade by 2%. A lot of monetarist inflation types end up looking to measures like energy/capita, which is theoretically a measure of real wealth that can be used without relying on understanding inflation calculations. I like that measure for my own reasons.

[1] https://www.bls.gov/cpi/tables/relative-importance/home.htm

I didn't know what 'core inflation' meant so had to look at the wikipedia page. Assuming that wikipedia is correct, it looks like the fed has used PCE since 2000. Apparently, CPI is mainly used for social security benefits. CPI weighs 'shelter' costs as 40% of total whereas PCE weighs it at 18%. To test out their values, I viewed the 2016 value for DC (where I have a home and mortgage), and it looked relatively accurate. However, my mortgage for that property is less than 18% of my total expenses.

I'm kind of ignorant about monetary policy, so had to google some things. But, I don't follow your statement about the relationship between M2 and inflation. Are you saying that M2 should be directly related to inflation? I would expect that M2 would only have a moderate influence over inflation because prices are based on supply and demand, not how much money there is.

For instance, let's say this year there are 200 coins distributed evenly to 10 people. You produce 10 widgets, and each of the 10 people are willing to pay 10. You make the exchange and get 100 coins, and they're left with 10 each.

The next year someone new shows up and has 20 coins making the total money supply 220. You produce another 10 widgets, but only the new guy wants a widget (the others already have one). He is not willing to pay 10 coins, but you and him agree that he can pay 1 coin. Money supply went up, but prices went down. Then the following year, all 11 people want widgets, but you're way more efficient and are now producing 20. I'd expect prices to stay less than 10 but probably higher than 1 even though the money supply didn't change.

I'm probably wrong about all of this stuff, of course. But, either way, it seems complex and data intensive enough to require a specialist.

However, your 200 coins scenario is not very agreeable to me:

1) Minor point, there is an assumption of over capacity where the widget producer could presumably produce 9 spare widgets most years.

2) More subtle point, widgets require raw resources to produce. Ignoring the machine to make the widget, the actual widget is presumably made of stuff or in the case of a service, the cost is the stuff required to maintain the servicer's lifestyle. Your scenario has quietly assumed that there are sufficient resources for our purposes. I see the question on monetary policy as being ‘does this assist in the efficient allocation of resources’. I do accept that as correct, I don’t accept it as fundamentally relevant to what I think is important, because it hasn’t made reference to the resources used to produce the widgets (ie, what was the opportunity cost) and hence begs my question. The mechanics of the situation aren’t just the feelings of how much people want to pay, they are linked to resource availability vs willingness of market participants to work for what they want. It has made me understand why I thought inflation was irrelevant to my circumstances.

4) If a rational actor appears with excess currency and doesn't want to compete with other consumers for presently available resources, then they aren’t going to sit there cheerfully with 19 currency in their pocket. If they aren’t going to buy current resources, they will buy control of future resources. Otherwise it raises the question of to what end did they accept the new currency and why is it being created?

I'm going to have to stop there because my complaints need rebuilding, but I think I'll end up finding out what the name for asset-price inflation and properly learn about the velocity of money, but is since it isn't expressed in inflation then it must be competing for future resources which I expect to turn up in asset prices. If that formulation survives scrutiny, then something really interesting must be afoot to do with how future claims on resources will be settled.

Thanks again for your interest, this has been a very illuminating conversation for me that has reduced my ignorance of economics substantially and will improve my arguments in the future.

You think those concepts came out of democracy popping a macroeconomics book out of a vote?

The Fed lowers the interest rate because they have an incentive for the economy to perform well, because they want to look good (Alan Greenspan admitted he kept interest rates lower longer than he thought necessary because he wanted to retire on a high economy). This makes money cheap, so to speak, which creates incentive for everyone to borrow. Individually, this makes sense, but together, this ends in 2009-style.

On top of that, many monopolies are created via regulations and laws.

The fact that you're not even able to discuss these concepts or to realize that economists are incentivized to believe exactly the opposite of what I've said, because they financially benefit as central planners, mean that you are anti-intellectual, not the OP.

I happen to be reading "A History of The World Economy", by James Foreman-Pack. It contradicts you at every turn (Chapter 6 esp) and notes there was a time when the U.S. was the odd man out, lacking a national bank and suffered more severe downturns than other nations, amongst other things.

