On Tue, Aug 25, 2009 at 5:21 PM, Doug Pensinger<brig...@zo.com> wrote:
> My point was that we look to our experts in a crisis. If our experts > lay out a course of action for us and we demure, its on our heads > weather it be a burnt building or a burnt economy. I think I understood your point. Mine was that economists are not really experts in any useful knowledge. They cannot predict the course of the economy any better than non-economists. Also, I dispute your claim that the vast majority of economist are in favor of throwing money at the situation. Here are hundreds of economists who disagree with that approach: http://www.cato.org/special/stimulus09/alternate_version.html "Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we do not believe that more government spending is a way to improve economic performance...." > You've stated that the vast majority of economists do no better than > average at investing. First, can you substantiate that statement? I don't have references at hand, but I have read several surveys of economists and how they had their money invested, and the majority of them had money market funds, bonds or bond funds, and index funds. Virtually none of them had much money invested in specific companies or even sectors, the type of thing you would do if you were good at predicting the future of the economy. Furthermore, few distinguished investors are economists. One of the few I can think of is Robert C. Merton, who was on the board of directors of Long Term Capital Management, and I guess you know how that turned out. > Second, what does that really have to do with the financial crisis? If one cannot predict how financial systems will evolve, then one cannot credibly say that "if we do this, then it will make things better". > OK, I pick Warren Buffet, second richest man in the world who termed > the present crisis as an "economic pearl harbor". Warren Buffett (and Berkshire shareholders) benefited financially from the bailout of Goldman (and indirectly, AIG), so it would be against Buffett's own financial interests, and probably against his sense of duty to his shareholders, for him to speak out against the bailout. Also, Buffett does not have much faith in academics and the idealized techniques used by economists: “Naturally the disservice done students and gullible investment professionals who have swallowed EMS (Efficient Market Theory) has been an extraordinary service to us and other followers of Graham. >From a selfish standpoint, we should probably endow chairs to ensure the perpetual teaching of EMT.” --Warren Buffett _______________________________________________ http://mccmedia.com/mailman/listinfo/brin-l_mccmedia.com
