Economists in the Media

I am quoted on how economists are portrayed in the media:

It is the best of times. It is the worst of times. It is not uncommon, for example, to see critiques of economics in the media which are about as sophisticated as saying “look at those silly physicists who think that a bowling ball and a feather fall at the same rate.” Even people who should know better like David Suzuki say ridiculously, obtuse things when it comes to economics–perhaps for ideological reasons.

At the same time, the quality of the coverage of economics in the media is often excellent and has never been better. Greg Ip, David Leonhardt, Catherine Rampell, Adam Davidson, Stacey Vanek Smith, Cardiff Garcia, Megan McArdle all do superb economic commentary and reporting not just about the economy but about economics. And those are only the people off the top of my head, I could name many more.

The public also has access to top economists through the blogs and social media. I would count Paul Krugman, Tyler Cowen, John Cochrane, and Jeniffer Doleac in this category.

While some people claim that economics is out of touch or obsolete, economics passes the market test. Economists have never been more in demand. Designing new types of markets is a big part of the internet economy and computer scientists, followed by economists, are the leaders in this field. Google and Facebook run billions of dollars of auctions using what was once an obscure economic theory (Vickey-Clarke-Groves auctions). Google, Facebook, Uber and Airbnb all hire economists to better understand data and design new economic mechanisms. Even some online games like Eve Online are hiring economists to help to run virtual economies–one such economist, Yanis Varoufakis, went from a virtual economy to a real economy when he became Greece’s Minster of Finance.

If you want to understand the world and make it a better place there is no better degree than an economics degree because it is so versatile.

Comments

Lawyers and Meth cookers have never been more in demand either, does that mean does that mean they're a good thing because they pass the market test?

Economists that appear on TV tend to be "politicians". They can't stop themselves from applauding Obama's failed efforts and results and from criticizing Trumps methods and successes. They should be above politics and stick to economics.

They also feel compelled, often because they are asked, to make predictions. Nothing destroys your reputation like a Youtube video of you making a prediction that two or three years later is 180 degrees out of whack. Especially when the political motivation is dripping from your lips while you do it (Krugman for example). Stick to probabilities and try to divorce yourself from your political views.

Krugman is chump, a Barker for the Dems. He has no credibility anymore - only the left pays any attention to him because he says what they want to hear. All that confirmation bias sure feels good.

The mention here is a bit funny, given the previous post.

If you look at the comments on Krugman's columns, it's striking how few seem to come from anyone with a bit of education in economics.

Economics is an excellent college major no matter what occupation one intends to pursue. I'm a lawyer, and the main goal of law school is to get students to think like a lawyer (which is to say critically). My undergraduate degree was in economics, which is an excellent preparation for law school because, like law, economics is as much about instilling a way of thinking (i.e., critically) than learning this or that theory. Good lawyers, like good economists, can analyze an issue or problem down to its essence; what's sometimes called habits of mind. Of course, lawyers are paid to be advocates. And so it has become for economists. Whether that's a good thing for economics is debatable, but I can hardly complain about it since advocacy is what I do. Habits of mind.

So you have studied in (trained in) two fields that are very likely to result in a raising of critical thinking skills. Why do you persist in embedding into most posts a sophomoric jab at Trump, instead of exercising those critical skills? One would think, as with Krugman’s similar jabs, that Trump can only do wrong. He is certainly among the more fallible of our recent politicians, but still, 100% wrong and idiotic? Every time?

Trump isn't 100% wrong and idiotic but more like 97% wrong and idiotic. Trump absolutely deserves the all the rebuke and scorn thrown his way. That and he raised my taxes, so I will no longer vote GOP as long as Trump is in the White House. I just don't give a crap anymore.

Every time? Close enough to be a good heuristic. And he is doing so much damage that even if he is sometimes right - when? - the overall impact is disastrous.

Yes and no. Most of economics rests on an extremely reductionist model of human behavior. Which makes economics a terrific field for high-functioning autists, and likely nudges even normal people a bit toward autism.