Friedman's "Monetary History of the United States" pg 9-10

There is no stock of money. There are only political decisions, assorted client and patron relationships, and national and international conflicts among interest groups that define social goals and resource distribution.

Money is political power counted on imaginary tally sticks. Volume fluctuations are irrelevant. What matters is what people do, for whom, to what end, using what resources.

In an alleged democracy what should matter is economic enfranchisement - which in practice means creating fluid and porous social castes and interest groups, and inventing interesting goals with intelligence, realism, and effectiveness.

Booms and busts are caused by aimless short-term accumulation, which is a form of unintelligent goal setting. Whether tally sticks are referenced to lumps of shiny metal or numbers derived by fiat is wholly irrelevant if the only goal is to acquire as many sticks as possible, and nothing else matters.

The usual multiplier of funds in a bank assumes that the depositors will regard their banked money as still theirs and available. But note that this is actually the OPPOSITE of the thinking of my grandparents, who lived through the great depression. To them, the largest single reason to put money in a bank was precisely to forget about it; and to piously treat it as now beyond their reach and ability to spend because it was now part of a sacred reserve. A very deflationary logic since it brings down the effective banking multiplier of the money supply (reflected by spending) sharply. And this is indeed what happens after a recession, and a kind of thinking that's still with us, post 2008.

Of course, changes in sexual selection are also a large part of this. Young women and men shifted from being very interested in free spenders of the opposite sex (as a proof of money) before 2008 to being much less interested in being married to a free spender, thanks. Where I live, I was woken by revelers in the early morning leaving the fanciest downtown bars blocks away until 2008 at least a couple of times a week, for years. In all the years since that crisis, those extreme revelers have only very rarely been heard from by me. Despite my being a much less sound sleeper, now. Here too, sexual selection shifts post-crisis to a logic that's closer to bank-it-and-don't-think-about-it. (Debt accumulation, say on credit cards, may contradict me by now, however.)

No period (before 1914) is given by Friedman. This matters because, as my source is careful to say, a remarkably rigid system of international currency exchange rates had been formed before the WWI. This wasn't an accomplishment of the U.S., nor was it entirely safe, wise, or productive.

Of course, rather by definition, if multiple currencies are all convertible to gold (as they were pre-1914) they rise and fall in exact sync with each other with every whim of the gold market, every gold discovery, etc - until one falls off the cliff and has to renounce conversion - but that hardly means no whiplash!! In fact it means countries are less insulated from each other's economic troubles, more of a monoculture than a robust ecosystem - and, as stated, every country's economy is whipped about by anything that changes how easy it is to get gold out of the ground or increases or decreases consumption of it, including fashion and improvements in dental technology. Also, even the severest depression won't be reflected in the exchange rates. And it was those downturns, that were the topic.

Stable exchange rates have a trade-off; and they certainly don't prove economic stability or the absence of downturns at all. It's more like watching a team of acrobatic aircraft: they all maintain their wingtip distance strictly, and that's fine: but if one plane goes into the ground, they all do. Being in close formation isn't a proof you're not headed for a mountain or the ground; because it's not the kind of stability that has anything to do with that most important risk. Ditto rigid exchange rates.

What changed in 1914 was war. There was no intellectual decision that gold convertibility was unfashionable - war breeds inflation, necessity made conversion a hindrance to the war efforts. That international confusion (and therefore the resultant fluctuations in currency exchange rates worldwide) wasn't created by the American decision to have a central bank, for goodness sake. If anything the arrow of causation went the other way.

If Milton finds it hard to believe that the war-to-end-all-wars might have caused a wee bit of currency turbulence, so it had to be the U.S. finally creating a Federal Banking Institution that did that all over the world, he's rather isolated in that position. But of course, he's slyly leaving that leap into the abyss for the reader to make.

> and has to renounce conversion

This problem only happens in a fiat money system. It notably happened in 1930 in the US.

Nixon renounced conversion to go to a fiat system. That's what renouncing conversion means, to abandon conversion, leaving only the fiat. You are agreeing strenuously.

And again, all this a whole other topic than whether downturns were more or less frequent: which was where I started.

> exchange rates of currency

That was not the topic, the topic was instability in the money supply.

> Nixon

The US official exchange rate was a fiction from 1930-Nixon, because it was illegal to hold gold as a monetary instrument. Nixon simply did away with the fiction.

