Narcissistic Economics (1 Viewer)

[Geoist]

A thoughtful analysis of economics. I couldn't agree more with Foldvary on this one.

Narcissistic Economics
by Fred E. Foldvary, Senior Editor, 1 July 2013

“Narcissism” derives from the ancient Greek myth of Narcissus, who fell in love with his image reflected in water. Excessive self-love exists in science also, such as in economics. If one is so fixated on one’s reflection that one cannot do anything but keep looking, eventually one will weaken, plunge into the water, and die.
So too narcissistic economic policy weakens economies world wide. Economic narcissism causes the troubles we see worldwide: depressions, excessive debt, high unemployment, environmental destruction, and poverty. People protest, but the way of prosperity they know not, as they are led by narcissist economists who will not escape their shells.

Most economists believe in one school of thought to the exclusion of others. The mainstream school of thought is neoclassical. Other schools include the Marxist, Austrian, Georgist, institutional, New Classical, Monetarist, Feminist, Binary, Keynesian and post-Keynesian. The unwillingness to examine and merge with other schools is unscientific and narcissistic.

 

[Mach]

The unwillingness to examine and merge with other schools is unscientific and narcissistic.

I thought for a moment you were implying that economics is a thoroughly scientific endeavor

 

[CalGun]

Is it narcissistic to forget obamanomics?

A thoughtful analysis of economics. I couldn't agree more with Foldvary on this one.

Narcissistic Economics
by Fred E. Foldvary, Senior Editor, 1 July 2013

“Narcissism” derives from the ancient Greek myth of Narcissus, who fell in love with his image reflected in water. Excessive self-love exists in science also, such as in economics. If one is so fixated on one’s reflection that one cannot do anything but keep looking, eventually one will weaken, plunge into the water, and die.
So too narcissistic economic policy weakens economies world wide. Economic narcissism causes the troubles we see worldwide: depressions, excessive debt, high unemployment, environmental destruction, and poverty. People protest, but the way of prosperity they know not, as they are led by narcissist economists who will not escape their shells.

Most economists believe in one school of thought to the exclusion of others. The mainstream school of thought is neoclassical. Other schools include the Marxist, Austrian, Georgist, institutional, New Classical, Monetarist, Feminist, Binary, Keynesian and post-Keynesian. The unwillingness to examine and merge with other schools is unscientific and narcissistic.

 

[imagep]

Is it narcissistic to forget obamanomics?

I dunno, so I had to look up the definition...

"A buzzword used to describe the economic philosophies of United States President Barack Obama, generally defined as the slow and steady recovery from the recession caused by Bushonomics."

Hmm, is it narcissistic to forget Bushonomics?

 

[CalGun]

No that is selective reasoning and short shortsightedness topped off with he's not in office any more narcissism.

I dunno, so I had to look up the definition...

"A buzzword used to describe the economic philosophies of United States President Barack Obama, generally defined as the slow and steady recovery from the recession caused by Bushonomics."

Hmm, is it narcissistic to forget Bushonomics?

 

[imagep]

No that is selective reasoning and short shortsightedness topped off with he's not in office any more narcissism.

Hey, I didn't make that stuff up. It's the official definition that I found in my copy of Websters. If it was printed in a book, or the internet, or just dreamed up in my own wee brain, it's got to be true!

Anywho, does no longer being in office somehow make the mis-doings that one did while in office go away? So like in 3 more years, when someone else is in office, does that mean that Obama did a fantastic job, our economy was excellent and no one can critique him for any shortcomings or failures?

 

[specklebang]

Whatever the "system" we are using now, no matter how bizarre it looks, seems to have worked reasonably well. What influences do you feel have been overlooked? I assume that's what you want to discuss as opposed to the mental state of economists.

We had a huge bubble and then printed our way out of it. Who knew? I never would have thought this was possible. Create trillions out of thin air and prop up the system? And yet....

A thoughtful analysis of economics. I couldn't agree more with Foldvary on this one.

Narcissistic Economics
by Fred E. Foldvary, Senior Editor, 1 July 2013

“Narcissism” derives from the ancient Greek myth of Narcissus, who fell in love with his image reflected in water. Excessive self-love exists in science also, such as in economics. If one is so fixated on one’s reflection that one cannot do anything but keep looking, eventually one will weaken, plunge into the water, and die.
So too narcissistic economic policy weakens economies world wide. Economic narcissism causes the troubles we see worldwide: depressions, excessive debt, high unemployment, environmental destruction, and poverty. People protest, but the way of prosperity they know not, as they are led by narcissist economists who will not escape their shells.

