Why economics is not a science
Money manager Barry Ritholtz comments on the wrong concepts about the stock market held by many economists and MBAs:
The tenacity of bad ideas is quite astounding. Just because something is wrong, and verifiably so, does not seem to have much immediate impact. It remains a staple of academia, as well as the actual practice of investing — despite its questionable truth.
It’s not just investing where wrong ideas persist in spite of the facts. Depending on their ideological persuasion, many economists set up models and theories of how things work and never change them no matter what actually happens in the economy. That is why economics is a long way from being scientific. Economists may use a lot of high-powered mathematics but mathematics can’t remedy bad initial assumptions based on faulty ideas about human behavior.
In science, we constantly test our theories with data from the real world. No matter how much we may cherish a theory, we have to modify or even discard it when it doesn’t agree with the facts. Not so with much of economics where ideology, not facts, provides the framework. When the economy doesn’t improve from policies that are supposed to fix things, economists don’t reassess and look for a different approach—they cry for more of the same.
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First, I want to put a little personal context for my basic agreement with your premice, Then, as a favor I would like you to answer a question I have regarding your script for cleaning the two temp files in Windows XT, is this ok?
I think my point of view is that the current TV news obsession with the performance of Wall Street, at best a frorm of entertainment, and at worst a window that reveals how subjective we think the “truth” or the “Truth” has become. My opinion has to do with the initial assumptions about ethical values in the society which no economic model I have read of, gives much shift to.
Perhaps you can recall when the TV Business news regarding the daily performance on Wall Street was a brief PowerPoint looking table of the 3 major Stock markets and their values for the day. Gradually it seems that has become more detailed and given an introspective analysis. Secondly it seems the most enthusiastically reviewed new books on the NYTimes Books web page are economic books. I have been caught up in this trend,my last 2 books were 2 economic histories of the world. In my opinion the mirror of our national soul is being point more and more towards materialism. Of course we need material things to survive. But I think this capitalistic system has gotten out of hand, and there are too many social forces who benefit from this growing obsession to try to moderate its influence. Competition, which I think is at the heart of any economic system is good if it brings out a refinement of our character. For example we should compete with what we were yesterday to be more honest,to be kinder, to practice the volunteer spirit, etc. And yes, people should be materially rewarded for their efforts. But we avoid talking about the ethics which make any system work. We assume that people will take their thumbs off the scales when they want to apply an economic model because rationally, “it’s in their own best interest”. However our competitive spirit is being transformed because of our unrestrained desires, creating a kind of social “satanic” fantasy. And I don’t believe in the existence of Satan, but I do believe that in a society which does not reinforce and support respect of a Higher Power, will unwittingly create a lower one of equal strength. I am not advocating a state sponsored Judeo-Christian economic model, I think all the major religions are in core agreement from which an economic model should fundamentally recognize. This is one reason why economic models fail to deliver expected results, in my opinion,
My other request, I wanted to download the more detailed script of the lines in the command line which you summarized in cleaning the two temp files. But when I attempted to open the file, an error message, for line 19 “Could not create an object named WS Script Shell” so the file, clean_temp” could not be opened.
Can you help me understand this? I am having a great deal of problems to execute a movie^transfer software to my iPad.