Yes I'm aware of the advantages of this reductionist approach — Milton Friedman's parable of the world champion billiards player, etc.

Economists just don't get no respect in the media ... and that MSM is normally so great at truth and incisive factual reporting (?)
But of course Economists themselves are so very humble and self effacing.

"If you want to understand the world and make it a better place there is no better degree" ... than engineering, in its many disciplines.

Precisely what have Economists done to make the world a better place in past 75 years ??

Once you've learned enough engineering you figure out the just about anything is possible. The question then becomes, is it worth it? At that point the engineering problem turns into an economic problem.

True! Brin, Gates, Zuck, and Bezos et al ran their ideas by economists before they took a step.

Let's not forget the courageous predictions of all those economists before the great recession and subsequent stagnation.

Like the Minutemen, they are right there when you need 'em.

As evidenced by all those economists who thought California's high speed rail was a great idea.

A big problem with economics is that too many economists think that economics is some sort of master key that allows them to understand all sorts of other fields. So you get economists making predictions about the future of automation and robotics, or making a detailed prediction of what will happen when a highly technical industry is taxed or subsidized, or proclaiming on the economic feasibility of high speed rail, or giving precise to-the-decimal point predictions of how 780 billion dollars thrown scattershot at the economy will affect the financial decisions of three hundred million people engaged in complex business transactions, and precisely how that will translate into gross domestic product, a simple emergent property defined by economists and which serves to summarize an incredibly complex adaptive system no one really understands.

A big problem with economics is that too many economists think that economics is some sort of master key that allows them to understand all sorts of other fields.

That is certainly on view at this blog.

>As evidenced by all those economists who thought California's high speed rail was a great idea.

people who use the phrase "all those economists" are nearly always completely incapable of naming even one economist in their supposed group. as is of course true here, given the low quality of comments on this site.

> The public also has access to top economists through the blogs and social media. I would count Paul Krugman

Am I the only one who finds Krugman to be a partisan parrot? I've read a few of his columns and he just repeated noise from the echo chamber without a single original thought. I briefly thought he was a 20-something journalist.

Everyone knows that Paul Krugman is a partisan parrot. However some people don't point this out, because either (1) they are also partisan parrots or (2) they are economists and are legally bound to never, ever say a bad word about their Monkey God who managed to become a millionaire by being a partisan parrot with an econ degree.

While I'm here, how about Alex ripping into economists who say ridiculously absurd things for partisan reasons, and then praising Paul Krugman? Do you think there is a reason no one takes economists seriously?

It's also not clear whether Alex has any idea that bowling balls and feathers do not fall at the same rate... unless one particular condition is met, and it requires a lab. Not a good choice for an analogy there, buddy.

Someone once broke into my wife's car and made off with ... her bowling ball! Now I know we should have rounded up all the physicists

You are not alone - he has become a useful idiot of the left.

Amazing how many comments there are insulting Krugman, and how few pointing out his errors.

Just mention the name and you get an outpouring of hate from people who don't like what he says, yet have no rebuttals to offer.

Well, these are meta-comments you're objecting to. But your comment is fair, so I'll oblige you with something technical.

Krugman has pointed out many times that now is a super time for the government to buy and build things ("invest in infrastructure"), because the long term interest rate (ie the cost of capital) is historically low — close to zero in real terms. And yet he overlooks the fact that even at a zero cost of capital, a negative rate of return project (California "High—Speed" Rail for instance, or Keynes' proverbial dig-holes-and-fill-them-in) is still not a win.

I could prove this for you with integrals but my browser seems unable to come up with the right fonts.

No need. Nor, by the way, is it necessary to use integrals to prove this, which is hardly a subtle technical point, so I'm not impressed.

Of course what you can't prove, with integrals or otherwise, is that these projects would have a negative return. Citing one example is nonsense.
And you overlook the argument that, not now but during economic downturns, stimulus is useful regardless.

