When did economists become charlatans? - The Daily Reckoning
The Daily Reckoning by Bill Bonner
On This Day - 27 June 2012
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When, exactly, did economists become charlatans? Probably in the early-mid 20th century. That's when they stopped listening and began commanding. Instead of trying to understand how economies work, they started to tell them what to do.

And now, economists are almost all mountebanks and scamsters.

They pretend to know what they don't know at all. And they pretend to be able to do what they can't do. They meddle. They interfere. The make precise estimates and forecasts. They make pompous judgments. They almost sound like they know what they are doing.

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Last month, The Atlantic magazine proved that it is run by half-wits. It put a photo of Ben Bernanke on the cover with the headline: "The Hero."

"Ben Bernanke saved the global economy," said the description.

Oh really? How did he do that? Don't bother to ask. Nobody knows what was wrong with the global economy...whether it has been 'saved'...or how it was saved...least of all, the editors of The Atlantic.

Certainly, Ben Bernanke doesn't know. The biggest credit and real estate bubble of all time blew up on his watch ...anyone could have seen it coming. But not Ben Bernanke. And how could he possibly 'save' a situation that he neither saw nor understood?

Beats us.

Our assessment of Bernanke is closer to that of Mike Shedlock:

We can state without a doubt that Bernanke is an inflationist jackass,
devoid of common sense. Clueless about trade, debt, history and gold.

Shedlock believes The Atlantic cover will earn it a spot in the contrarian magazine cover hall of fame, next to TIME's famous 2005 cover: "Home $weet Home," which lauded the advantages of buying a house.

We don't know. But we know Bernanke is an economist. And economists are frauds. Can they make us richer? No. Can they make the economy work better? No.

What can they do? They can cause problems and then come up with claptrap solutions that make them worse.

Here is Joseph Stiglitz again, missing the point:

US inequality is at its highest point for nearly a century. Those at the top - no matter how you slice it - are enjoying a larger share of the national pie; the number below the poverty level is growing. The gap between those with the median income and those at the top is growing, too. The US used to think of itself as a middle-class country - but this is no longer true.

The country will have to make a choice: if it continues as it has in recent decades, the lack of opportunity will mean a more divided society, marked by lower growth and higher social, political and economic instability. Or it can recognise that the economy has lost its balance. The gilded age led to the progressive era, the excesses of the Roaring Twenties led to the Depression, which in turn led to the New Deal. Each time, the country saw the extremes to which it was going and pulled back. The question is, will it do so once again?

See how it works, dear reader? Stiglitz has no interest in what really causes "inequality." Nor does he care what role it plays in an economy. He is simply convinced that it is 'bad' and that we must "do something about it!" What does Stiglitz propose? Raising taxes on the 'rich,'of course.

In his mind, the economy is always losing its "balance" and going off the rails. And then, thank God, the economists of the progressive era and the New Deal come to the rescue.

But how does he know what balance an economy should have? Of course, he has no idea...only his own prejudices and preferences.

Economists are vain and incompetent. So are a lot of people. But what makes economists particularly reprehensible is that they are willing (and alas, able) to impose their prejudices on the rest of us.

How do they do that? Ah...we are about to reveal the dark secret of economists, GDP and other claptrap.

Stay tuned.

Bill Bonner is the President & Founder of Agora Inc, an international publisher of financial and special interest books and newsletters.

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1 Responses to "When did economists become charlatans?"

Sivaramakrishnan

Jun 27, 2012

The journalists, be it financial or political or sports are very good in criticizing everybody including the masters and specialists too of any field, as if given the job in their hand they would have a done an extremely better job than the person appointed. And that is probably the reason journalism is the least lucrative and attractive job today. Because every tom, dick and harry has his own way of criticism on others. But nobody seems to understand the basic reason properly. The inequality or disparity is not only in US but throughout the world, Even in India which is considered to be the fast growing market will only see the increase in gap in the years to come and not decrease.

According to me the basic reason is 1) Printing of currencies in paper as and when the government requires 2) The population explosion ever since the oil discovery and the paper currency was introduced 3) God or Nature or The Supreme formless being has taken the opportunity to fulfill everybody's wishes and desires by birth and re-birth since there will not be any more shortage of money due to paper currency unlike the old financial system of transaction in natural resources like Gold and Silver coins or Commodity exchanges 4) All that man can do today is how efficiently he can distribute the wealth to all with the acceptable standard of disparity and inequality 5) If the Economists think they have the super brains to tackle this problem with the present Capitalist measures there is no better idiot than the ones passing out in pretention of best brains from the world's best universities, simply due to the huge volume of business transactions with so many variable factors multiplied by the population explosion.

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