Most economists believe in one school of thought to the exclusion of others. The mainstream school of thought is neoclassical. Other schools include the Marxist, Austrian, Georgist, institutional, New Classical, Monetarist, Feminist, Binary, Keynesian and post-Keynesian. The unwillingness to examine and merge with other schools is unscientific and narcissistic.

 

[imagep]

Whatever the "system" we are using now, no matter how bizarre it looks, seems to have worked reasonably well. What influences do you feel have been overlooked? I assume that's what you want to discuss as opposed to the mental state of economists.

We had a huge bubble and then printed our way out of it. Who knew? I never would have thought this was possible. Create trillions out of thin air and prop up the system? And yet....

I have never understood why virtually any moron on the street, who has never studied economics or finance or monetary policy, will claim that he knows more about such, than the PhDs at the fed who are considered to be at the top of their field.

Yet, most of us will accept what our doctor or attorney tells us, and we do so without question, often with terrible results.

A tea party facebook buddy of mine constantly posts how the fed is messing up our economy and how they "don't know nothing". I challenged him on this idea by asking him why he thinks that he knows more about economics than professional economists do, and he just said that they "don't have any common sense". I totally understand that knee-jerk off-the-cuff answer, but common sense is the consensus opinion of a group of people who have no knowledge about whatever subject is being discussed at the time. I think I will trust people who know a great deal about a particular subject, than the opinion of someone who is ignorant - any day of the week.

 

[CalGun]

And contrary if in 3 years we've joined the 3rd world status of Argentina will it still be blame Bush? All that will take is the world deciding they don't like the dollar any more as a reserve currency and we're toast.

Since the central banks in the US upped their (on paper) reserves from about 100 billion to 2.7 trillion in the past two years I think a new bubble is upon us. Yes there are some positive indicators but its not all rosey out there - not by a long shot. We are far too dependent on what happens in the world with the dollar, and as the world grows more and more disheartened with us for many reasons that risk is significant.

No I don't ignore the issues Bush created / got labeled for creating. If I were him I'd have suspended tax cuts after 911 to try and keep our budget as close to level as possible but I will admit to a state of 'extremism" in my view. I hate debt. I don't personally have any, don't think its good for our nation, and view it as the greatest risk to national security there is - today.

Hey, I didn't make that stuff up. It's the official definition that I found in my copy of Websters. If it was printed in a book, or the internet, or just dreamed up in my own wee brain, it's got to be true!

Anywho, does no longer being in office somehow make the mis-doings that one did while in office go away? So like in 3 more years, when someone else is in office, does that mean that Obama did a fantastic job, our economy was excellent and no one can critique him for any shortcomings or failures?

 

[specklebang]

I don't think the OP is moronic. It initiates a discussion about the way that economists view structural monetary systems. I wouldn't be surprised if alternate structures had something to offer that would improve on, rather than replace the current circumstances.

I have seen our government make poor choices so I know they are not infallible either. I also believe that there are political factors that enter some of the decision making process and that these influences are not necessarily to the benefit of all. I don't think my doctor is always right and I don't think the government is always right. I research my medical issues so I can be an informed consumer. Obviously, I can then influence mty medical outcome.

The same applies to discussion of economics. You can not influence the outcome. But it's still healthy to be an informed consumer and that's the reward of internet discussion. True, if an opinion consists of "it's bad" and doesn't say why or postulate an alternative, yes, it's worthless.

I have never understood why virtually any moron on the street, who has never studied economics or finance or monetary policy, will claim that he knows more about such, than the PhDs at the fed who are considered to be at the top of their field.

Yet, most of us will accept what our doctor or attorney tells us, and we do so without question, often with terrible results.

A tea party facebook buddy of mine constantly posts how the fed is messing up our economy and how they "don't know nothing". I challenged him on this idea by asking him why he thinks that he knows more about economics than professional economists do, and he just said that they "don't have any common sense". I totally understand that knee-jerk off-the-cuff answer, but common sense is the consensus opinion of a group of people who have no knowledge about whatever subject is being discussed at the time. I think I will trust people who know a great deal about a particular subject, than the opinion of someone who is ignorant - any day of the week.