It sounds like you think Keynes was a fool. I disagree, but even if you do think so I hardly think that makes Krugman a "partisan parrot."

Most of the parroting I see going is among his critics.

And what of Krugman's opinion piece in the New York Times back in November of 2016, wherein he claims, and I quote:

"It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover?
Frankly, I find it hard to care much, even though this is my specialty. The disaster for America and the world has so many aspects that the economic ramifications are way down my list of things to fear.
Still, I guess people want an answer: If the question is when markets will recover, a first-pass answer is never."

Clearly, Trump's accession to the presidency is incalculably more damaging than the Civil War, Holodomor, and the Chinese Cultural Revolution put together—this is just clinical fact, and certainly not the unintentionally hilarious pandering of a partisan parrot.

For what it's worth, I would prefer the office of the presidency be held by someone with dignity, class, a fine command of language, and ruthless intelligence—but I don't let my wishes interfere with my evaluation of reality.

Gee. An inaccurate prediction about the stock market!! Only an imbecile could produce such a thing.

Stretch much?

Clearly, Trump's accession to the presidency is incalculably more damaging than the Civil War, Holodomor, and the Chinese Cultural Revolution put together—this is just clinical fact, and certainly not the unintentionally hilarious pandering of a partisan parrot.

I find nothing in the quote you cite that comes anywhere near making that kind of claim. He says the election of Trump is a disaster that will affect many things besides the stock market and the economy. That's a reasonable statement, and actually a fairly accurate prediction.

Oh. And where did you get that particular quote? Are you an avid reader of Krugman's columns, or did you find it on some nutjob web site?

I think it is you, not Krugman, who is the parrot.

You're not a very good troll, are you?
"I find nothing in the quote you cite that comes anywhere near making that kind of claim."
He says "If the question is when markets will recover, a first-pass answer is never". Markets have recovered from the horrific events I mentioned. The conclusion is obvious.

"Oh. And where did you get that particular quote?"
It is stated in my post very conspicuously at the beginning (though I suppose the New York Times can sometimes be called a nutjob website). You argue in bad faith and deliberately ignore what's right in front of you. Pathetic.

In fairness to Krugman, he's pretty high upstream of what finally bounces around the left-wing echo chamber; he's an innovator.

Krugman was the first major pundit to flatly call George W Bush a liar. That's easy to forget, since now we can look back on so many others who soon piled on.

Krugman was projecting. That's what progtrash do.

And yet, I think the practice of economics is too often politics in drag, and becoming anachronistic at that.

Robert Shiller recently pondered why urban housing is becoming unaffordable.

Trade imbalances exacerbate the problem. Canada, Australia, New Zealand, Great Britain, the large swathes of US.

https://www.newyorkfed.org/medialibrary/media/research/staff_reports/sr541.pdf

And we have wage stagnation in the developed world.

Exploding house prices and dead wages.

What are economists most aggrieved about?

"Free trade."

1000 economists recently signed a public letter "invoking the Great Depression" and Smoot-Hawley in criticizing Trump and his wrinkles in trade.

Yes, it was toothless Smoot-Hawley and not tight money that caused the Great Depression.

If dead wages and soaring housing cost are the norm, should people believe in free enterprise?

Where are the great American economists on property zoning?

It is profession becoming willfully irrelevant.

Smoot and Hawley just sound like two dead white patriarchal males we should blame for something, anything. Like Taft and Hartley

We do blame them for something. A big thing. The cruddy tariffs that bears their name which made the Great Depression worse.

The difficulty with economics (as opposed to the natural sciences) is that it's dependent on human behavior, which is often unpredictable and increasingly subject to manipulation. Indeed, behavioral economics my soon dwarf all other economic analysis. Firms wouldn't spend billions analyzing big data if that weren't true. Here's the paradox: analyzing big data to predict economic behavior makes sense only if coupled with manipulation (behavior is unpredictable because it's subject to many influences). In other words, economics is rapidly becoming the study of manipulation.

