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Mainstream Economics: Cult of Witch Doctors

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March 11, 2011 – Comments (25)

Following the terrible tragedy in Japan (we all wish them the best in rebuilding their shattered lives), it took less than 24 hours for one of the biggest dipsh*t witch doctors to make a complete a** of himself.

(HT to LRC

Another Austrian Economist prediction comes true:

Posted by Manuel Lora on March 11, 2011 02:09 PM

Sadly, I predict that by the end of the day, some MSM “economist” or “analyst” will say that the earthquakeis “good for the economy.” Stupid of course. Disasters are disasters

Posted by Manuel Lora on March 11, 2011 02:46 PM

I was right:

"The natural disaster of a tsunami could actually provide a temporary boost to the global economy." - Larry Summers

Larry Summers, former director of President Obama’s economic council and a former head of the World Bank, said rebuilding could temporarily boost the Japanese economy.

More (if you can stand it), here.

Bastiat weeps time and time again. 

Verdict

You may ask how in the world such a giant dufus could ever rise to prominence in the academic/political economic community (Summers was also the President of Harvard and nearly bankrupted the school.)

(After all, how can one be the head of the World Bank and not know the Broken Window Fallacy?  I mean, really. No, really. Seriously. How the f**k does this happen?) 

The answer is because mainstream economics is a cult of witch doctors.  Among the witch doctors it is far more important to justify your nonsensical medicinal recipes than it is to actually treat the patient.

Hence, the bigger the t*rd, the higher he'll rise.  

David in Qatar 

 

25 Comments – Post Your Own

#1) On March 11, 2011 at 9:37 PM, Valyooo (99.35) wrote:

Oh my f*$%king god I cannot stand this debate.

Why not break it down to a simpler, more relatable example.

I go to your house.  I chop off your feet with a machete and blow your house to pieces with a rocket launcher.  You hire construction and doctors to fix problems that wouldn't exist without this disaster.  Woohoo, you're so much better off now!

By the way, I read the state, very good stuff.

I have a question though, in a state of anarchy, how would crime be handled without jails?  Not saying our legal system is good, btw.

Sorry to constantly derail your theads like this, but I get sh!tted on in real life by everybody I try to discuss free markets with, so I have to turn to CAPS life.

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#2) On March 11, 2011 at 9:37 PM, Valyooo (99.35) wrote:

Oh my f*$%king god I cannot stand this debate.

Why not break it down to a simpler, more relatable example.

I go to your house.  I chop off your feet with a machete and blow your house to pieces with a rocket launcher.  You hire construction and doctors to fix problems that wouldn't exist without this disaster.  Woohoo, you're so much better off now!

By the way, I read the state, very good stuff.

I have a question though, in a state of anarchy, how would crime be handled without jails?  Not saying our legal system is good, btw.

Sorry to constantly derail your theads like this, but I get sh!tted on in real life by everybody I try to discuss free markets with, so I have to turn to CAPS life.

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#3) On March 11, 2011 at 10:19 PM, lquadland10 (< 20) wrote:

You are right David. Now where did we get Harvard. Just wondering the History of the School.

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#4) On March 12, 2011 at 12:29 AM, awallejr (85.54) wrote:

Wow Jordan shoes for $28 (from a double spammed spam in this thread  which presumeably will be deleted).

David that is just the way the US media is in general. They just love disasters. No fun reporting about how little puppies make people happy.

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#5) On March 12, 2011 at 12:43 AM, smartmuffin (< 20) wrote:

David,

I think a large part of this has to do with the media's seeming need to always present every single thing as if there are "two sides" in an effort to appear balanced.  When basic facts are allowed to be interpreted as opinions, then surely you can't have a news broadcast with nothing but people saying large-scale disasters are bad.  In the interest of fairness and balance, surely we need to give some airtime to someone proclaiming that earthquakes are good!

You see this all the time.  No matter how open-and-shut obvious something is, newspaper articles ALWAYS feel the need to present the viewpoint of some tin-foil hat wearing wackjob and treat it as equally valid so it doesn't seem as if they're "taking sides"

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#6) On March 12, 2011 at 2:45 AM, Valyooo (99.35) wrote:

@SmartMuffin

"Well Bret is not all bad, the AIDS epidemic breaking out like this will at least create some support for the price of latex"

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#7) On March 12, 2011 at 9:40 AM, whereaminow (< 20) wrote:

Valyooo,

By the way, I read the state, very good stuff.

