Drudge Retort: The Other Side of the News
Friday, April 13, 2018

Economics remains one of the most popular majors for college students. Most econ students, of course, don't go on to become professional economists; instead, they fill the ranks of the U.S.'s vast upper-middle-class of business managers and professionals. The models they learn in their college classes inform the way they think about the world, even if they don't end up using them for quantitative purposes after final exams are over. But there's at least one gaping hole in the education most econ majors receive. They learn plenty of models, but they aren't often taught to think critically about what they learn. At best, they absorb a few ideas from offhand comments by their professors, or from the tone of their textbooks. As a result, many of them leave class with deep reservations over whether economics theories represent real science, or whether economists approach the world in a moral, socially responsible manner.

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This problem can be addressed by making all U.S. econ majors take a philosophy-of-economics course, like the one offered at the London School of Economics. There would be two main parts of the course -- epistemology and ethics.

Epistemology concerns the methods economists use to understand the world, and whether these are valid. That's often a very tricky question.

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Typed out a long post on my phone, hit submit, and received an internet connection lost error 😭. I'll be back..

#1 | Posted by GOnoles92 at 2018-04-13 06:38 PM | Reply

I don't disagree, but this is like a Mad-lib, as pretty much the same can be said about every liberal arts major:

_____ Majors Graduate with a Huge Knowledge Gap

#2 | Posted by Rightocenter at 2018-04-13 06:42 PM | Reply

#1 haha! That happened to me earlier. I got my message back by hitting the back button on my phone.

#3 | Posted by BruceBanner at 2018-04-13 06:48 PM | Reply

#2 - Except that these toddlers (including you btw) are running the country with half-baked ideas bearing little relationship to reality.

MadBomber is also one who found an old econ101 text in a trash pile and now waves it in the face of anyone who will listen.

#4 | Posted by BruceBanner at 2018-04-13 06:49 PM | Reply

These idiots don't even know Econ 101, where you learn the laws of supply and demand. Increasing the size of the labor force vis illegal and legal immigration reduces wage and job opportunities for American citizens.

#5 | Posted by nullifidian at 2018-04-13 06:54 PM | Reply | Newsworthy 1

"I don't disagree, but this is like a Mad-lib, as pretty much the same can be said about every liberal arts major:"

Oh I get it:
All Majors Matter!

#6 | Posted by snoofy at 2018-04-13 06:56 PM | Reply

#5 immigrants also increase the customer pool which increases wages and opportunities for residents.

Look at any economy with a declining population for proof.

#7 | Posted by bored at 2018-04-13 07:24 PM | Reply

Increasing the size of the labor force vis illegal and legal immigration reduces wage and job opportunities for American citizens.

#5 | POSTED BY NULLIFIDIAN AT 2018-04-13 06:54 PM | FLAG:

how true is this? are there numbers? is it possible to get accurate numbers?

there is an argument that immigrants are taking jobs americans don't want, so if there were no more immigrants, there would not be higher employment.

i suppose the counter argument is that the wages are too low and if they were raised the the job conditions improved, the positions would fill.

now i'm just rambling.....

#8 | Posted by BruceBanner at 2018-04-13 09:37 PM | Reply

#5 immigrants also increase the customer pool which increases wages and opportunities for residents.

#7 | POSTED BY BORED

===================

Ridiculous thinking as it is adding people at the very low end of the wage/skill scale. The wages these people receive to buy things come at the expense of the native born workers whose wages they are are lowering. The last thing any developed country needs is a massive influx of low skilled workers when a majority of those jobs will be automated in 10 years -- and likely would be automated already if not for the ready supply of cheap labor.

#9 | Posted by Rex_Buyt at 2018-04-13 10:03 PM | Reply | Newsworthy 3

there is an argument that immigrants are taking jobs americans don't want,

----------------------

This is a ridiculous statement. If there were jobs that Americans didn't want, we would not see any native born plumber as no one want to work elbow deep in ---- all day. That is not the case as the wages for a plumber continue to attract the native born. It is not an issue of type of work, it is an issue of wages.

so if there were no more immigrants, there would not be higher employment.

----------------------

There would be higher employment of the native born due to more demand for low skilled native born labor and increasing wages as supply is less.

----------------------

i suppose the counter argument is that the wages are too low and if they were raised the the job conditions improved, the positions would fill.
#8 | POSTED BY BRUCEBANNER

======================

That is exactly how a functioning economy works. Of course, some of the jobs would be eliminated and some tasks may just stop being done as their value is too low to justify. I would expect landscaping to decrease but that is not something that adds value to the US' global competitiveness.

