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Comment by jotakami | Hacker News Reader

I believe this sentiment is mostly a symptom of the extreme prevalence of charlatans who use economics as a marketing tool rather than a social science.

Economics is really just accounting, statistics and psychology. But mostly accounting. I think people get really worked up about the “unknowable” parts and fail to see that accounting can open up tremendous insights if we only take the time to understand it well.

If you want to learn about economics for some specific money-making purpose, you’ll probably end up with an incomplete view that frustratingly fails to describe reality most of the time. On the other hand, if you approach the subject simply with an open mind seeking understanding, you will be richly rewarded with deep insights about the structure of society and the human condition.

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After reading quite a lot about economic policies it sounds a lot like some sort of engineering - you have some levers/gadgets that you can use, but you have to understand the consequences of each of them and how the interact with the "real world" of companies and people participating in the economy.

Sure, people being certain about what's going to happen and when is akin to snake oil, but using good insight and tools to try and control how people are affected by something like a pandemic seems to me to be the role that economists need to play.

That's the Keynesian view where you can move a lever (cause) and measure the changes (effect).

Unfortunately, there are way too many variables, interactions, etc, etc to have any real confidence in those measures. It's further complicated by the idea that the normal tools (primarily interest rate & money supply delivered via subsidies, etc) are beyond their "normal" operating ranges.

When the Fed rate was 5% and loans were 8%, lowering rates encouraged borrowing. When the Fed rate is 0.25% and loans are 3-5%, qualified people can get all the money they want.. now what? Do they give money to people who can't pay it back (mortgage crash) or spend it on "shovel ready projects" which take 12-18 months to get started?

Alternatively, when consumer spending makes up 70%+ of the economy, consumer confidence is probably the single most important metric.

This is less engineering and more psychology at scale.

That's the Keynesian view where you can move a lever (cause) and measure the changes (effect).

Thats not Keynesian economics at all! Or rather it's a view that people from schools of thought completely opposite to Keynesian also believe.

Does anyone not think this? Eg, Quantitative Easing: does anyone (Keynesian or not) think it does nothing?

Everything does something but it's hard->impossible to directly map cause to effect. The problem is there are numerous causes and effects all playing out at once and they all interact.

Or to put it another way: it's the three-body problem extended to millions->billions of bodies which use psychology+perception as the main force instead of gravity.

also there Nth order effects which are confounding subsequent moves. This is why any idea that a certain party of president leads to good/bad economies is nearly impossible to tell, it could just be a lagging indicator from previous one(s)

That’s why I say it’s mostly accounting—you have to convert reality into quantities before you can engineer it, and accounting is the set of rules for measuring and manipulating those quantities. The difficulty lies in the fact that unlike physics, where units are essentially hard-coded into the fabric of reality, the unit in accounting is money which is a social construct.

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