I'm glad you liked it! If you want to take a look at a modern academic approach to anarchism from a non-libertarian, I highly recommend An Anarchist History of Upland Southeast Asia. It was not nearly as boring as it sounds.

I have a question though, in a state of anarchy, how would crime be handled without jails?  Not saying our legal system is good, btw.

The best guy on that topic is Robert Murphy. He loves going through those thought experiments and contemplating how things might work out if you removed the coercive monopoly. Here's an interesting discussion on it. 

It's not really my cup of tea. I've have read/listened to some of the anarchist ideas. I don't really care either way. I know that sounds weird, but let's do a quick thought experiment:

Let's go back to 1944. The war is nearing an end. The US has been on food rationing and price controls for a few years. Someone walks up to you and says "show me how food distribution is going to work if we remove the government monopoly and regulation."

It would be impossible for you to be specific. You can't say, "well fast food processes will lower the price of a meal. At first, they'll be mostly fatty foods, but you'll eventually be able to get a Subway sandwich at 6th and Lee street for less than 30 minutes of minimum wage labor pay."  Of course, you can't see the future, and neither can they.  That's why real change is so difficult.

Now, taking that same experiment, try to imagine that the US had been on rationing and price controls for 200 years. Then try to convince people that they need to let the market work in the distribution of food.  Calling you a wacko would probably be the nicest thing people would say.

but I get sh!tted on in real life by everybody I try to discuss free markets with, so I have to turn to CAPS life.

You're still in college right? Well, that's where they make the witch doctors, so don't sweat it. What field are you planning on going into?  I'm in the IT field, and libertarians outnumber statists by about 20:1 by my experience (the more technical, the more libertarian.)  And the statists generally keep their mouth shut or they'll have to spend the rest of their lives conceeding one untenable position after another.

David in Qatar

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#8) On March 12, 2011 at 9:41 AM, binve (< 20) wrote:

David,

That is un-f**king-believable. What a tool (as if Summers wasn't already a tool before).

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#9) On March 12, 2011 at 9:54 AM, whereaminow (< 20) wrote:

lquadland10,

You are right David. Now where did we get Harvard. Just wondering the History of the School.

Thanks. I never really thought about it. Curious now, though.

awallejr,

Wow Jordan shoes for $28 (from a double spammed spam in this thread  which presumeably will be deleted).

David that is just the way the US media is in general. They just love disasters. No fun reporting about how little puppies make people happy.

I know right? $28 is a steal =D

I guess. It's not too hard to find someone stupid enough to say what Summers said. You have most economists saying that World War II pulled us out of the Great Depression. Paul Krugman infamously said that 9/11 would be a temporary boom for the economy. It's total nonsense of course, but they truly believe it.  I just find it amazing that you can rise to such a high level and be so respected and yet be such a total dipsh*t. Larry Summers is a complete and total dipsh*t.

smartmuffin 

I think a large part of this has to do with the media's seeming need to always present every single thing as if there are "two sides" in an effort to appear balanced. 

I think that's a great point. Unfortunately, the mainstream media's idea of two sides is the range of opinion from Mitt Romney to Barack Obama.  That little sliver is the allowable area of discussion on the news.  Everything outside of that is forbidden.  And so Americans waste their lives arguing the little details of difference between the two parties without noticing that in the big picture there is no fundamental difference between a Romney and an Obama.

David in Qatar

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#10) On March 12, 2011 at 10:54 AM, whereaminow (< 20) wrote:

binve,

That is un-f**king-believable. What a tool (as if Summers wasn't already a tool before).

You know what's scary? You have probably forgotten more economics than Larry Summers knows, just studying on your own in sheer intellectual curiosity. And yet, no one in power is going to ask Binve's opinion while a retard like Summers was selected as Obama's top economic council.

Let's all let that sink in for a moment.

David in Qatar

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#11) On March 12, 2011 at 11:18 AM, RonChapmanJr (90.28) wrote:

2 points: 

1.  I've said this before, Summers did not almost bankrupt my school.  :)

2.  The man is brilliant.  You don't go to MIT at 16 if you are an idiot.  We need to stop thinking that the people at the top are stupid cause they aren't.  Once we move past thinking they are dumb, we can get to the truth and understand why they say what they say and why they do what they do.  

