October 16, 2023

Source: Bigstock

The new political dividing line in America’s never-ending culture wars will be economic: Bidenomics versus MAGAnomics. Apparently, Bidenomics will make the average American richer, and MAGAnomics will make them poorer…according to Joe Biden supporters. Conversely, it could also be the case that MAGAnomics will make the average American richer, and Bidenomics will make them poorer…according to MAGA-yelling Donald Trump supporters.

Both camps purport to be able to produce statistics to support their case; statistics that, being about an economic future that hasn’t actually happened yet, are wholly unfalsifiable—a fancy way of saying “invented wholesale.”

In fact, the situation is even worse than this: It turns out much past economic data is also inaccurate too. Here in Britain, data from the Office for National Statistics (ONS) claiming to show U.K. GDP for 2023 was 0.2 percent below pre-pandemic levels was jumped upon by those who voted Remain in the Brexit vote of 2016 as “proof” Britain leaving the E.U. had fatally damaged her economy. Brexiteers, however, were quite happy to either ignore such data or call it flawed.

“No wonder economics is called the ‘dismal science.’”

In late September, however, the ONS admitted their figures were indeed wrong, altering their methodology to indicate British GDP was now 1.8 percent higher than pre-pandemic levels, meaning the U.K. was actually outperforming various large rival E.U. economies like Germany and France. Now Brexiteers suddenly about-turned and began to claim ONS data was accurate after all, as they liked the new version’s conclusions, whilst it was the turn of Remainers to doubt its accuracy!

No wonder economics is called the “dismal science.” It often comes across as little more than a numerically assisted vehicle for people’s preexisting ideologies, of both left and right.

Arrivederci, Romer
As long ago as May 2017, Paul Romer, then the Chief Economist at the World Bank, gave his frank opinion that the Brexit vote itself was the fault of his own profession’s barely disguised politicization:

Brexit was a vote against the expert advice of economists. We have to earn back our credibility as professionals who will give an unbiased answer…. [Brexit voters] sensed that economists were behaving like activists [by advising against voting Leave] yet invoking the authority of science.

Romer feels that many modern economists, in love with “mathiness” and “bankspeak,” deliberately make their academic papers nigh-on incomprehensible even to trained individuals like himself, never mind the general public, who consequently end up with the financial wool pulled over their eyes.

He came to this conclusion after originally intending to write a paper celebrating recent advances in academic understanding of what drives economic growth, but then realized that, upon closer inspection, there had been no such advances at all: His peers were just making everything up. Watching a documentary about Scientology, Romer saw clear parallels between the groupthink of Church members and the groupthink of economists, leading him to conclude that the profession had today become little more than a cult masquerading as a pseudoscience.

Macroeconomic Operating Thetans within the sect hierarchy had begun to engage in a sort of mathematical conspiracy against outsiders by developing incredibly complex statistical models that purported to explain the workings of the global economy with a kind of extreme precision unavailable to God Himself. Nonetheless, the models in question were undeniably beautiful, mathematically speaking, hence the popular geek-joke “Economists do it with super-models” (before then systematically screwing the rest of us, a cynic might subsequently add).

However, like so many well-formed catwalk stars, strip such statistical models naked behind closed doors and they will prove to have had their apparently perfect and “natural” figures carefully sculpted into the correct desired shape via a process of cunning reconstructive surgery.

Figures of Ridicule
According to Romer, the false perfection of the economists’ own models had then been applied to their highly post-human view of people themselves, whom they implausibly painted as being perfectly rational and robotic economic actors rather than the often erratic and unpredictable personalities they truly were. Supposedly, individual citizens always acted in their own rational economic self-interest at all times and under all possible conditions—they had to, that was what the economic models said, and the models could never be wrong. How could they be? They had been written by economists!

Writing in a 2016 paper, “The Trouble With Macroeconomics,” Romer explained how this meant a whole new post-real mode of economics had been created for the age of machinelike post-humanity. Romer told us to imagine a traffic jam on a bridge. Why was it caused? Well, because lots of motorists had randomly made the decision to drive across the bridge at the same time. Many a modern-day macroeconomist would dispute this conclusion, though. After all, if there was already a traffic jam there, why would drivers continue to add to it instead of going to work via a different route, which would obviously prove a bit quicker? Could it be because human beings are often inherently irrational and just choose to blindly drive on into the jam anyway, like the cabbage-headed traffic lemmings they are? Not to the post-real, post-human economists.