#10 | Posted by Rex_Buyt at 2018-04-13 10:11 PM | Reply

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"The wages these people receive to buy things come at the expense of the native born workers whose wages they are are lowering."

Wages are set at the discretion of those who pay wages, and nobody else.

Some choose to hire illegals, who are willing to work for less.

Some choose to pay citizens under the table, which is the same as being willing to work for less of your employer's money going to Uncle Sam.

Ever ask your boss for a raise?

Why did you have to ask, if it was yours to give?

#11 | Posted by snoofy at 2018-04-13 10:14 PM | Reply | Funny: 1

Wages are set at the discretion of those who pay wages, and nobody else.

#11 | POSTED BY SNOOFY

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You clearly don't understand supply and demand. Take your circumstance as an example. From your posting history, you are obviously an under performing, semi-useless only child from a wealthy family. So, when you ask mom for money, she give it to you. Now, imagine if she could hire 300 under performing, semi-useless illegal immigrant kids to play X-Box in basement for a bag of Cheetos less per week than you are currently demanding. You would be forced to lower your 'wages' due to excess supply in the market. Do you understand now or is the thought of mom saying no more Cheetos too scary to fathom?

#12 | Posted by Rex_Buyt at 2018-04-13 10:27 PM | Reply

Snoofy is right on the low end. Without unionization, the worker is not able to organize, but the employer is.

#13 | Posted by BruceBanner at 2018-04-13 11:18 PM | Reply

"You clearly don't understand supply and demand"

What's the supply of unskilled labor, and what's the demand for unskilled labor?

Where's MadBomber to explain that literally every human being on earth is a fully qualified unskilled laborer?

Most of all, why am I talking to Rex? JeffJ was right I could be getting more out of Starbucks customers right now.

#14 | Posted by snoofy at 2018-04-13 11:28 PM | Reply

"Take your circumstance as an example. From your posting history, you are obviously an under performing, semi-useless only child from a wealthy family."

Aww, that's kind of you Rex.

It's what you didn't say about me that really warms my heart.
Nothing about impotence, nose picking, or halitosis.
Maybe I was wrong about you.

#15 | Posted by snoofy at 2018-04-13 11:32 PM | Reply | Funny: 2

What's the supply of unskilled labor, and what's the demand for unskilled labor?
Where's MadBomber to explain that literally every human being on earth is a fully qualified unskilled laborer?

#14 | POSTED BY SNOOFY

==================

That is a ridiculous statement once again displaying your ignorance. In order to be considered part of supply, you need to have the willingness to do an exchange. As such, a small % of the US workforce is willing to work as unskilled labor at under $10/hour. In our native supply, it is very much a fixed quantity today. If we have open borders, that fixed supply goes up by 100x or more.

Thus, the basic assumption behind your rambling is utter nonsense.

#16 | Posted by Rex_Buyt at 2018-04-13 11:41 PM | Reply

"In order to be considered part of supply, you need to have the willingness to do an exchange. As such, a small % of the US workforce is willing to work as unskilled labor at under $10/hour."

Are you willing to work at unskilled labor at under $10/hr?

Why or why not?

Give me like two sentences.

For example, "I'm not, because I don't need the money that bad, even if it was some slack job I'd rather not do that and maybe have to work for like thirty minutes during my eight hour shift, even that's not worth $80 to me."

There's nothing you pay somebody ten bucks an hour to do and think the worker is much more than a robot programmed by a teenager to steal from you.

#17 | Posted by snoofy at 2018-04-13 11:55 PM | Reply

They learn plenty of models, but they aren't often taught to think critically about what they learn.

I personally disagree with broad-brushing the premise, but I can see how it can be true in discrete cases. IMO, much of the utility of attending university is earned from effort exerted in academic and extracurricular pursuits. In the field of economics, it depends on whether one views the field as a deep knowledge base having developed and evolved through history gleaned from and applied to various conditions, or as a series of courses on a syllabus containing exams and projects to be completed before eventually reaching a terminal graduation endpoint. One gets out the effort put into the process.

...leave class with deep reservations over whether economics theories represent real science, or whether economists approach the world...

Noah Smith began with the first concept taught in the intro macro course, the X-shaped supply/demand chart, and his analysis of its drawbacks -oversimplification and the issue of it being based on various assumptions - are spot-on. But he neglected to mention how those straight lines become more detailed and curved as one adds various environmental variables like utility, elasticity, long-run supply curves, etc... which, if one chooses to pursue it, lead to a more math-intensive and tangible discipline of economics: Econometrics.

Why did Noah Smith not mention Econometrics? It would've led to a different conclusion than his native advertising for LSE's philosophy-centric approach (which also sounds great).

