Economics Smuckonomics
To (mis)quote the famous saying an economist "is an expert who will very seriously explain to you tomorrow why the things he predicted yesterday didn’t happen today. (and make you pay for telling you so)."
You will note that this definition is very close to that of a politician who "is a person who will explain you tomorrow why the things he promised yesterday didn’t happen today. (and why you need to pay more taxes)."
Economics masquerades as a "science" but when all is said and done is just a messy pile of theoretical models so remote from reality than their predictive power is close to 0. Somehow there is always an excuse for the prediction of economists to fail - it's not their fault if this this annoying reality stubbornly refuses to follow the elegant arbitrary equations of economics.
In a nutshell economists predict what will happen "if nothing unpredictable happens" (nice caveat isn't it).
The reason is that, at the end of the day, economics is "made" by people through their individual daily decisions, in other words economic trends are not the result of abstract equations painted on the wall of reality by the infamous invisible hand. Economic trends are rooted in human psychology and that is hellishly difficult to predict.
What will make people (and banks where decisions are after all made by humans - err at least I think so) feel positive and confident to invest? What will scare them away and generate a bank run? What new technology will radically change our lifestyles? Which products will become the next "must haves" and which ones will suddenly drop in oblivion? That's what drives economies.
If you could predict future events and model human reaction to them - with some level of confidence - then you would have a useful economic model. And also a magical tool to become a billionaire investor real fast.
So the day where you will see economists suddenly become fast track millionaires (and probably bust the market doing so :-) then you'll know economics has come of age.... until then it's just a very fancy snake oil extract.
Biting the hand that feeds IT
