Me keep rubber nose...fuck this idiot!

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May we have the clarity to see what is required of us, the courage to accept it, and the capacity to discharge it.
Robert Fripp

I first saw this story on 6.28.10 over at ZeroHedge here:

http://www.zerohedge.com/article/fed-has-lost-it-publishes-essay-bashing-bloggers-tells-general-public-broadly-ignore-those-w

Today a follow on was posted and the Michael Rivero portions seems to have been calibrated along Numerian specs. You guys should call each other up and see if you will be wearing the same clothes to the slumber party. :)

http://www.zerohedge.com/article/did-fed-economist-slam-bloggers-same-reason-fundamentalist-priests-slammed-printing-press

For instance, the Federal Reserve's number one task, as everyone knows, is:

"Conducting the nation's monetary policy by influencing monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates."

Zero for three . . . so very hard . . . to do all that research and focus grouping to make sophistry seem wise, villainy noble, and larceny virtuous, with such conviction and utter seriousness that you convince even yourself, and see fit to patronize the likes of Robert Reich and Paul Krugman.

So hard. . . .

I have a shorter response to Athreya:

Untrained people will give the economics profession the deference it seeks when and if the economics profession has a track record to deserve it.

Most people respect the work that engineers do in their respective fields because engineering has a demonstrated track record of designing things that work.

The economics profession, in contrast, has a comparable predictive ability to astrology and the curative efficacy of leeches.

If economists want deference, the mainstream economics profession needs to develop a track record on par with engineering. Suggesting that every economic problem can be solved by giving our money to the rich isn't good enough.

Surely someone somewhere downloaded the paper. Or maybe it can be found in Bernanke's prayer book.

http://mauberly.blogspot.com/

The Telegraph, By Ambrose Evans-Pritchard, June 29

Like a mad aunt, the Fed is slowly losing its marbles.

Kartik Athreya, senior economist for the Richmond Fed, has written a paper condemning economic bloggers as chronically stupid and a threat to public order.

Matters of economic policy should be reserved to a priesthood with the correct post-doctoral credentials, which would of course have excluded David Hume, Adam Smith, and arguably John Maynard Keynes (a mathematics graduate, with a tripos foray in moral sciences).

“Writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams), cannot meaningfully advance the discussion on economic policy.”

Don’t you just love that throw-away line “decent”? Dr Athreya hails from the University of Iowa.

“The response of the untrained to the crisis has been startling. The real issue is that there is an extremely low likelihood that the speculations of the untrained, on a topic almost pathologically riddled by dynamic considerations and feedback effects, will offer anything new. Moreover, there is a substantial likelihood that it will instead offer something incoherent or misleading.”

You couldn’t make it up, could you?

http://www.scribd.com/doc/33655771/Economics-is-Hard

My favorite line: "I work as a rank-and-file PhD economist operating within a central banking system. I have contributed no earth-shaking ideas to Economics and work fundamentally as a worker bee."
Apparently PhD's are not given for brilliant thinking, but rather, for absorbing orthodoxy. Maybe that's the problem.

Several readers were kind enough to send it to me. It is still delisted on the Richmond Fed website.

I can't say I am a better person for having read the whole thing. As late as the early 20th century, the discipline of economics was known as political economics. It was expected that trained students of the discipline would make the connection between economics and politics.

By the time Keynes got to publishing The General Theory, economics had already veered off into a sub-branch of mathematics, in which it was necessary to have tools such as calculus to model how the economy worked. This lent a pseudo-scientific veneer to economic discussions.

Dr. Athreya is steeped in the modeling/mathematics business of economics. His models have to be internally consistent and rigorously vetted by other professionals. As he says, 80% of the papers submitted for publication are rejected on these grounds. His paper about the blogs laments that publicly influential people, some of them economists, can say any old thing about the economy without anyone approving what they say. This allows silly and erroneous discussions to dominate public discourse. Ipso facto, bloggers have nothing meaningful to say about the economy.

I happen to approach the economy from my perspective as a trader and keen observer of the markets for most of my career. Traders have to understand something about the economic reports and data which move markets. Many traders develop significant expertise on economics - see Bondad, whose opinions currently I disagree with, but who is mighty good at economic analysis. I've actually made money from some of the things Bondad has written, whereas I have never heard of Dr. Athreya or hardly any other economist at the Fed, all of whom seem to work in obscurity for an internal audience at a highly insular institution. Even Dr. Athreya admits he himself has contributed nothing significant to the field of economics.

Making money is not necessarily the best yardstick by which to judge someone's economic opinions, but certainly Dr. Athreya, if he has a complaint about bloggers, has a much bigger complaint about tens of thousands of traders, financial analysts, market analysts and others who routinely write about the economy. This is how they make their living, and their advice shapes investor attitudes and actions across the world.

It seems the core complaint of Dr. Athreya is that no one is listening to him or his colleagues, but instead to paid or unpaid bloggers who don't deserve an audience. Dr. Athreya would use his time better if he analyzed why this was, rather than attacking bloggers.

So, there is political economics like "environmental economics" and "Marxist economics" which have been discussed somewhat on The Agonist lately. These kind of questions are solved by voting, bullets or by the elite. Bloggers write much on these.

Choosing a political perspective to economic policy does favor some groups.

Krugman etc. write popularized economics, prose. Usually from some kind of political perspective.

Then there is science based economics based on models and data. Or should be. Often this is politicized and biased too. When your only tool is a monetaristic or Keynesian hammer, all the problems look like a nail.

You usually read some babbling and prose on Marxism but there has been some serious studies too trying to measure it with the same concepts as market economy. In the core of market economy at microlevel is the theory of demand, supply and pricing. Because all these three were fixed in Soviet Union by GOSPLAN, was it simulating the interaction of demand/supply/price?

What comes to these Fed clowns, did they really think that they just need to create some interest rate policy and financial regulation, like laws and SEC, will become unnecessary? Do these Fed clowns really think that their models can model financial fraud and its financial consequences?

_{-- Thinking inside the box maximizes risk adjusted profits}