A 90second explanation of Econometrics (www.youtube.com)
On Econometrics by Royal Economic Society (7minutes www.youtube.com)

#18 | Posted by GOnoles92 at 2018-04-13 11:57 PM | Reply

Are you willing to work at unskilled labor at under $10/hr?

------------------------

Right now, no. The opportunity cost for my time is much higher than $10/hr - pretty basic economics. As a small business owner, I have done work for under $10/hour in unskilled tasks (sweeping, mopping, etc). As a youth, I did farm labor for $7/hour and was happy for the work. People move in and out of the supply for labor at different price points and at different stages of their lives. Please study up on opportunity cost and the world may make more sense to you. I know your parents were wealthy - did you ever cut the lawn or was that Juan's job?

-------------------------

There's nothing you pay somebody ten bucks an hour to do and think the worker is much more than a robot programmed by a teenager to steal from you.

#17 | POSTED BY SNOOFY

=========================

I don't disagree with you on this. So, why are we importing millions of illegal aliens that are only qualified to do exactly this when we know those jobs are going away?

#19 | Posted by Rex_Buyt at 2018-04-14 12:05 AM | Reply

Why did Noah Smith not mention Econometrics? It would've led to a different conclusion than his native advertising for LSE's philosophy-centric approach (which also sounds great).

Because it blows his entire premise. IMO, Economics and Political Science should be combined into one discipline, but if that happened then the entire socialist liberal bent of most political science departments would succumb to reality, which would put a thousands of aging Marxists out of work.

#20 | Posted by Rightocenter at 2018-04-14 12:08 AM | Reply

IMO, much of the utility of attending university is earned from effort exerted in academic and extracurricular pursuits.
#18 | POSTED BY GONOLES92
--------------------

I disagree with you. The purpose of college is to do 2 things 1.) prove that you are take instructions for 4 years as an independent adult (important consideration for future employers), and 2.) gain the fundamental skills that are useful in the job market. The extracurriculars is purely for networking purposes.

For instance in the case of economics, understanding supply and demand and how different economic systems functions (along with price floors, etc) is very relevant in theory. However, pretending that a calculus based approach to deriving the optimal production point in a manufacturing company (Long term cost curves + marginal demand, etc) is polishing a turd. Knowing how it works and how the different pieces interact is fundamentally important, finding the exact point using a calc based approach is not useful in the real world as it is a GIGO model.

#21 | Posted by Rex_Buyt at 2018-04-14 12:11 AM | Reply

#19 We don't import illegal aliens. We create the demand and they bring the supply, thats capitalism.

What you want is some socialist regulation to alter the market to protect the economically weak.

Welcome to progressism.

#22 | Posted by bored at 2018-04-14 12:31 AM | Reply

#19 We don't import illegal aliens. We create the demand and they bring the supply, thats capitalism.

--------------------

That is pretty much the definition of "importing"

--------------------

What you want is some socialist regulation to alter the market to protect the economically weak.
#22 | POSTED BY BORED

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I have always been for that as that is the nature of our country during its rise - 40 hour work weeks, safe working conditions, etc. The company towns that exploited their workers in the past have transformed into the ultra-rich that control the globalist wing of the GOP and the entirety of the Democrat party. As such, it is 100% progressive to stop illegal immigration into the US to raise the wages and working conditions of the native born. Your open door immigration policy is no different than setting up company town with the goal is depressing wages and keeping the workers poor with the sole exception being that you are doing it on a truly massive, unprecedented scale. Some day, you will mature and understand this simple fact. You support of illegal immigration is the exact opposite of progressive.

#23 | Posted by Rex_Buyt at 2018-04-14 12:39 AM | Reply | Newsworthy 2

#18 The problem with economics is that it was based on the false assumption that market participants are rational actors.
No amount of math fixes that.
Black swans blow up the most complex models.

#24 | Posted by bored at 2018-04-14 01:16 AM | Reply | Newsworthy 1

#23 I don't have an open door policy. I am for brutal punishments for employers that exploit illegal immigrants.

The wall is merely a monument to racist -------.

#25 | Posted by bored at 2018-04-14 01:20 AM | Reply

24 that said, I hire economists (The ones with PhDs, not undergrad kids) to measure policy impacts on populations and build predictive models. It isn't an exact science but it is better than guessing.

#26 | Posted by bored at 2018-04-14 02:17 AM | Reply

"Because it blows his entire premise."

On the contrary, it supports his premise because I have never heard anyone try to bring nuance to supply/demand x-plot.

#27 | Posted by BruceBanner at 2018-04-14 07:59 AM | Reply

If universities are serious about fixing their Economics programs the first thing they would do is to give back Koch brothers donations and take away their power to choose faculty as they do at Florida State University. They have a Libertarian philosophy which they have the power to teach in the Economics Dept. there.

