Discussion Tuesday

The quote comes from Emanuel Derman, here: http://www.theguardian.com/money/2014/sep/21/-sp-thomas-piketty-bestseller-why

“My gripe with economists is not that their models don’t work well – they don’t, look at the role of central banks in the financial crisis – but that they seem so reluctant to acknowledge the riskiness of their advice. And yet, beware their fearsome unelected power. Anyone visiting from Mars last year and asking to be taken to our leader would
undoubtedly expect to meet Bernanke.

As a result their public arguments have an incestuous yet masturbatory quality that is exhausting to follow. The only field more self-confidently but just as regularly wrong as economics is nutrition, whose recommendations to shun butter/margarine or red meat/carbohydrates regularly reverse themselves.”

Best-guess-translation: Economists swap mathematical models, nodding sagely as if these models reliably predict important real-world events. Yet these models are regularly revealed to be flawed or radically incomplete. This self-gratification is of no relevance to non-economists.