Rather than admitting they had no true idea why motorists were acting the way they did, because every individual makes their own individual decisions in life, rather than being a perfectly predictable statistics-led robot, they would instead airily invoke something called “external shocks,” which are…well, anything handy and vaguely plausible-sounding that comes to mind, really.

If nurses were saving lots of money during a period of speedily rising public-sector wages and low savings interest rates, for example, then this might seem an irrational thing for them to do. You might think they would want to splash their new cash quickly, as a dollar-spraying, nurse-funding government may hope, thereby boosting consumer spending.

Therefore, the nurses’ supposedly irrational behavior of saving during a time of financial plenty and low interest rates on bank deposits would have to be “explained” by virtue of claiming that these nurses were financially all-wise and all-seeing, realizing that eventually taxes would have to rise to pay for the expansion of their salaries, and they were saving up in external anticipation of this. Or, then again, possibly they somehow sensed some external geopolitical shock like an abrupt rise in global oil prices was coming, so were stashing their cash accordingly.

Yes, of course. Does that sound like the typical behavior of any nurses you know? Does it sound like the typical behavior of any human beings at all you know? Perhaps this model of conduct is an appropriate way to describe how little pixelated number-people in computer games like Sim City act, but surely fleshly human humans are not always so infinitely knowable.

Romer also suggests that the easily rigged data that economists feed into their models should be rechristened as FWTVs, or “Facts With Unknown Truth Value.” I would prefer “Statistics Having Imaginary Truth,” or SHIT, myself, because, with enough obscure math, economists can bury their piles of total SHIT so far underground with a spade that no one else can smell it.

This brown-washed numerical disguise then allows them to say things like (as Romer has it) “Assume A, assume B…blah blah blah…. And so we have proven that P is true,” even if it isn’t. But how are these imaginary variables fed into the models assigned the precise SHITty values they purport to possess in the first place? As Romer suggests, “If the author can make up an imaginary variable, ‘because I say so’ seems like a pretty convincing answer.”

A Big Bunch of Merchant Bankers
Naturally, many academics did not find Romer’s amusingly blunt abandonment of the usual norms of bankspeak to be particularly endearing. One of the main people Romer blamed for this state of affairs evolving in the first place was the leading economist Robert Lucas, an academic disciple of whom subsequently confronted Romer and told him angrily that “You are killing Bob!” simply by virtue of having had the nerve to publicly disagree with him.

Such encounters led Romer to conclude many economists were not rational thinkers at all, but instead possessed “a sense of identification with the [particular economic school to which they belonged]…akin to identification with a religious faith or political platform.” In other words, they were all Scientologists! In this analogy, perhaps MAGAnomics evangelists are Scientologists of one stripe, and Bidenomics proselytizers are Scientologists of another stripe: Both, however, are surely complete cultists.

Romer provides the following appropriately dismal assessment of the “science” of economics as a whole:

If facts disconfirm the officially sanctioned theoretical vision, they are subordinated. Eventually, evidence stops being relevant. Progress in the field is judged by the purity of its mathematical theories, as determined by the [established] authorities…. [The] disregard for facts has to be understood as a choice.

Romer claims that, in private, many economists secretly agreed with his jeremiad but were unwilling to come out and say so openly. Perhaps they feared equally for their careers, their academic friendships with their specific theoretical allies, and their cherished beliefs about their fantastic (in both senses of the word) mathematical models. However, ordinary people, suggested Romer, were now beginning to see through this whole charade, hence disobedient phenomena like Brexit. As he asked, “Why should you expect that people who want answers will keep paying attention to economists after they learn that we are more committed to friends than facts?” Why indeed?

According to former Chinese prime minister Li Keqiang, speaking off guard at a state banquet in 2007, the entire concept of GDP itself was unreliable as it was a wholly “man-made” concept, subject to error, mismeasurement, and political bias, whether intentional or otherwise.

It’s coming to something when the Chinese Communists are now more honest about such matters than our own Western politicians are. Isn’t it about time people like Biden and Trump alike stopped spouting such total financial SHIT in public and expecting the rest of us to just sit there, open wide, and endlessly swallow it all?


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