Why Economists Are Paid So Much
But why do economists have the option to go work in consulting and finance? The answer is simple: They have the technical skills to do so.
Do the technical skills involve an understanding of unsustainable parabolas? It sure seems like this modern and financially innovative economy generates plenty of failures.
I’m not talking about fancy math. No one hires you to do real analysis -- that’s just something economists learn as an IQ test, then never use.
So "fancy math" and "real analysis" are wasted knowledge. Sweet. I'll remember that the next time I'm watching Idiocracy. Luke Wilson sure made me laugh in that one!
If financial companies need someone to do serious math, they will hire a mathematician or a physicist.
Perhaps economist Mark Zandi should have hired a mathematician or a physicist in 2007. As seen below, that's when he was buying a new home in Florida. Might have saved him some serious money. Fortunately, he was able to make serious money to offset it though. As an optimistic chief economist, he seems to have no problem finding work as long as he keeps telling us all how bright the economic future is. Hey, that must be his technical skill!
As for the general equilibrium models that macroeconomists call “math,” well…no one uses those for anything except publishing macroeconomics papers.
Yeah, down with general equilibrium. Boom and bust is the only way to go! Bigger and bigger booms! Bigger and bigger busts! You go economists! That's why you're paid the bigger and bigger bucks!
October 25, 2007
Future Bright, But A Ways Off
On the positive side, Moody's Economy.com chief economist Mark Zandi strongly believes that the bottom in new-home sales is hitting now, the fourth quarter of 2007.
"It's going to be so bad, that it's going to be hard to be even worse in the first quarter of 2008," Zandi said at the National Association of Home Builders 2007 Fall Construction Forecast Wednesday in Washington.
On the down side, this comes from a guy who bought a house in Vero Beach, Fla., in the last year, thinking that he was buying at or near the bottom of the market. Oops.
"It's going to be so bad, that it's going to be hard to be even worse in the first quarter of 2008," Zandi said at the National Association of Home Builders 2007 Fall Construction Forecast Wednesday in Washington.
On the down side, this comes from a guy who bought a house in Vero Beach, Fla., in the last year, thinking that he was buying at or near the bottom of the market. Oops.
Click to enlarge.
It's been 7 years. The future is so bright, I gotta wear Zandi Bottom shades!
Source Data:
St. Louis Fed: Custom Chart
A trader listened to the firm's "chief" economist's predictions about gold, then lost a bundle. The trader was asked to leave the firm. He then angrily asked him boss who was firing him: "Why do you fire me alone not the economist? He is too responsible for the loss." The Boss: "You idiot, we are not firing you for losing money; we are firing you for listening to the economist." ~ Nissan Taleb
ReplyDeleteBigger and bigger booms! Bigger and bigger busts!
ReplyDeleteSo you're saying the best is yet to come! Talk about optimism!
Court jesters of the rich and the famous.
ReplyDeleteNOT!
Just the court jesters of the rich.
Speaking of epic fail... Have you dropped in on HCN lately? Circling the drain so fast it is hard to track.
ReplyDeleteRob Dawg,
ReplyDelete"You idiot, we are not firing you for losing money; we are firing you for listening to the economist."
Oh, my. That's just too funny. Hahaha!
mab,
ReplyDeleteSo you're saying the best is yet to come! Talk about optimism!
I figure Dow 18,000 by year end ought to make Jeremy Siegel pee himself. It doesn't get more optimistic than that! ;)
Luke The Debtor,
ReplyDeleteJust the court jesters of the rich.
Yes! Mark Zandi didn't buy property because he believed what he was saying. He did it because he is a method actor who refused to break character! Genius! ;)
Rob Dawg,
ReplyDeleteHave you dropped in on HCN lately?
I drop in every now and then to see what people were saying about the "Party like it's 1999!" employment theme. I then back out slowly so as not to draw attention to the exit, lol. Sigh.
I figure Dow 18,000 by year end ought to make Jeremy Siegel pee himself.
ReplyDeleteYeah, stocks are rising. And to many, Siegel may appear to be a seer. But if one looks behind the curtain (msm propaganda!) one would see that stocks are rising for the exact opposite reason that Siegel said they would!
Siegel claimed that stocks would rise when real yields rose! What a dope. The Volcker Fed (not the bond vigilantes) raised real yields and stocks got crushed! And today real yields are being squeezed lower by the Fed and stocks are soaring.
Wrong way Siegel!!!!!! When he says zig, it's time to zag!
Word Verification: Gold
Stocks are a much better hedge against financial repression than gold or commodities imo. Mish, Hussman and so many other "experts" are completely missing the boat here (imho).
mab,
ReplyDeleteStocks are a much better hedge against financial repression than gold or commodities imo.
I have this uneasy feeling that a proper analogy might be...
A sharp stick to the eye is a much better hedge against bodily pain than a few solid punches to the stomach.
Before you scoff at the idea, Wladimir Klitschko will be throwing the punches.
So, yeah. Sharp stick please! Hahaha! :)