The quote of the day comes from Rob Smith at RealClearMarkets stated as “Rob’s Rule”:
The more celebrated the expert, the more likely he is to be a self-aggrandizing, bloviating fool.
His target is economics and, while I agree with some of his observations, I disagree with others. I agree with his observation that economics is a behavioral science wholeheartedly. I would add that I believe the move towards econometrics that really began to gain steam about 50 years ago was a misstep. Most of what we know about economics was already known about 200 years ago and for good reason.
Economics is not a predictive science like physics; it’s a descriptive one like anthropology much as economists hate it when I say that. No economist can tell you what the stock price for XXX Corp. will be two weeks from today or what the full range of secondary effects for any given government policy will be. They can be useful in providing the broad contours, though. There’s no real money in broad contours.
But I can predict stock prices will rise for the company Biden chooses to build three advanced chip plants and finance with 300 Billion US dollars.
Who? Who? Who?