A while back, Salon's Andrew Leonard had a pretty good take on Fed economist (and self-described "worker bee") Kartik Athreya's elitist rant "Economics is Hard. Don't Let Bloggers Tell You Otherwise".
Here's the solid core of Leonard's response:
"Do we expect advances in cell-biology to be immediately accessible to anyone with even a college degree?" he asks plaintively.
But here is where Athreya makes a serious misstep. The science of cell biology is by no means monolithic, but there is a pretty good consensus about what constitutes scientific truth for the bulk of the field....
The same is demonstrably not true for economics. Nobel Prize winners disagree on the most basic points, such as: what's the proper role of fiscal and monetary policy during a recession? Does the minimum wage or illegal immigration hurt or help employment? Economists disagree. What impact does regulation have on the economy? Economists disagree. Yes, economics is hard -- so hard that even economists with fancy degrees don't appear, to the layman, to know what the heck is going on.
This wouldn't be such a big deal if weren't for the nagging little problem that economic policy is something we expect governments to do. We don't expect Congress to cure cancer, but we do expect our leaders to do their best to avoid inciting Depressions and bank panics and devastating trade wars.
Athreya's circle the wagon's defense raises a valid point - economics is too important to leave to just anyone.
Especially economists.
Towards that end, and to further illuminate the discussion our Federal Reserve researcher began, I suggest the following questions be used for all economic PhD candidates as part of their qualifying exams: ....
• Nobel Laureate Joseph Stiglitz wrote: "The Chicago School [of economics] bears the blame for providing a seeming intellectual foundation for the idea that markets are self- adjusting and the best role for government is to do nothing." Discuss the intellectual errors of The Chicago School, from Milton Friedman forwards....
• Joan Robinson of Cambridge University: "The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists." What did she mean by this? ....
• John Kenneth Galbraith: "We have 2 classes of forecasters: Those who don't know... and those who don't know they don't know." Please explain what Galbraith's statement means in the context of Wall Street economists....
• A Federal Reserve researcher recently wrote: "I still feel ill at ease with my grasp of many issues, and I am fairly confident that this is not just a question of limited intellect." How would you explain the Dunning-Kruger effect to this person? What does Dunning-Kruger mean in practical terms to the work of economists?
• Statistician George Box said, "Remember that all models are wrong; the practical question is how wrong do they have to be to not be useful." Discuss.
Why bring this up now? Isn't this bruhahaha receeding rapidly in the rearview mirror? Well, yes, but...
