If your doctor gave you a diagnosis of late-stage liver cancer and meant it with all sincerity, when you discovered that your liver was just fine and you had no cancer anywhere, would you go back to the guy? I mean other than to scream at him. How about if after he told you, he said "Frankly, I find it hard to care much, even though this is my specialty?"
Dig this from Paul Krugman of the NYT in 2016.
It really does now look like President Donald J. Trump, and markets are plunging. When might we expect them to recover?If you want to see a perfect example of why the Normals should not only mistrust but loathe the Elites, that's it. Particularly because the quack still has a job and is still called on by the Elites in the news media for his opinions.
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.
Under any circumstances, putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world’s most important economy would be very bad news...
Now comes the mother of all adverse effects — and what it brings with it is a regime that will be ignorant of economic policy and hostile to any effort to make it work. Effective fiscal support for the Fed? Not a chance. In fact, you can bet that the Fed will lose its independence, and be bullied by cranks.
So we are very probably looking at a global recession, with no end in sight. I suppose we could get lucky somehow. But on economics, as on everything else, a terrible thing has just happened.
"You have terminal cancer and I don't care. What, you don't have it? Whatever. Now I will opine on your spleen. Sit down and listen, peasant. I have a Nobel Prize."
Meanwhile, in the world the rest of us inhabit, we have this.
WASHINGTON—American employers picked up the pace of hiring in April and the unemployment rate fell to a half-century low, adding to signs of healthy U.S. economic growth as the expansion approaches its 10th birthday.Screw them all.
The economy added a seasonally adjusted 263,000 jobs in April, and joblessness fell to 3.6%, the lowest level since December 1969, the Labor Department said Friday.
Private-sector workers saw solid wage gains, with average hourly earnings up 3.2% in April from a year earlier, matching the prior month’s increase.
An amusing activity is to use Google to check the current stock market to see whether it is going up or down, and then look at the articles immediately below to see what forecasts they were making yesterday, or even earlier that day. It quickly becomes clear that none of those people has the first clue on what is going to happen next, and they are just guessing.
ReplyDeleteThis is inevitable, I suppose. Economics has the huge problem that economic forecasts are not at all independent of what they are predicting. No, you make an economic forecast, and if anyone takes it seriously, they then change their behavior in such a way that they shift the economy to make the forecast wrong. Back when everyone was predicting a crash, people reacted accordingly until it shifted around to a rise, and then when all the pundits were starting to get behind the idea that it was going to go up, that's when it all collapsed for a while, until they were all convinced it was going to crap, at which point it started picking up again . . . lather, rinse, repeat.
The big issue is not that Krugman is usually wrong about the economy. The big issue is that he still thinks that that it is possible to be right due to anything other than chance.