#28 | Posted by danni at 2018-04-14 12:15 PM | Reply

"So, why are we importing millions of illegal aliens that are only qualified to do exactly this when we know those jobs are going away?"

Who's the "we" that's importing illegal aliens? Are you talking human trafficking here?

Because people will pay to have sex with children. Duh.

And, those "jobs" are never going away.

#29 | Posted by snoofy at 2018-04-14 03:19 PM | Reply

"Your open door immigration policy is"

A myth.

We don't have an open door immigration policy, never have, and likely never will.

#30 | Posted by snoofy at 2018-04-14 03:21 PM | Reply

#26 I wouldn't even call it a science.

It's educated guessing and that's about it.

#31 | Posted by jpw at 2018-04-14 06:40 PM | Reply

If you don't want to call it science, you can call it social science. I think that's a pretty good term for it, actually.

I don't believe economists have to get IRB approval to do their work. But, they probably should. Bored might have some insight here.

#32 | Posted by snoofy at 2018-04-14 07:12 PM | Reply

I wouldn't call economics guessing but it often comes with assumptions as goofy as a perfect frictionless vacuum at absolute zero.

#33 | Posted by bored at 2018-04-14 07:55 PM | Reply

#33 it's based on mathematics (theoretical) and historical trends (observational data).

Problem is the theoretical part is untestable to isolate variables and historical data can lead to massive assumptions with little to no expectation for consistency, particularly given the way economies and societies change.

Which I'm perfectly fine with academically, but practically people place WAY too much stock in economics ability to describe let alone predict reality.

#34 | Posted by jpw at 2018-04-14 08:05 PM | Reply

"I wouldn't call economics guessing but it often comes with assumptions as goofy as a perfect frictionless vacuum at absolute zero."

I see what you did there.

Probably the biggest lie in economics is the concept that humans make rational choices. It's just so demonstrably not true in so many circumstances.

As a policy matter, why is it acceptable to impose policy e.g. "run economic experiments" on people without IRB approval?
A student writing a thesis on some social science topic can't even take a survey of other students on campus without getting IRB approval.

Somehow we must not perceive that there has been an economic Henrietta Lacks or Dr. Mengele, or we'd demand responsibility, oversight, and accountability. But there has been a Savings and Loan crisis and a Great Recession, just to name things everyone knows about.

I think we need to hold economists accountable.

#35 | Posted by snoofy at 2018-04-14 10:34 PM | Reply

#35 Probably the biggest lie in economics is the concept that humans make rational choices. It's just so demonstrably not true in so many circumstances.

Yes, that is why Madison Avenue makes money, emotions trump rationality (ha).

I advise policy makers. They do ---- all the time without even an attempt to predict outcomes, they just 'know' their policy is the right thing to do. No ethics review because they are doing the right thing in their mind. They know how to communicate and re-organize, but that is usually the limit of their talents.

I try to encourage them to test policies using randomized trials if practical. But that isn't always the most ethical choice. If there is a way to measure need, then you should apply the intervention to those most in need and use regression discontinuity to measure the intervention affect. If you can't accurately measure need, but you have some measure of outcome risk you can try using propensity scores to compare outcomes between intervention and control groups.

But most of the time they just want to do what feels right and then spin the results later.

I wish there was an amendment that said the government will enact no policy/law without one of the three evaluation methods I mentioned being done first. The second line would say that periodically all policies/laws would require rigorous evaluations to stay in place.

#36 | Posted by bored at 2018-04-15 02:05 AM | Reply

effect.

#37 | Posted by bored at 2018-04-15 02:06 AM | Reply

But most of the time they just want to do what feels right and then spin the results later.

Well, in that regard politicians are finally doing the will of their constituents.

#38 | Posted by jpw at 2018-04-15 02:32 AM | Reply

I've been harping on this problem since 2008.A class on epistemology and ethics will not solve the more fundamental problem that scientific relationships in economics are assumed where none exist. Two powerful forces slow development of sound principles. First most people are inclined to believe those things which they think are in their own best interests. Secondly, once these students are absorbed into a job nothing really matters except short term profits. This second problem has allowed long term planners in Japan to build better products.

#39 | Posted by bayviking at 2018-04-15 07:56 AM | Reply

Teaching ethics is hilarious. When I hear that I laugh out loud.

#40 | Posted by danni at 2018-04-15 09:34 AM | Reply

I had to take an ethics class.
Mostly it taught me how to be unethical and get away with it.
The way to be unethical and get away with it is do something that makes a lot of money.

#41 | Posted by snoofy at 2018-04-15 03:49 PM | Reply

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