 

[AlabamaPaul]

I don't think the OP is moronic. It initiates a discussion about the way that economists view structural monetary systems. I wouldn't be surprised if alternate structures had something to offer that would improve on, rather than replace the current circumstances.

I have seen our government make poor choices so I know they are not infallible either. I also believe that there are political factors that enter some of the decision making process and that these influences are not necessarily to the benefit of all. I don't think my doctor is always right and I don't think the government is always right. I research my medical issues so I can be an informed consumer. Obviously, I can then influence mty medical outcome.

The same applies to discussion of economics. You can not influence the outcome. But it's still healthy to be an informed consumer and that's the reward of internet discussion. True, if an opinion consists of "it's bad" and doesn't say why or postulate an alternative, yes, it's worthless.

There are too many wanting to make economics fit their desired policy outcome rather than first understanding how our economy works before trying to apply specific policies...

 

[imagep]

And contrary if in 3 years we've joined the 3rd world status of Argentina will it still be blame Bush? All that will take is the world deciding they don't like the dollar any more as a reserve currency and we're toast.

Apparently not. According to most on the right, Bush did no wrong, and the current president, no matter who it is, should accept full responsibility for whatever situation that he inherits. So I guess if a republican becomes our next potus, the third world status, if that is what we become, belongs to him, and Obama will have no blame.

However, I really don't see us moving towards a third world status. If anything, the third world is going to catch up with us.

 

[Geoist]

Sorry guys, forgot to post a link to the rest of the article

http://www.progress.org/2013/fold827.htm

 

[Geoist]

Whatever the "system" we are using now, no matter how bizarre it looks, seems to have worked reasonably well. What influences do you feel have been overlooked? I assume that's what you want to discuss as opposed to the mental state of economists.

We had a huge bubble and then printed our way out of it. Who knew? I never would have thought this was possible. Create trillions out of thin air and prop up the system? And yet....

...And yet we continue the speculative bubble. Boom and bust every 18 years. The price to pay for 'free market' capitalism.

 

[Geoist]

I have never understood why virtually any moron on the street, who has never studied economics or finance or monetary policy, will claim that he knows more about such, than the PhDs at the fed who are considered to be at the top of their field.

Yet, most of us will accept what our doctor or attorney tells us, and we do so without question, often with terrible results.

A tea party facebook buddy of mine constantly posts how the fed is messing up our economy and how they "don't know nothing". I challenged him on this idea by asking him why he thinks that he knows more about economics than professional economists do, and he just said that they "don't have any common sense". I totally understand that knee-jerk off-the-cuff answer, but common sense is the consensus opinion of a group of people who have no knowledge about whatever subject is being discussed at the time. I think I will trust people who know a great deal about a particular subject, than the opinion of someone who is ignorant - any day of the week.

I do agree. Put me in a debate with Paul Krugman, Milton Friedman, John M. Keynes, or any other major figure in economics and I guarantee I will lose. But we witness throughout history how some of the smartest men/women were woefully misguided/shortsighted on various issues. I think submitting oneself to only one particular school of thought is willful submission to groupthink.

 

[Geoist]

There are too many wanting to make economics fit their desired policy outcome rather than first understanding how our economy works before trying to apply specific policies...

And what better way to ignore the reality of economics than to focus solely on a single school of thought?

 

[specklebang]

Yes, we do seem to have been unable to retain the history of bubbles and our Fearless Leaders tend to allow and even encourage these bubbles for the short term economic gains that fall at the time of their administrations.

Can you lay out the 18 year cycle for me please? What years to you ascribe to the bubble tops. For example, I see the housing bubble as being 2005 and I consider that administration to have allowed and encouraged it. Oh, what good times we had and oh, how rich their friends became. 18 years earlier would be 1988. What bubble did we have in 1988?

...And yet we continue the speculative bubble. Boom and bust every 18 years. The price to pay for 'free market' capitalism.

 

[Geoist]

Can you lay out the 18 year cycle for me please?

