Sunday, July 25, 2010

Time to Stop Listening to the Corporate Ph.D. Economists

Well, at least some of them. I read an article lately in which some Economics Ph.D. tried to convince me (and anyone else who reading his essay) that economics was really, really complicated. A gentleman named Kartik Athreya penned an essay entitled "Economics is Hard. Don't Let Bloggers Tell You Otherwise." Of course, bloggers should also ignore the fact that he works for the Federal Reserve system. I'm sure this hasn't affected his objectivity in any way, shape or form. After all, he does state that the views expressed in his essay are his own and do not reflect the views of the Federal Reserve. We should just believe that, right? We can trust him because he has a Ph.D.

So, Mr. Athreya opines, though not in so many words, that there's lots of people buying lots of things in lots of ways and that's what makes macroeconomics so complicated. Hmm. Of course I paraphrase to try to simplify so we less than intelligent beings can comprehend. Isn't that what we bloggers, or at least some of us, are best at, simplifying? Perhaps Mr. Athreya has not considered that maybe macroeconomics appears to be so complicated because that is what those with Ph.D.s in economics are paid to do, to make things seem complicated. That is how they justify their existence. Of course, I could be wrong. After all, I am just a lowly blogger.

Let's examine a little more closely what it means to have a Ph.D. Now, I don't mean to sound like someone who comes down on all Ph.D.s, indeed I know some who are not only very intelligent but very nice and personable, but the tone this particular one took sticks in my craw. And it's not just him, but there are quite a few of his ilk who seem to have come to the conclusion that those of us who don't hold the vaunted Ph.D. simply do not know enough to run our lives, or to form our own opinions, or to add any kind of insight into any conversation or debate, or to do anything about anything we haven't been formally educated in. They hold themselves superior to the uneducated not taking into account another's life experiences or his ability to reason. They carry no respect for us poor, stupid common folk. It's academic chauvinism.

That aside, the quality of one's formal education is only as good as the quality of one's teachers. The quality of those teachers can only be as good as what will be allowed by the formal educational system itself. In this case, the Ph.D.s that have been developed over the past several decades have come out of a system that is not so much an educational system as it is an indoctrination system. The public schools of this country have become a bastion of propaganda and socialism, teaching children more about political and social correctness than about critical thinking. Many economists that have earned Ph.D.s have likely learned much about the Keynesian economic system but not much about the Austrian system. Either that, or the Keynesian system has likely been praised by their professors while the Austrian system has likely been demonized.

It doesn't take much to discover, when one takes a close and objective look at things, that the Keynesian system of economics leads to more power, control and money in the hands of an elite few, mostly central bankers and central planners, while the Austrian system leads to more power, control and money in the hands of the common folk who can then vote with their dollars in terms of who survives in the marketplace and who fails. Is it any wonder someone with a Ph.D. in economics would defend the current Keynesian system of central banking? Especially if he works within that same system. Is it any wonder that when one is confronted with a thoughtful, honest, objective presentation in favor of less regulations and a more free market they might become defensive and start attacking the messenger?

The truth can hurt. As I see it, the truth is that the Ph.D.s and Keynesian economists haven't prevented our nation, and in fact the world, from falling into depression. They haven't prevented massive unemployment. They haven't prevented the boom/bust cycle from taking place. They haven't stabilized the economy as they were supposed to. Indeed, they have caused these things. They have created the conditions that have made these things possible. They can point fingers all they want and make the claim that the economy is just too darn complicated, but that's because they don't want to look at themselves in the mirror and admit they were wrong.

It seems inevitable that one of them would come out and tell you to ignore the bloggers. They simply don't want everyone blaming them. They don't want everyone blaming the system itself and attempting to dismantle the monopoly that has treated them so well for so long in favor of a system that will make them less influential and relevant. They want you to forget that the Federal Reserve system was sold to the American people on the promise that it would end the boom/bust cycle, depressions, massive unemployment and stabilize the economy. We haven't forgotten, at least I haven't, history hasn't forgotten, and the Federal Reserve system has failed. It needs to be held accountable, no matter how many Ph.D.s say otherwise.

The idea should be to keep the economy as stable as possible. The idea shouldn't be to try to grow the economy so much. It seems to me that if the economy grows too much, it is inevitable that it is going to shrink. It seems that the system favors those who have the most money and the most influence over our government.

The economy is about trading goods and services. There should be no "too big to fail" corporations. If a corporation is failing in the marketplace it is because either people don't want to use their goods or services, or bad business decisions were made. In either case, those corporations should have to pay the price and either adapt, or go out of business. That's what would happen in a free market, Austrian type economic system. It is the Keynesians and their central banking, central planning schemes that allow for government to have the means to bail out failing enterprises. They have convoluted and obfuscated in order to make economics, and specifically macroeconomics, seem too complicated to understand so that they could continue their schemes and market manipulations, so that they can continue to benefit, and to try to keep the rest of us, we under educated common folk, from figuring out what's really going on.

The common folk need to start ignoring the corporate Ph.D.s and the Keynesian economists. They have done nothing but lead us down the path of economic destruction. They have done so for decades. They promote systems that have proven to fail again and again. They do so in order to benefit themselves and become part of the elite class. Economics is not so much a natural science as it is a pseudoscience like psychology. It is not based so much on natural law as it is on manmade law. It does not study nature's processes so much as it studies human interactions. One does not need a degree of any kind in the subject in order to understand it, or even to understand macroeconomics, one just needs to be a little more involved and observant.

When push comes to shove, it seems to me that those involved in the system give advice to help maintain the power of the system. Their decisions are based more on political realities rather than scientific fact. Competition and the free market are the natural enemies of monopolies, whether business or government, central banking and central planning. It is natural for authoritarians, control freaks and those who wish to gain power to demonize free markets, sound money and anything else that might challenge their establishment. It is natural for those involved to delude themselves into thinking they are actually doing good and to adapt an elitist, snobbish attitude to justify their obviously harmful actions. After all, they are only human, like everyone else. They simply wish to be more relevant than anyone else, which is their nature I suppose.

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