Maybe it's the mist?
Federal budget process: What did Leon Panetta mean?
"Like most Washington public servants, Mr. Panetta holds the old-fashioned view that federal budgets should be balanced and the magnitude of deficits is an important metric for the economy. This view is appropriate for households and businesses that have limited financial resources. However, the federal government issues the nation’s currency and is not constrained by financial resources. It has all the financial resources it needs and is constrained only by the nation’s productive resources.
Both political parties are dominated by the false view that the federal budget must be balanced. The only difference is that conservatives think the government has a spending problem and liberals think it is a revenue problem. Both are wrong and it is hurting America’s competitive global advantages."
The authors of this article?
Duane Catlet, retired career Ph.D chemist & materials technology manager.
Dan Metzger, retired Ph.D physicist & engineering manager
3 comments:
Scientists haven´t been subject to years of indoctrination - which is the purpose of the formal study of "economics" in colleges and universities.
Even mainstream economics such as Krugman have admitted that, in order for a paper to be published in a top journal, it has to be expressed in language and equations that make it acceptable to the economics canon. Any relevant ideas for the real world must be hidden deep inside these formal (but not ideology-free) trappings.
Scientists haven´t been bred under such constraints. They study the mechanisms without preconceptions and easily reach the obvious conclusions.
Curiously, conclusions that are usually close to "heterodox" schools of economics, including MMT.
One could scarcely devise a more powerful, if unintended, endorsement of said schools.
Jose,
It's much worse than that. Economics journals will publish stuff "expressed in language and equations that make it acceptable to the economics cannon" even when they know the equations etc are rubbish. See:
http://larspsyll.wordpress.com/2013/10/10/drivel-that-pass-academic-quality-control/
Lars Syll says 25% of scientists rejected a biology paper written intentionally as an attempted hoax.
He seems discouraged by that. But compared to what happens at economics departments he should feel more optimistic. I´d guess not even 1% would reject any paper written with the proper equations and under the "correct" ideological framework.
And 100% would likely reject a good paper that does not follow those mandatory rules (equations plus ideological correctness).
That´s what a mainstream economist such as Krugman have implied over and over again. He´s written that in order to have his own papers published back in the 80s he had to disguise his empirically relevant conclusions under the "rational expectations" framework, otherwise peer reviewers would reject it upon first inspection.
And a specialist in monetary operations like Perry Merhling only managed to keep his chair at Columbia because he published widely acclaimed books - for the general public - on money and finance. Until that happened his studies were considered "not up to the (rational expectations) standards" of that institution and he was at risk of being fired.
Science departments of universities are much better than their economics counterparts.They have to pay attention to empirical relevance. Perhaps they should start teaching a different "economics" on their own, based on accounting concepts (GDP and flow of funds) and engineering-like studies of how systems truly work.
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