The Complete History Of US Real Estate Bubbles Since 1800 - Business Insider



The Great 18-Year Real Estate Cycle | Cato Institute

Many studies have identified a land-price cycle of approximately 18 years in length that has occurred with striking regularity for nearly two centuries. Land values increase, leading to "irrational exuberance" that further stokes the overheated real estate market. Euphoria is followed by a sudden crash, wiping out vast amounts of asset value. Fred Harrison documented this process in his books The Power in the Land (1983) and Boom Bust (2007). Harrison correctly predicted the recessions of 1990 and 2008, as did Georgist economist Fred Foldvary. In the 1930s, Homer Hoyt documented this long-term trend in his One Hundred Years of Land Values in Chicago. (1)
The Boom/Bust Cycle

What years to you ascribe to the bubble tops. For example, I see the housing bubble as being 2005 and I consider that administration to have allowed and encouraged it. Oh, what good times we had and oh, how rich their friends became. 18 years earlier would be 1988. What bubble did we have in 1988?

2006 looks like the peak according to the chart. Previous peak was 1989.

 

[specklebang]

Thank you for the answer. I didn't know we were confined to real estate bubble andI just can't recollect 1988 as a bubble. I thought of the last bubble as the Telecom bubble which peaked around 1999.

So, I guess I'll hold on to my real estate until 2024. I'll be 91 by then. Good time to liquidate.

1973 - was that the big Japanese buy-in?

View attachment 67150200
The Complete History Of US Real Estate Bubbles Since 1800 - Business Insider


View attachment 67150201
The Great 18-Year Real Estate Cycle | Cato Institute

Many studies have identified a land-price cycle of approximately 18 years in length that has occurred with striking regularity for nearly two centuries. Land values increase, leading to "irrational exuberance" that further stokes the overheated real estate market. Euphoria is followed by a sudden crash, wiping out vast amounts of asset value. Fred Harrison documented this process in his books The Power in the Land (1983) and Boom Bust (2007). Harrison correctly predicted the recessions of 1990 and 2008, as did Georgist economist Fred Foldvary. In the 1930s, Homer Hoyt documented this long-term trend in his One Hundred Years of Land Values in Chicago. (1)
The Boom/Bust Cycle



2006 looks like the peak according to the chart. Previous peak was 1989.

 

[Geoist]

Thank you for the answer.

You are welcome.

I didn't know we were confined to real estate bubble andI just can't recollect 1988 as a bubble. I thought of the last bubble as the Telecom bubble which peaked around 1999.

Sorry, should have been more clear I was speaking of real estate bubbles.

So, I guess I'll hold on to my real estate until 2024. I'll be 91 by then. Good time to liquidate.

Well, occasionally you get an outlier like we experienced in the post-WWII years. But yeah, its generally pretty predictable.

1973 - was that the big Japanese buy-in?

Not sure if it was. I know there were several factors that helped trigger that recession (oil crisis, for example.)

Foldvary explains the impact of real estate on that one:

The next historical real estate peak in the U.S. would have occurred in 1943 had the 18-year cycle continued, but building was dampened by war measures. Price and rent controls, millions of men overseas, and a postponement of marriages reduced normal real estate demand. The historical U.S. real estate cycle was broken, and, there was no major post-war depression.

Indeed, there followed an unusually long period of smoothly rising real estate prices and construction. An old-fashioned real-estate boom finally developed, especially for apartments, from 1967 to 1972, coinciding with increased inflation. Baby boomers increased the demand for rental housing. Prices of apartment buildings were rising faster than their rents, but "investors didn't care ... they were buying into the rental property market in order to speculate on future price increases" (English and Cardiff, 1979, p. 43). The Tax Reform Act of 1969 had made rental property more attractive. Tax shelters used negative cash flow as a tax advantage. Real estate became a favored hedge against increasing inflation, the stock market having topped out. Real Estate Investment Trust (REIT) assets grew from $2 billion in 1969 to $20 billion in 1973. Commercial bank mortgage loans increased from $66.7 billion in 1969 to $113.6 billion in 1973 (p. 44).

