Saturday, July 12, 2014

How stupid are economists?

In 2002 Ben Bernanke gave his famous helicopter money speech, explaining that fiat bankers sometimes need to reverse the flow of funds.  Any college class in probability will tell you that a bell shaped random distribution must be composed of additives and subtractives. This follows from the minimum phase property.

In 2005 Ben discovers that raising rates causes prices hikes.  This is the Wicksell error, a 150 year old error in banking theory that has confounded five generations of economists.  A simple calculation of the steady state flow, in one direction, would show this to be the case.

Romer  engages in this immense statistical fraud to show multipliers are 1.5.  How did she get that? I dunno, but all you need is a steady state, unidirectional of flow by the fiat banker to its capital owner. Plug in the relative wealth of the capital owner and the formula spits out the multiplier needed to maintain steady state.

This is simple stuff. Why not abolish the economics departments everywhere and just create a math department called aggregate statistics.  This is Prescott's idea, it is time to turn over the economics business to the experts.

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