[pt]

Originally Posted by mact3333

so by your argument we should give credit to the 95% of economists who were wrong about the 2008 recession and selloff?...hmmm...so we shouldnt listen to people like Jim Rogers, Roubini, David Tice, Schiller, Peter Schiff, Marc Faber???


So we should listen to Jim Cramer and Larry Kudlow and his gang???

I think you missed my point. How does a post pointing out that 95% of economists are incompetents prompt you to ask if they should be given credit for anything? This kind of came from out of left field.

And no, in my opinion, people should not entertain any of the above entertainers / pundits / gurus you named. People need to be able to see what's going on around them, figure out who is on their side and who isn't, logically deduce how things will play out in a given set of circumstances and do their own bidding.

I tend to keep these kinds of things to myself, but it's frustrating to see these kinds of "professionals" ending up so colossally wrong and not be held to account for it.

[BTM]

I don't have to make up statistics to tell you that 100% of the economy is what's called a complex-adaptive system. Experimental economics has shown time after time after time that no matter how perfect the information, no matter "expert" the participants, bubbles and the business cycle are merely facts of life, and attempts to centrally control or influence decisions leads to greater swings. The same question, asked later in time, is based upon different information than the original one. The only way to find out who's right is to wait and see what happens, there are theoretical frameworks to use as general ideas of how participants should act in such markets, the most compelling to me being the logarithmic regressions done by Thomas Dalton showing that the more a central entity exerts force over market participants, the more uncertainty these participants ultimately face.

As for being held accountable for something, I ask, for what? For voicing their opinions? People could've been right, with completely illogical thought processes, and they should be praised? It's not like economic analysis is a law with rigid consequences, it's the study of markets, which again, are one of the most complex institutions in modern day society. They offer great advantages, but the fact that [insert made up percentage] of them were wrong, what do you want to hold them accountable for? Should we fine them? They didn't make you do anything. In the sense of macroeconomics, predicting "right" and "wrong" are almost futile, as it all depends on what happens, which depends on an infinite number of decisions made infinite times a day by everyone who is hoping to act in their own best interest given the structure they're presented with.

People are held accountable in that when they choose "wrong", they end up with diminished utility than they would experience if they were "right". Saying economist should be held accountable for having a wrong opinion, while the correct one is only verifiable after see what happens, is like asking me to guess what the windspeed will be outside my office in 2.5 months - I can look at forecasts, I can learn metrology, make all the "correct" assumptions, give you my answer, and you serve me a consequence for telling you something that not only should you not solely rely on my opinion for, but that is realistically impossible to know with absolute certainty anyway.

Fend for yourself. Life's unfair, be lucky.

[pt]

Accountable for being wrong. All anybody has to say is "I (ahem...we) missed a hole you could have routed a cruise ship through because my eyes were off the ball."

My opinion here is that a catastrophic error was made at the worst possible time, across the entire profession of economics. This means that there's something very wrong with a significant percentage of the profession's participants. I'm not saying that everybody should be perfect, nor am I attempting to hold the profession to unreasonable standards.

To address another point, I alluded to the fact that some people (such as Roubini) turned out to be right under illogical thought processes (OK, I actually said that a broken clock is right twice a day - perhaps I was a bit tough on him by insinuating he has no thought processes at all).

Further, I'm not advocating for fines or penalties or anything. All anybody has to do is admit that they were wrong about the largest magnitude economic CF that has occurred in recent times. It's one thing to miss a bear market - it's quite another to miss 2008. If people didn't want to give advice, then what is the point of becoming an economist? One cannot go into a profession like this, screw up, and then turn around and say "it was your fault for listening to me."

The failure of this profession to man up makes a clear, albeit unfortunate, statement on its own efficacy.

As far as the Anonymous thing goes, was a revolution supposed to start or something?

[BTM]

If you didn't hear anyone recommending to exercise caution you just weren't paying much attention...

Additionally, the primary reason for becoming an economist is not to disseminate advice to the public.

Further edit, the .com bubble was proportionally larger, it just didn't affect as many people as the housing market bubble did.