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#12) On March 12, 2011 at 11:55 AM, whereaminow (< 20) wrote:

Hi Ron,

1.  I've said this before, Summers did not almost bankrupt my school.  :)

Well, he tried. (He couldn't even do that right. I kid. I have nothing against Harvard or the people who go there.)

2.  The man is brilliant.  You don't go to MIT at 16 if you are an idiot.  We need to stop thinking that the people at the top are stupid cause they aren't.  Once we move past thinking they are dumb, we can get to the truth and understand why they say what they say and why they do what they do.  

That leaves us with 3 options:

#1. Larry and the rest of the witch doctors are correct. Killing is good economics.

#2. Larry and the rest of the witch doctors are lying snakes that will say anything to earn favor among the ruling elite. I find this plausible, but doubtful. I know of few people that actually know enough to know they are living a lie. I can't imagine that they all end up in the economics profession.

#3. Larry and the rest of the witch doctors actually believe what they are saying. This is why I wrote that The Ben Bernank is the best man for the job.

You can be the smartest man on the planet. But if you spend half your life studying witch medicine and the other half trying to convince me that it works, I'm going to call you an idiot.

Here's wishing the brillinat Larry Summers one day gets a real job.

David in Qatar

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#13) On March 12, 2011 at 11:55 AM, Starfirenv (< 20) wrote:

+1 rec for Ron.  " We need to stop thinking that the people at the top are stupid cause they aren't.  Once we move past thinking they are dumb, we can get to the truth and understand why...".

  Would it be in anybody's best interest if the public's critical thought stopped at "How dumb is that?" Food for thought. Best

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#14) On March 12, 2011 at 11:56 AM, Starfirenv (< 20) wrote:

+1 rec for Ron.  " We need to stop thinking that the people at the top are stupid cause they aren't.  Once we move past thinking they are dumb, we can get to the truth and understand why...".

  Would it be in anybody's best interest if the public's critical thought stopped at "How dumb is that?" Food for thought. Best

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#15) On March 12, 2011 at 12:05 PM, whereaminow (< 20) wrote:

Hi Ron,

1.  I've said this before, Summers did not almost bankrupt my school.  :)

Well, he tried. (He couldn't even do that right. I kid. I have nothing against Harvard or the people who go there.)

2.  The man is brilliant.  You don't go to MIT at 16 if you are an idiot.  We need to stop thinking that the people at the top are stupid cause they aren't.  Once we move past thinking they are dumb, we can get to the truth and understand why they say what they say and why they do what they do.  

That leaves us with 3 options:

#1. Larry and the rest of the witch doctors are correct. Killing is good economics.

#2. Larry and the rest of the witch doctors are lying snakes that will say anything to earn favor among the ruling elite. I find this plausible, but doubtful. I know of few people that actually know enough to know they are living a lie. I can't imagine that they all end up in the economics profession.

#3. Larry and the rest of the witch doctors actually believe what they are saying. This is why I wrote that The Ben Bernank is the best man for the job.

You can be the smartest man on the planet. But if you spend half your life studying witch medicine and the other half trying to convince me that it works, I'm going to call you an idiot.

Here's wishing the brillinat Larry Summers one day gets a real job.

David in Qatar

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#16) On March 12, 2011 at 12:15 PM, ETFsRule (99.94) wrote:

2 points:

1. You said: "Larry and the rest of the witch doctors are correct. Killing is good economics."

Summer never claimed that killing is good economics. He also never said that the long-term economic effects of the tsunami would be positive.

2. It's absurd to claim that Summers speaks for all mainstream economists. I generally agree with mainstream economists, but I disagree with what Summers said.

I could just as easily take a stupid quote from Glenn Beck and claim that he speaks for all libertarians.

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#17) On March 12, 2011 at 12:17 PM, ETFsRule (99.94) wrote:

Oops, typed Summer instead of Summers. You know what I meant.

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#18) On March 12, 2011 at 12:46 PM, whereaminow (< 20) wrote:

Hi ETFs,

Summer never claimed that killing is good economics. He also never said that the long-term economic effects of the tsunami would be positive.