Then vacancies began to increase. "With catastrophic swiftness, the money machine sputtered to a stop. The financial superstructure collapsed; the REIT industry faced bankruptcy" (p. 45). Interest rates were also increasing. Many REITs and developers went bankrupt. Apartment units begun dropped from their peak of 1,047,500 in 1972 to 268,300 in 1975 (p. 46). "More money may have been lost in the Apartment Crash that in any of the more celebrated crashes. But it remains an unheralded financial crisis" (p. 47). It was the worst recession in the U.S. since the 1930s.
The Business Cycle: A Geo-Austrian synthesis

 

[imagep]

View attachment 67150200
The Complete History Of US Real Estate Bubbles Since 1800 - Business Insider


View attachment 67150201
The Great 18-Year Real Estate Cycle | Cato Institute

Many studies have identified a land-price cycle of approximately 18 years in length that has occurred with striking regularity for nearly two centuries. Land values increase, leading to "irrational exuberance" that further stokes the overheated real estate market. Euphoria is followed by a sudden crash, wiping out vast amounts of asset value. Fred Harrison documented this process in his books The Power in the Land (1983) and Boom Bust (2007). Harrison correctly predicted the recessions of 1990 and 2008, as did Georgist economist Fred Foldvary. In the 1930s, Homer Hoyt documented this long-term trend in his One Hundred Years of Land Values in Chicago. (1)
The Boom/Bust Cycle



2006 looks like the peak according to the chart. Previous peak was 1989.

Those "cycles" seemed to vary from 7 years to as long as 44 years. I wouldn't exactly think that it is safe to bet on the next cycle lasting 18 years.

We could probably chart out anything, and then find peak points, average the number of years between peaks, and come up with some sort of magical frequency of events - that doesn't mean that we can predict the next event, outside of the huge deviation between historic events.

 

[Lakryte]

A thoughtful analysis of economics. I couldn't agree more with Foldvary on this one.

Narcissistic Economics
by Fred E. Foldvary, Senior Editor, 1 July 2013

“Narcissism” derives from the ancient Greek myth of Narcissus, who fell in love with his image reflected in water. Excessive self-love exists in science also, such as in economics. If one is so fixated on one’s reflection that one cannot do anything but keep looking, eventually one will weaken, plunge into the water, and die.
So too narcissistic economic policy weakens economies world wide. Economic narcissism causes the troubles we see worldwide: depressions, excessive debt, high unemployment, environmental destruction, and poverty. People protest, but the way of prosperity they know not, as they are led by narcissist economists who will not escape their shells.

Most economists believe in one school of thought to the exclusion of others. The mainstream school of thought is neoclassical. Other schools include the Marxist, Austrian, Georgist, institutional, New Classical, Monetarist, Feminist, Binary, Keynesian and post-Keynesian. The unwillingness to examine and merge with other schools is unscientific and narcissistic.

I would say the mainstream is Keynesian, with some neoclassical talking points thrown in.

 

[Gathomas88]

Whatever the "system" we are using now, no matter how bizarre it looks, seems to have worked reasonably well. What influences do you feel have been overlooked? I assume that's what you want to discuss as opposed to the mental state of economists.

We had a huge bubble and then printed our way out of it. Who knew? I never would have thought this was possible. Create trillions out of thin air and prop up the system? And yet....

Try to argue Keynesianism with an Austrian, or virtually any other school of economics with a diehard Keynesian, and you'll quickly see exactly what the OP's talking about.

I don't think I've ever met a more vicious, smug, hateful, or mean-spirited group of people than partisan economists. The sheer level of dogmatic fanaticism with which some of them approach their particular school could very well be said to rival the fervor of even the most insane of religious fundamentalists.

The whole thing strikes me as being more than a little silly and counter-productive given just how "soft" and imprecise a "science" economics truly happens to be when you get to the bottom of things. :roll:

That was the OP's point.

 

[Geoist]

Those "cycles" seemed to vary from 7 years to as long as 44 years. I wouldn't exactly think that it is safe to bet on the next cycle lasting 18 years.

The 44 years was due to post-WWII actions (see my quote from Foldvary for explanation). It is certainly an outlier and not representative of the general trend.

We could probably chart out anything, and then find peak points, average the number of years between peaks, and come up with some sort of magical frequency of events - that doesn't mean that we can predict the next event, outside of the huge deviation between historic events.

Fred Harrison and Fred Foldvary certainly predicted it several years before it happened. I think they are on to something.

 

[Republic Now!]

It's more tribalism than narcissism in my opinion. Beyond economics, we generally defend people or general ideologies we tend to agree with (even if we don't agree with the particular aspect or the behavior we're defending) because we seem to feel an obligated to do so out of loyalty and to mingle with ideas of opposing ideologies would make us a traitor to our cause.

Of course, there also ideologies that have irreconcilable points. To adopt opposing ideologies in these specific circumstances would make us hypocritical to maintain our own even if we could agree with those individual points.