AUSTRIAN ECONOMICS ADDICT

In my previous post Federal Reserve Policy Makers Have An Incestuous Intellectual Relationship With Each Other, we talked about how our political aristocracy and the intellectual elite have no knowledge outside of their vision of the world, a vision which was inbreed into them by their education, their job, and the people with whom they associate. This video, from economicpolicyjournal.com, is an example.

SELF PROCLAIMED INTELLIGENCE

The interesting part of this video is Geithner’s inability to realize his narrow experience is a bad thing. Going from grad school directly to the Treasury, then spending the rest of your professional life in a policy job, isn’t a recipe for developing a wide base of knowledge on which to make policy decisions. The policies they come up with won’t work anywhere outside of the sterile intellectual laboratory that exists only in the minds of these policy makers. If all they do is think and talk to each other inside this feedback loop, their theories are never challenged intellectually nor tested empirically.  Science is a process for disproving a theory, not for proving it correct. Theories that have been observed to produce the same result over time have been accepted as true, but this doesn’t mean they have been proven to be true. Every theory is one experiment away from being proven false. In the world of physics, a theory can be isolated and observed much easier, because the properties of all the variables in laboratory experiments, are predictable or constant, however the economic laboratory is the real world, where every individual is a variable. What each individual values, is constantly changing as life’s circumstances constantly change with the passage of time. This fact alone makes the stated desires or goals of any policy decision exponentially harder if not impossible to achieve in the real world. Most of the time the outcome won’t be what was hoped for, and the very people you want to help, are the people who are hurt. Minimum wage laws are an example of this.

INTELLECTUAL SPIN DOCTORS

For the intellectually inbreed, the fact that they cannot isolate their theory isn’t a curse, it is a blessing. If, after the implementation of their policy, there is improvement, they can take credit, even though other variables may have been the reason for the improvement. If the outcome doesn’t produce improvement, they can blame any of the other numerous variables, or they can always say that things would have been much worse if they hadn’t implemented the policy. All politicians and bureaucrats are masters at spinning the results of any actions for their own benefit.

INVESTED IN THEIR VISION

At some point these people become so invested in their vision that the cost of giving it up, both financially and from the stand point of their ego, is too great for them to bear. Inbreeding produces weaker offspring. They are going to produce a weakened intellectual ability to logically defend their fragile economic policy positions. Their only hope is their ability to spin, the news media’s desire to report the spin as truth, and the public’s ignorance about economic principles which allows them to be spun. We can all become more educated about economics without getting a degree in economics. The ability to get information and learn on-line has changed the intellectual battlefield. In fact I think we can learn more about economics without getting a degree, because working toward a degree puts us in a position to be intellectually inbreed if we’re not careful. The information is out there, it is our job to educate our economic ignorance because uncredentialed knowledge in a particular area is better than credentialed ignorance in the same area.

This entry was posted on January 28, 2013 at 2:25 am and is filed under Econ. 101, Government and Politics. You can subscribe via RSS 2.0 feed to this post's comments.

Tags: Economic Education, Fed Policy Makers, Federal Reserve System, Intellectual, intellectual elite, Timothy Geithner, Treasury