What he said was a classic broken window fallacy, whether he was speaking of long-term or short-term effects. If I wasn't so lazy, I'd pull up similar quotes from other economic experts concering WWII, Hurricane Katrina, 9/11, and on and on. This is pretty much the standard line.

2. It's absurd to claim that Summers speaks for all mainstream economists

He doesn't speak for them. He's among the most revered of them. I've heard enough of these guys say the same exact thing and I felt like picking on Larry. I'm having fun.

I could just as easily take a stupid quote from Glenn Beck and claim that he speaks for all libertarians.

You certainly could. I don't know how seriously it would be taken.

It's sad. If you take away economic malarkey, liberals and libertarians agree on many issues.

David in Qatar

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#19) On March 12, 2011 at 1:24 PM, RonChapmanJr (90.28) wrote:

David, ever seen the "The Usual Suspects"?

I disagreed with your post on BB for the same reason.  These guys are not stupid, they are not making mistakes, they are lying.  The average American does not need to hear that these guys are incompetent, they need to hear that they are doing these things on purpose.  Saying that BB didn't know that subprime wasn't contained is very different than saying that he did and purposefully covered it up.  Thinking that BB keeps interest rates low without knowing the consequences doesn't ignite the same fire if we believe that he knows what he is doing and does it anyway.

Here's my point.  If we keep going around saying that the ruling elite make bad decisions because they are stupid and inept we will be less likely to make the necessary changes in the system.   Knowing that they are destroying this country on purpose clarifies what our response should be. 

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#20) On March 12, 2011 at 1:43 PM, whereaminow (< 20) wrote:

Ron,

David, ever seen the "The Usual Suspects"?

Fantastic movie.

Like I said, it's certainly plausible. Let's say that they are lying and know exactly what they are doing.  Can I still call them idiots for destroying the country?

(Thing about me: I love the word "idiot." I use it all the time. A friend has a recording of me saying "idiot" and it plays as his ringtone when I call. "Idiot. Idiot. Idiot. Idiot"  It's great, except that it kind of makes it sound like an idiot is calling. Which would also be true.)

David in Qatar

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#21) On March 12, 2011 at 3:17 PM, Slider08 (44.54) wrote:

Heh, a blog on here was arguing disaster as economically beneficial as well. I'm highly amused that That Which is Seen, and That Which is Not Seen has recently been linked twice on caps.

In the department of economy, an act, a habit, an institution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause - it is seen. The others unfold in succession - they are not seen: it is well for us, if they are foreseen. Between a good and a bad economist this constitutes the whole difference - the one takes account of the visible effect; the other takes account both of the effects which are seen, and also of those which it is necessary to foresee. 

It seems that people who try to argue that disasters are good are trying to follow the chain of events, but they're just not following them all the way through.

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#22) On March 12, 2011 at 5:53 PM, checklist34 (99.69) wrote:

but the disaster could pay some economic activity forward. 

say, for example, that companies or governments take out some type of debt or reach into reserves to pay for repairs, rebuilding, etc.  No doubt that those reserves would then at some future time be less and/or that debt will represent loss to spending/activity at some future time.  

But for the current, it could result in higher activity.  

And higher current activity should tend to lead to higher future activity to some extent as well, as profits from current activity are invested and so forth. 

We aren't paying for our pane of glass by robbing the shoemaker, we are paying for our pane of glass by robbing the future.  

And it is, in fact, a net victory to pay for that pane of glass (in this situation of debt or reserves, and not alternate-purchase) today if todays increased activity leads to some amount of ongoing growth reinvestment etc.  

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#23) On March 12, 2011 at 5:55 PM, checklist34 (99.69) wrote:

this isn't a keynesian or austrian or polynesian or tamarackian thought, just a checklistian one made over the last 3 minutes by pondering the possible outcome.

so dissenters shall blame only me, via as much insult as possible, if they please.

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#24) On March 12, 2011 at 6:02 PM, whereaminow (< 20) wrote:

check,

see here.

What the checklistians (=D) are ignoring is that in order to bring about this increased economic activity, billions of dollars of capital was destroyed. So there is no short-term or long-term economic benefit.

David in Qatar

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#25) On March 13, 2011 at 3:43 PM, ChrisGraley (29.65) wrote:

If someone blew up your car and since you had no insurance, you went into debt to buy another one, did you suffer an economic loss or an economic gain?

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