Friday, March 28, 2008

On Macroeconomists

Well, I tried twice to post a comment at Freakonomics on the article they ran about macroeconomists, but neither one was allowed to be posted. Did I say anything offensive? I guess, if you're a macroeconomist, I did, as what I posted, to answer their question of where all the macroeconomists have gone, was the opinion that perhaps people have stopped listening to macroeconomists because they have proven time and again to be wrong about just about everything -- Krugman included (especially?). I would argue that microeconomist are generally right about how the economy works, but I have seen little evidence that macroeconomists understand a thing about the economy. They are typically concerned with how government affects things, and end up often siding with government and encouraging more government programs. Krugman's opinions have become increasing idiotic over the years, and another famous macroeconomist, John Maynard Keynes, is responsible for most of the economic ills of the 20th century, including thee stagflation of the 1970's in Europe and the U.S., and the inflation-driven collapse of economies throughout Central and South America and Africa. Keyne's suggestion to prevent a recession? Print more money! Putting the cart before the horse, he thought inflation caused economic booms (and not vice versa, as anyone with half a brain would know and understand). He also opined that deficit spending by government wasn't that big a deal and that it would help the economy as well. Never mind what happens when the bill comes due. With such stupidities coming out of the mouths of macroeconomists, is it any wonder nobody cares to hear what they have to say?

If macroeconomists were a kind of doctor, they would have been driven out of the medical field by now. The would have been driven out by lawsuits, and they would have likely not been allowed by law to practice anymore, having been identified as being, for the most part, quacks.


Anonymous said...

Troy, I agree with most of what you write about Keynes. However, I don't think you should label all macroeconomists together. For example, when Milton Friedman was writing about monetary policy you would have to describe him as a macroeconomist. Yet Friedman provided the most effective intellectual fire-power to combat the fight-recession-first mentality during the 1970s and 1980s. It seems to me that Friedman's views about inflationary expectations are just as relevant in that context today.

Troy Camplin said...

Certainly Friedman is an exception -- but the exception doesn't negate the rule. I would argue that Friedman's ideas were effective because he came at them with a microeconomist's understanding of the world as a bottom-up dynamic, emergent system. The vast majority of macroeconomists see the world in a top-down fashion, and that is where they make their mistakes. Friedman's policies were designed to negate as many top-down policies as possible -- as is right when trying to keep a complex system like an economy healthy.