Now you want to change the topic away from EITHER economic stability OR exchange rate stability? To money supply stability, a whole other topic? Yikes.

Nixon - cavilling. Choose any illustration and the logic and semantics of "fiat" remain. Once again, you're off on a new topic, a new distraction. Not only is that not logical, it's not civil, either.

There are laissez faire arguments to counter every example you provided, but calling monetary policy laissez faire is oxymoronic or, if you prefer, anti-intellectual.

Respectfully, you just dismissed an entire school of economic thought out of hand.

Being politically savvy/expedient is as much about knowing how to get along with people as it is getting what you want.

There is a reason for that.

Politics is basically the process of pasting kludges together until the net result is something that no powerful group hates enough to be willing to smash it all to smithereens with a sledgehammer.

But if you objectively look at any of the kludges individually, or even the overall result after a few years, it's a horrific mess. A horrific mess at a Nash equilibrium. So as soon as you start picking apart any subsection of the omnishambles, everything falls out of balance and someone starts screaming for you to stop.

And it is a horrific mess that should be smashed to smithereens with a sledgehammer every few years, but the only way to do that is to wipe the slate clean and start over from scratch with multilateral negotiations between two hundred separate parties. Which is a ton of work that nobody wants to do when they can get away with kicking the can down the road for another year.

So anybody who tries to smash up any part of the mess has to fight everyone who would rather keep the status quo than do the work to fix it right now.

Writing down on a piece of paper - these truths are self evident that all men are created equal does not make it so in the real world. That's an example of ambiguity. There is no question of smashing things up and hitting a reset button when dealing with ambiguity. Here too good politics applies cause everyone in the room knows the statement is false but good politics can bring everyone into the room and keep them there and make them decide they are going to change the "truth".

Young people like you, aren't exposed to ambiguity or expected to solve ambiguities, cause you have enough on your plate accumulating knowledge about all the unambiguous stuff. It is easy for a young person to get it into his head, that all problems are pointless to work on if the text book is only filled with ambiguous problems. Which is why students textbooks aren't filled with them. The flip side is some students get it into their heads that all problems are unambiguous. They are the ones that misunderstand politics. Leave alone what good politics can do.

This is about, for example, ethanol subsidies. Basically everyone who doesn't receive them thinks they're dumb. It takes more than a gallon of petroleum to produce a gallon of ethanol, it diverts productive farmland from food which makes food cost more for the poor (and everyone), it's an inefficient use of tax dollars, etc.

Yet we continue to have ethanol subsidies, because it gets politicians from districts full of corn farmers to vote for the bill even when the bill contains a bunch of differently-toxic nonsense for other interests in different districts.

And you don't need 100% of the votes to pass, you only need 51%. So all you have to do is construct a bill that allows 51% of the districts to steal resources from the other 49% in various ways like that, and it passes. Which is why everyone hates politics.

But those bills are precarious, because it doesn't pay to have 75% of the vote. An excess 25% would require you to give things to people using resources you could have kept for your existing coalition.

Only that means you can't afford to lose too many of your votes when someone starts to make a stink about a specific inefficient program that was shoring those votes up. If the ethanol subsidies were removed from the bill, you would be short on votes.

Which turns honest outsiders just trying to make a positive impact into political enemies, because they're threatening to dismantle your majority coalition.

And the same dynamic plays out in any system based on majority voting.

Ethanol subsidies aren't ambiguous. Nobody seriously disagrees on what they are. People disagree on whether we should have them.

And there are issues where that kind of disagreement is purely subjective, like abortion. Purely a disagreement about principles rather than facts.

But there are also your Bridge to Nowhere type deals, like ethanol subsidies, that are contrary to objective fact. The bill is sold under a particular justification (e.g. reduce dependence on petroleum) and it factually does not do that. There is no principle to disagree about, it's objectively just pork, and the "facts" used by the proponents are lies.

The thing where lobbyists pretend there are zero objective things just because there are non-zero non-objective things is merely a dishonest tactic they use to paper over the unjustifiability of their preferred pork.

> The system is all that keeps you and the corn farmers from picking up a gun and removing ambiguity.

There is a difference between specific rules and the concept of having rules. Basically nobody is in favor of total anarchy or removing foundational rules like the illegality of murder.

