Illustration of a causation not a correlation below:
The Fed's Federal Open Market Committee is almost entirely made up of PhDs in economics https://t.co/nfDkcjjHNN pic.twitter.com/Qpf12qP1N5— Cato Institute (@CatoInstitute) June 29, 2016
They simply are not qualified.
What's the point of that chart? What are they implying?
ReplyDeleteI suspect they are ideologically qualified.
ReplyDeleteI, idk exactly... Cato is a big libertarian think tank... I just follow them as a "know thine enemy" type of thing....
ReplyDeleteThe original articles implies a 'diversity problem' at the FED. Well, duh, it's credentialism, which is what things have been pushed the last decades. 'Economists' theoretically are specialists of things like those, so economics phd's theoretically should hold such positions. Well trained muppets to repeat what is thought they should say, they fit well that position.
ReplyDeleteI agree about diversity problem, but the diversity problem is not the type of education, but the core beliefs of those holding positions. They all are neoclassic clones, and non-economists live in the same paradigm, so how does it even matter what academic title they hold.
The lack of diversity is due to group-think, not so much to academic curriculum (which is only an excuse to perpetuate group thinking). What is needed is skeptics on the status quo with inquiring and scientific minds and system and design oriented thinking.
It may be easier to find those types in other disciplines, a regression to lawyers is not probably going to change jackshit (there is a lot of lawyers in banking, and they are as out of paradigm as the FED guys).
But it all serves well its purpose: "let the markets sort it out", "we can't do anything", "it's all too uncertain". Economists excel at repeating their cliques ad-nausea, doing something useful though...
"the diversity problem is not the type of education"
ReplyDeleteYes it is.....
Its the same reason the MMT ones say "free floating!".... or "the deficit is too small!".... etc...
ReplyDeleteLawyers are trained in precedent of course they are not going to change anything....
ReplyDelete"well that is how we've always done it!" is textbook lawyer 101....
ReplyDeleteIt should be filled with bankers.
ReplyDeleteNo is not, there are millions of engineers, physicists, etc. that think we ar erunning "out of money".
ReplyDeleteIs not the type of education AND the type of thinking.
The second is not only a function of the first.
*Is the type of education AND way of thinking
ReplyDeleteOr in an other way: it MAY be a sufficient condition but is not a necessary condition.
The chart says in the 50's there was people without degrees and BA and still probably had better understanding. Eccles didn't had higher education either for example.
In any case, it doesn't matter, is not like we should assume that CB's can do much more (when the best that could happen is that they disappear and were consolidated with treasuries). Current problems come from Fiscal front, and we definitively have an over-representation of lawyers in that camp, which is a huge problem.
Cato problems with the Fed probably come from the same stupid out of paradigm thinking...
Those other people who may be qualified don't have any interest in this area of study like we do.... You have to have the training AND the interest...
ReplyDeleteSo that excludes most activists...
ReplyDeleteWell even in the 50's we were still under gold internationally ...
ReplyDeleteWhen we went out from under gold that change was not understood at all and still not adequately even by us...
Fiat creation by the central bank for the private sector is morally bogus anyway.
ReplyDeleteIt says something when lawyers are more qualified than economists at running the FOMC. Less ideologically constrained perhaps. The post-war boom had lawyers at the FOMC. It does prove that Bill Black should be the next Chairman of the Fed, and economists should be excluded from all Fed, Treasury and for that matter all government positions. That'd be a good start.
ReplyDelete