TC and AT haven't posted recently about their support for Open Borders; surely that's a timely topic on which economists can offer insight. They could just re-post their earlier blog entries.

Adwords doesn't use VCG

http://blogs.cornell.edu/info2040/2012/11/01/9331/

Google uses VCG for contextual ads. https://www.aeaweb.org/conference/2014/retrieve.php?pdfid=494

maybe you should click through farther to understand why they don't use VCG for search ads: https://www.quora.com/Why-does-Google-use-the-Generalized-Second-Price-auction-to-sell-search-ads-instead-of-Vickrey-Clark-Groves/answer/Ron-Berman

GSP is faster (no computation of leave-out counterfactual equilibria) and IIRC there are some guarantees on approximate efficiency.

Part of the problem with the public perception of economists can be laid at the feet of our terrible media. Russ Roberts has pointed out that he will sometimes get a call from a journalist looking for an economist who will opine on the ramifications of some event. The good, thoughtful economists say, "Well, it's a complex subject, and we don't really understand the underlying forces, which makes this an impossible thing to predict."

So of course the headline the next day is, "Economists say the effect of bill X is unpredictable", right? Of course not. They hang up on Russ, and call the next economist in their Rolodex. Repeat until they find someone willing to say, "My model shows that Bill X will reduce GDP by .42% over ten years!" Yay, now the journalist has a hook for the article, "Bill X to crash economy, says prominent economist!"

The economists willing to roll the bones and make baseless predictions get the headlines, which means they also get audiences for their books, podcasts, speaking engagements. And hey, maybe even one day they can become an advisor to a president and use their magical prediction powers to control policy.

The reason they still get asked is the same reason fortune tellers and astrologers stay in business. We have a powerful desire to know what the future holds, and these people are willing to fill that desire. And, like astrologers, if they make enough predictions they're bound to get some right, and those are the ones that everyone talks about and which form your reputation. The guy who predicts seven out of the next two recessions still gets credit when a recession hits.

... so NOBODY here is able to cite a concrete example of: "... what have Economists done to make the world a better place in past 75 years"

... not difficult to understand why even proud economists cannot supply a factual answer to that simple question

Sorry, but the phrases "Megan McArdle" and "superb economic commentary" do not belong in the same sentence except under the most unusual of circumstances.

Evidently still butt-hurt that she's been right at every turn about the Obamacare mess.

Economics is a lot like philosophy. It’s a great game to let college students play with to prepare them for life. Unfortunately, while philosophy professors understand they are just teachers of this game, economists are often mistaken for people who can do more than play a silly little game that bears little resemblance to the real world.

Untrue I think. Where is there a foundational fundamental principle in philosophy that compares to “supply and demand”? No, there is not. Certainly not realism or “the real world”.

Because philosophy relies on the counter intuitive and on speculation, it can’t offer anything as insightful as “opportunity cost” or “externality”.

what is a ‘paul krugman’?

Economists are like politicians since, as Nassim Taleb
says, they have no "skin in the game". What they say
can affect the lives of many but they are never held
accountable. How many economists would enter a
Phil Tetlock predictions tournament. My guess is very
few, since as Tetlock says about people like Thomas
Friedman, why risk being proven wrong when they can just
continue to sell books, write columns and give speeches.

Taleb's skin in the game is that you sell more books peddling lurid disaster scenarios. That close to flat nothing you were anticipating came to pass is something that your acolytes forget.

Adam Davidson? Megan McArdle?

They're hacks, just like you, fully bought and paid for.

If economists are so 'useful', where were they in 2007?

This is the only guy who got it right:

https://ig.ft.com/sites/business-book-award/books/2008/longlist/the-trillion-dollar-meltdown-by-charles-morris/

"A quarter century of free-market zealotry that extolled asset stripping, abusive lending, and hedge fund secrecy will go down in flames with it"

Sound familiar, Alex? All the BS ideas you & Cowen obsequiously advance for your benefactors.

Punch line: Charles R. Morris isn't an economist.

He's a lawyer.

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