But when your tax code is more than a thousand pages, it's past time to throw it out and start over.

Hum... Have you ever seen negotiations between hundreds of different parties? They way to do that is getting enough force to change an incentive, and changing it; then going after enough force to change another one, and changing it. Let the people fight over the new incentive far from you.

All three movies are now on Netflix.

Politics is not so much about politicising ethics or your workplace. It's the nuances about creating a positive work environment, finding compromise in decisions, creating common ground and finding a balance between honesty and caring for others.

The nuance is there but it's entirely in the grey. It's not black and white.

There's a quote from Russell Brand that comes to mind who from what I recall, was quoting his own father:

"A man that says a space is a spade is fit only to wield one"

So beeing savvy/expedient is not a problem.

Another reason for going after high-status professionals (proxy for 'smart') is that they may be less likely to use violence as a method for dispute resolution?

Also, if they have to maintain a reputation of savviness, they may be less encline to make it public knowledge that they got swindled by pressing charges.

Also, disposable income...

And similarly, I think there's a good argument for wanting leaders with lower Openness than is commonly found among those with very high IQ. Obviously you want your leaders to consider new ideas, but you definitely do not want them to get carried away by any pipe dream that comes across their desk. Instead, you want their opinions to be pretty well fixed. That way, if you figure out that their values are aligned with yours, you can rely on them to stay true.

This doesn't make a lot of sense. Most cons like the various Nigerian money scams and pyramid scams are designed to only get responses from less intelligent people.

They aren't talking about something like Bank of America overcharging you on mortgage interest every month for years. That's not the kind of con you can do without a lot of cooperation, teamwork, and setup. It's more about the one-time scores.

At the core of every con is a kernel of dishonesty, as the bait. Even something as simple as the Nigerian 419 or Spanish Prisoner has the implication that the advance fee supplied by the mark will be used to pay bribes. That means the mark is willing to be dishonest. The hook is set by revealing an opportunity for the mark to cheat the con artist to screw them out of some money. The million dollars will be transferred into your account, in your name, and we will ask you nicely to please, please give it to us, minus a reasonable fee.

You go after the person smart enough to realize that they could just keep all that money, but not smart enough to realize there was never any money to keep. You go after the person who thinks they are smart enough to scam the con artist, and also dishonest enough to try. It might be because actively trying to scam someone turns off your own defenses against getting scammed.

When you pay a bribe, you actively fuel the system of corruption that makes them necessary. If you are doing it as a last gasp to escape that system, that is a different matter entirely from doing it to buy in to that system.

The 419 scam lays it out there. You're going to be paying bribes into a corrupt system to take possession of some money that is not yours, but it doesn't belong to anyone in particular, so there is no victim, and therefore not stealing, per se. It's mostly harmless, and just a little bit crooked, so why not just wire all your savings to Lagos in $1000 chunks and get rich quickly and easily?

Being just a bit crooked is essential for discouraging the mark from getting help from a friend or talking to the cops. If they speak of it to anyone else, that person will then know they are at least a bit sleazy, and possibly criminal. It's the same tactic used by criminal predators to silence their victims. Human trafficking, for instance: "You're here illegally, so if you talk to the cops, you'll be jailed and deported, and then you'll have to pay off your debt by farming beets in hardscrabble for the rest of your life."

"The group consisted of middle class professionals; it has been estimated that a quarter were nurses and other medical personnel "

https://en.wikipedia.org/wiki/The_Family_(Australian_New_Age...

I've heard that EST and Scientology and similar go hard after dentists.

There's a difference between smart people who are leaders and smart leaders. A smart leader should know how to hire smarter people and extract good advice/insight from those people.

If there is one thing that I'm happy about with Ben Carson, it's that he proved that doctors are not generally smart.

They are highly practiced and highly skilled--like a professional athlete. "Smart", however, is only in their narrow field.

What exactly are you saying? Economists tend to lean somewhat libertarian, though like any field, there are a range of political opinions.

That's impossible, because if the right answer is to leave the market alone then economists can help gather the political will to stay the visible hand - and if the right answer is to change things then the right person to have decide what to do is someone that has thought deeply about it, by definition making them an economist.

https://en.wikipedia.org/wiki/Dunning%E2%80%93Kruger_effect