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Sunday, September 25, 2011

Picasso Krugman and Economic Art Driving Public Policy...


Charles Hugh Smith:
Only with the advent of a true understanding of the nature of infection, the immune system and disease did the "folk" pseudo-science of bleeding pass from accepted medical practice.

We are mired in a similar era of pseudo-science being accepted as actual science, i.e. as reflecting the underlying causal mechanisms of life and the universe, and that pseudo-science is called economics.

As I have noted here many times, we are experiencing not just a standard-issue financial crisis but the failure of the entire pseudo-science edifice of modern conventional economics.


Economics is not so much a science as an art donned in the patina of science which makes Krugman something of an artist. Much of economic argument today is based on a neural net of interconnected statistical data from which any "reality" may be inferred and from which may be drawn any desired result. Are Krugman's arguments shaped by "the data" or is "the data" shaped by his imagination and desire?

How are we to know? -- when, unfortunately, much of economic debate has devolved into statistical pissing contests with economists demanding to see one another's "data" as though anything concrete can spring fourth from a neural net of statistical inference?

Just as sculptors use clay to mold a representation of their reality so too do economists mold the reality they perceive from statistics. Watching any two sculptors argue that their creations are proof of anything beyond their imagination is as meaningless as economists doing the same via statistics.

Krugamn's gift of artistically constructing from a grab bag of stats a desired reality is no more useful than Picasso's use of paint to do the same. The only difference between the two is that one attempts to drive public policy.

Yes, I compare Krugman to Picasso; he is both that good and that distorted.


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