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Comment by RandomLensman | Hacker News Reader

I don't think economics as such has really any trouble explaining and even seeing potential financial crises.

I would even go so far as to say economics also explains quite well why usually nothing substantial is done to prevent them.

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If economists knew what was going to happen they'd all be extremely wealthy. They are all academics or work for banks making someone else wealthy.

More information: https://www.youtube.com/watch?v=EwB5ihGu4Jw

Economics is not a reproducible science, because no system can be properly isolated and initial state can’t be reset. But it’s still a science. It’s in the same category as biology, or even sociology, and it’s way more accurate than the study of brownian systems like meteorology.

“If biologists were so good at their science, they’d all be extremely healthy”?

“If sociologists could predict what humans think, they’d have a job”? In fact competent sociologists do, and generally in marketing departments. Same for economists.

If a single economist (or anyone) could predict the future, they'd be wealthy because they could bet against the prevailing wisdom. If a lot of people predict the future, and share their guesses, then those predictions are the prevailing wisdom and there's nobody to bet against.

Placing bets successfully needs way more than a general understanding of what might happen (and, of course, capital). Also, you conveniently ignore all the economists that got rich in financial markets over the years.

Name them. Which economists are rich from their theories or is Warren Buffet right about them, because that's who I'm paraphrasing from...

Here's the quote: https://www.cnbc.com/2018/05/18/warren-buffett-explains-why-...

Maybe academic economists don't find it interesting to 'simply' make money and find reward in our endeavours? Plenty of STEM folks could work on Wall Street as quants for way more money, but choose not to.

Paul McCulley (an economist) made certain predictions while working at PIMCO (as did Paul Krugman), and then he left and Bill Gross (PIMCO founder) ignored what he said and made certain financial moves and lost a whole bunch of money:

* https://www.businessinsider.com/this-was-the-bill-gross-blun...

* https://www.nytimes.com/2014/10/03/opinion/paul-krugman-depr...

Gross is way richer than McCulley (or Krugman), and yet the rich guys got it wrong and the poor(er) guys got it right. If only Gross had listened to the economists (that worked for him).

Economists that made it in financial markets (examples): Cliff Asness, Barr Rosenberg, John Paul Tudor Jones, Stanley Druckenmiller, Kenneth Griffin , John Paulson (but that's an MBA) - is that enough billionaire economists for you? What exactly made each rich is a bit more tricky, but certainly Asness and Rosenberg got rich based on their research.

This list is rather disingenuous.

> Kenneth Cordele Griffin is an American hedge fund manager, entrepreneur and investor. He is the founder, chief executive officer, co-chief investment officer, and 80% owner of Citadel LLC, a multinational hedge fund. He also owns Citadel Securities, one of the largest market makers in the U.S.

I don’t see economist anywhere in Ken’s Wikipedia.

Last sentence under Early Life and Education says he graduated with a degree in economics.

You have a very low bar for classifying someone as an ‘economist’. I see why that’s the case as it does help your narrative but does not really lend much strength to your argument in my view.

What then is an economist or a physicist or a mathematician etc. when graduating with a degree in the respective field isn't it? What additional thing needs to be there?

Just saying it doesn't count is a bit weak because that is saying training in a certain discipline and graduating in it has no meaning or skill transfer of relevance.

How about holding that title professionally? Or maybe just having him call himself an economist at some point? But your opinions are just that, and my opinion is your arguments are without merit.

I find it interesting that you know that the people on the list never ever referred to themselves as an economist.

But I guess your point is to make sure that economists don't have any successes, not some deeper introspection into whether the study of economics can help in being successful.

Yup, that did it. I am now convinced that some classes Ken took 45 years ago make him a modern day, professional economist. Guess I’m an economist too! I’m sure Paul Krugman would love the comparison.

By that logic there are no economists or scientist in senior business leadership positions - fair enough.

Yup, just like there few that would consider themselves philosophers just because they took some philosophy classes in undergrad. Glad we have found some consensus on this.

Those are not economists by trade nor profession. None of those people had PhDs in Econ. Never once were they called “economists”

Why does Asness' PhD in finance under Farmer not count, for example? Is a financial economist not an economist, i.e., things like the EMH are not part of economics? Why do you think their training in economics was irrelevant?

The same could be said for climate scientists and geologists couldn't it?

I'm betting they will all be replaced by AI in the coming years.

One reason is that we can now better simulate the rational actors in a market.

What rational actors? Could you share some sources showing that individual economic choices are mostly driven by a cost-benefit analysis to determine whether an option is right for them? As opposed to being driven by habit, emotion, and social customs?

The rational choice for food would not lead to an obesity and diabetes epidemic in the wealthiest country. Something doesn't add up.

AI is even better at predicting mood and emotion. See social media.

Ok, so you couldn't give sources for your first claim, so now you're moving the goal posts.

Let's try again. Can you give sources showing that AI effectively models the economic decisions of non-rational actors? Anyone who can predict the economy should be able to quickly become very wealthy.

I never said we can perfectly model rational actors. I did say we can now do it better than before.

Fair point that you're just making a prediction about future capabilities. I'm not convinced but time will tell.

Don't you end up having a problem with recursion? The people who use AI to predict the rational actors in the economy are actors themselves, and need to be included in their own model. Then you have others trying to predict what that model will say, etc.

Why does nobody keep a score of which economists said what and if it turned out they were right about it?

Because it would show they don't know anything about the economy. Isn't the US meant to be in a recession right now?

Isn’t predicting what we want out of a science, more so than explaining?

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