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I have just come back from a couple of days of presentations, and I had an idea. How would other bloggers feel about a post-election economic update at some point in early December? I could definitely do this – as long as I can get permission from my work place, a free venue, and an interest from the blogging community in NZ.
Any thoughts?
Look, I have no idea why Labour feels it is necessary to run their election campaign as a bunch of muppets – but they have, and in order to keep surprising everyone with their ridiculousness they have attacked the political neutrality of Statistics New Zealand.
The complaint is that Statistics New Zealand said that their trend measure of building activity was crawling up, at the same time there was a sharp seasonally adjusted drop in consents in September. The reason for this was that August was “strong” (relative to recent history) – so even with the decline September was a stroke higher than we have been used to, and the real “trend” measure of activity they have (and have always talked about) did increase.
Look, this isn’t just a case of Phil Twyford not being able to understand data – I mean, that is part of it it seems, but that isn’t the whole issue. I’ll even ignore that fact that Twyford seems to think political parties run the economy – a fallacy among politicians that gives them a sense of unwarranted self importance. The most confusing issue for me here is that anyone would think this is the best use of scarce time on the campaign trail – you can arbitrarily attack Statistics New Zealand and get zero votes (as it is such a non-issue), or you can be a competent politician and go out to try and get votes by talking to the public and showing them that you are the best option in terms of meeting their interests.
If Labour was a real opposition party, their members would be doing the second. Hopefully they will be by next election, so that I actually feel like I have a choice when that election comes along – a competent opposition is essential for democracy … just saying.
… and the difficulty humans have recognising them. Click through to xkcd for the, very worthwhile, rollover text.
Apparently fiscal forecasts are the cool new thing to blog about since both major parties are talking about them. As the frantic blogging shows, even political commentators are getting excited about their spreadsheets at the moment. However, the only consensus so far is that nobody really knows who’s right about what.
Thankfully economists have a lot of experience with forecasting, and the accompanying abuse when one gets it wrong. As Matt has written about many times previously, the main thing to remember is that forecasting isn’t about the numbers: it’s about the story. Your numbers, however good at the time, will always be overtaken by events and end up being wildly inaccurate. What’s important is the reasoning behind the numbers and how it stacks up. For example, the argument about accounting conventions that’s presently raging in the political blogs may or may not be good politics — that’s not my area of expertise — but it doesn’t seem to be adding to our understanding of either party’s policies. Whether borrowing to invest in the Super Fund adds to a particular measure of debt is fairly irrelevant and won’t change anyone’s views on the policy. What people care about is whether the government borrows to invest in it at all, and each party’s policy on that seems fairly well established. Read more
Well, shame on Greg Mankiw for failing to cover the eternal battle between the adherents of Smith and Keynes in his 101 course. More interestingly, he also reposted this from FlowingData.
I know what its like to be a student, and feel like you know everything there is to know. But the truth is that you don’t, you really don’t. And that is something that the students walking out of Econ 10 should realise.
I learnt this the easy way – I listened to my lecturers, asked about the issues, and was able to tell that they were significantly smarter than me … and that they had critically analysed many of the same issues in the past.
From this I discovered that economics provides a framework that can be used for understanding the allocation of resources when we have scarcity. It doesn’t prescribe to us what policies are right or wrong, it just gives us a transparent framework where we can hang up our dirty assumptions for everyone to see and then look at what conclusions pop out.
Look, there is nothing wrong with critical thinking – hell critical thinking is essential in the framework I’ve described about. But they are complaining about a course that leaves all its assumptions out in the open, leaves itself open to criticism, and helps the student to engage in critical thinking.
If you want to know how poor the understanding of the students is look here:
There is no justification for presenting Adam Smith’s economic theories as more fundamental or basic than, for example, Keynesian theory
Comments like this show to me that the students actually know nothing – and just want to protest the course because they don’t know what the course is, or what economics is.
In fact, I’m surprised at this idiocy. I’m a fluffy business economist – nowhere near academia or study – but I read the General Theory and Wealth of Nations in my first year of study. At that point I knew the fact that “Adam Smith’s theories” and “Keynesian theories” were about different things, and shared a lot in terms of the fundamental framework – the framework that is taught by Mankiw in Econ 10.
I find it difficult to believe that anyone could have the arrogance to walk out like this when they have no knowledge or understanding – but then again, maybe I’m underestimating the arrogance of Harvard students …
And this is my issue with a lot of the protests at the moment. There are real issues in the US and Europe, where protesters SHOULD be out complaining – and the knowledge gained from a course like Econ 10 would help to provide this. In fact, once you start to understand allocation, you begin to realise just how much there is to protest about – especially with regards to the developing world, and the inequities we tolerate for the worlds real poor. Instead, the protests are dominated by self-centred narcissists who want attention and want to “fight the system” – giving the whole idea of protest a bad name.
Update: Mankiw discusses here.
Update 2: Reading the comments to the articles linked to by Mankiw is one of the most depressing things I’ve ever done. I hope to god these aren’t actually Harvard students, because the comments are: