Pretentious Ivy League bastards they are. Born into wealthy families and attending private schools, the closest thing they’ve had to a hard job was the 10 hours of community service they had to do when they were caught with pot that one time in college. So that’s a bit extreme but the resumes of the world’s most prominent economists are all very similar. They really get to me sometimes with their recommendations on what is best for the economy, despite never making a meaningful contribution to it.
So with that in mind I put together a list of ten things I hate about economists.
“In Theory” – Economists are the kings of “in theory”. Every law or or rule they come up with would work “in theory”. The problem is economists study human interaction with money. They are very good at removing the human elements to study economics, but that undermines the whole point of economics. You must study the person as much as the money. In order to be an economist, you have to start your research assuming people are rational. That’s no way to start research!
Get Dirty – When was the last time you heard about Ben Bernanke touring a steel plant in Pennsylvania? Paul Krugman’s idea of getting dirty is probably having to wash the ink off his fingers after reading his own op-eds in the NY Times. To understand the economy is to be involved with the economy.
Elitist – Like getting dirty, economists are the most elitist group of academics in the world. They role with politicians and sit on or advise the boards of Fortune 500 companies. Safely comfortable in their corduroy jackets behinds the desks at Princeton, Harvard, and Chicago, they’re walking billboards for the most pretentious schools in the country. If you went to a public school there is no way you’ll ever be an economist. Maybe an economust, which means you must bow to your economist overlords.
The “Schools” – Nothing exudes a bubble of self-importance like a rivalry. Just like the bloods and the crips think any particular action they do actually matters in the world, economists have created the same atmosphere in academia. You’ve got the Chicago School, Saltwater Schools, Keynesian, Vienna School, blah blah blah. It’s created a partisan world not much different than politics where it’s impossible to be considered “smart” if you were to support both the efficient market hypothesis and assume investors are irrational. Imagine a pro-choice Republican and you get the idea of the scandal.
Economists Aren’t Businessmen – They’re PhDs and gather statistics for government and corporations. They don’t actually do anything but make estimates based on the best available knowledge. Business created this recession based on the recommendations of economists in the 90s and early 2000s. Spend some time on Wall Street, meet the bankers, work with the brokers. Perhaps once you understand their behavior you may have a better idea of predicting it. This is why you don’t see economists running hedge funds.
They Aren’t Scientists Either – Economics is an art. The difference between art and science is the ability to test a hypothesis in a controlled environment. Macroeconomists have no way of testing their theories on an entire population. Instead they’re left to study the past and attempt to predict the future.
No Responsibility – Since economists can only guess they don’t have to admit to ever being wrong. They use terms like “I think…” or “The general consensus is…” to avoid having to be certain about anything. Even the opinionated economists can write off their wrongs by saying “I was going with the best information available at the time”. This is why you don’t ever hear of economists being fired for stupidity.
The Nobel Prize - The Nobel Prize is given for 3 sciences (chemistry, medicine, & physics), literature, and peace. No economics. Instead there is the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”. Its shortened term is the “Nobel Prize in Economics”, but it is not. Regardless though when one wins any prize with “Nobel” in it we automatically respect their words as law. Al Gore has the Nobel Peace Prize for his work on greening the world, but you don’t want him negotiating peace treaties between rival African tribes. Paul Krugman*, winner of the economics prize in 2008, is a very vocal critic of the banking crisis and subsequent bailout. No problem I suppose, but people are lining up behind him as if he’s made wine from water. Krugman won the award for his work in international trade. He is not a banking expert, nor a government policy expert.
Diversity – If you want to be a respected economist, you need to meet two of the three qualifications: White, Jewish, Bearded. Don’t get me wrong here, I meet the minimum depending on how recent my last shave was. Hitting all three pretty much guarantees you prestige. The before mentioned Krugman hits the trifecta, 3 out of the last 5 Fed Chairmen were Jewish (Bernanke is even bearded), . One of the “economic prize” winners in 2005 perhaps defines the stereotype. Born in Germany in 1930, fled to US in 1938 to avoid persecution, works at the Hebrew University of Jerusalem, and is bearded to boot. All categories of academia benefit from having diverse backgrounds, and economics is missing this severely.
They’re Pussies Not to be confused with alternative meanings, to be a pussy is to be weak. And no, I will not register pussynomics.com, I think that might draw the wrong crowd on the web. Like their ability to absolve themselves of all responsibility, economists will also never place bets on their own predictions. They are observers of the market, not players. If you’re so sure the banks are still in bad shape then short them (link) and make a ton of money. Put your money where your mouth is or at least put your foot in it.
*I hate that I broke my own rules for this post. I refused to ever talk about Paul Krugman, but since he fits the profile of what I hate about economists so much I just had to do it. I don’t hate Krugman for the work he has done in international economics, but I think it’s irresponsible for someone to refuse to involve themselves in politics only to continue to make money off their political opinions. He’s the Rush Limbaugh of economics.