The Federal Reserve, through its extensive network of consultants, visiting scholars, alumni and staff economists, so thoroughly dominates the field of economics that real criticism of the central bank has become a career liability for members of the profession, an investigation by the Huffington Post has found.
Let me give my personal experience:
As a signal processing engineer, I had a large tool kit, and the data did not object to what tool I used. If I tried something different with the data, I never heard gasps of hysteria. When I looked at economics, I found the data objected strongly when I used different tools. Mish, I think, discovered this.
I concluded that a true economist steps back, far enough back such that the data cannot complain, far enough back that the entanglement, our bounded functions, intersect only enough to leave the data with most of its imprecision.
Bad economists jump too far in with the data, become part of it. The distance back the economists steps is one of the parameters to measure. Economics needs to be a hobby to work it right, or a minor side affair that an investment advisor must deal with.
Consider Keynes, he thought economists should be part of the expectation norm, jump right in, the result being that his entanglement prevents him to consider other measurement norms.
If Bernanke thinks his job is to make policy, then he might be stuck when someone discovers that no such policy powers exist, he would have his Wyle E Cayote moment. Remember the idea that Greenspan believed in free markets? The obvious barely occurred to him, the central bank is socialist, barely crossed his mind.
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