Wednesday, February 15, 2017

My AMA on r/badeconomics

I did an AMA on r/badeconomics (whose name is tongue-in-cheek, as it's actually much more econ-savvy than r/economics). It ended up being really long, since it was posted a day early. But that just made it more fun! Thanks much to excellent moderator Jericho Hill for setting it up, and to everyone who posted questions.

Questions included:

1. Why do I diss Milton Friedman a lot these days?

2. Which is a bigger problem: 101ism, or the people who say econ is a bunch of neoliberal garbage?

3. Is heterodox econ the antidote to "economism"?

4. Do banks "lend excess reserves"?

5. Which economists in the public sphere do I respect the most?

6. How could the Euler Equation possibly be wrong?

7. Which pop econ books do I recommend?

8. Which economists in the public sphere do I respect the most?

9. What have economists changed their minds about the most in recent years?

10. Is the Permanent Income Hypothesis really "wrong"?

11. Does money need to be "backed" by some valuable commodity?

12. No, really, why do I hate Milton Friedman so much?

13. How did I develop my writing style?

14. Does Bloomberg pay me enough? Am I not afraid of life without tenure?

15. How does one get started being a blogger?

16. Neoliberalism is out of favor these days, so why keep on bashing it?

17. Who will be the next great public explainer of economics?

And more! A fun time was had by all. Check out the whole thing here.


  1. Part 2

    In methodological terms, economics is in dire need of a paradigm shift from false microfoundations and false macrofoundations to consistent macrofoundations.#3 Therefore, it is rather straightforward to identify proto-scientific rubbish: if it isn’t macro-axiomatized, it isn’t economics.

    The beta-fake: What does the absence of expected facts, that is, of a materially and formally consistent economics mean? It could mean (a) that ALL orthodox and heterodox economists are incompetent scientists, or (b), that the dog cannot be heard barking, that is, the true theory exists but all hints and pointers are either promptly covered, explained away, diluted with floods of irrelevancies, or as far as possible removed.

    Neither Orthodoxy nor traditional Heterodoxy has the true theory. Why exactly? It is imperative to distinguish between political and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics the scientific standards of material and formal consistency are observed.

    Political economics has produced NOTHING of scientific value in the last 200+ years. Theoretical economics has been hijacked since the founding fathers by political economics. And politics cannot do other than to corrupt science. The modus operandi of politics is to promote the own agenda and to hinder everything else. Political economists do not to produce or promote scientific truth as an end in itself but applies the outer form if and insofar as it seems to help the agenda. Scientific knowledge that lies outside the agenda’s perimeter is ignored, blighted, hindered, covered, or suppressed.#4 Where policy dominates the dog’s barking cannot be heard.

    The good thing about alpha-fake is that it is possible to spot it. Beta-fake is invisible. How to deal with it? Beware of top ten charts, beware of two-way promotional expert talk, ignore the recommendations of the representative economist, pursue his denunciations. In economics, which is a cargo cult science, it is the absence of expected facts that points the way to the missing truth. When both orthodox and heterodox economists, which have proven their utter scientific incompetence over 200+ years and are still wondering about the supply-demand-equilibrium shades in Plato’s cave, dismiss an alternative approach there might be great reason to allow this approach to be true.

    The specifics and differences between the four false economic approaches is cave dweller blathering stuff. The absence of the true theory is the only worthwhile issue of economics.

    Egmont Kakarot-Handtke

    #1 Wikipedia
    #2 Wikipedia
    #3 See ‘From Orthodoxy to Heterodoxy to Sysdoxy’
    #4 The violation of scientific standards/ethics is the very definition of political economics. The question is not so much whether it happens but to which extent. See

  2. That was worse than reading the comments here.