Posted by PrestoPundit on 09/28/2008

What macroeconomic theory says that we run the risk of a Depression if
we don’t have a bailout? ..  If macro is
a genuine discipline, it has to consist of something more rigorous than
“If Bernanke is worried, then so am I.”

Arnold Kling

Kling was likely responding to this embarrassing post from Harvard macroeconomist Greg Mankiw.  A lot of smart people believe a lot of stupid things — and it’s just a fact that there exists no consensus “science” of macroeconomics, just a patchwork of rival “I’m smart” exercises in what from the perspective of the professors in the math department is just 3rd rate mathematical gymnastics.  Microeconomists around the country almost universally don’t believe in it, and those that teach it do so primarily because they get paid to do so.  And what the economists teach their undergraduates is almost without exception something very different from what the elite macroeconomists teach to their grad students.  This tells us something very important about the non-science status of macroeconomics.  Unlike real science, there is no scientific consensus.  Unlike real science, most in the discipline don’t believe in it.  Unlike real science, grad students are taught something different than the undergraduates are taught.  The public needs to know this.

The fact that “Ben is at least as smart as any of the economists who signed that letter [against the $700 billion bailout]” gives us no reason at all to have confidence in the theoretical understanding behind Bernanke’s actions at the Fed.  None.

UPDATE:  The socialists and the corrupt class have another $700 billion of your money.

ALSO:  Bruce Bartlett — the case for the bailout.  Note well that you don’t have now a lick of the mathematical fashion show which is macroeconomics to understand Bartlett’s argument — nor do you have to be the smartest guy in the room.  This stuff has nothing to do with being the “smartest” math drone in the faculty lounge.  It’s age old knowledge, know almost forever to non-economists in the financial sector.  No need to bow down to whatever whim crosses the mind of the “smart” economists — who, as I’ve suggested, are considered “smart” when it comes to economics for reasons which are completely bogus from the point of view of science and economic understanding.

AND THIS:  The Bush / Democrat Congress bailout for Wall Street is now down to 24% support.


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