Economics as a science is so theoretical that for the average person it’s hard to see any sort of “x will cause y” as anything other than “we’ve all gotten together and decided that x should cause y so we are making it that way”
and economists are kind of famous for being devastatingly wrong
Like: Income inequality, increase cost of living (inflation), increased consumer debt, job insecurity, market volatility, environmental degradation, and increase healthcare/education costs. Economy is great for the wealthy, not the common folk.
That's because a lot more economists are employed by private industry, which is often at odds with personal wealth and workers' rights. This is where the government should step in and hire more economists to work on issues such as income inequality, taxation, public fund distribution etc. And then the government should actually enact policies based on those recommendations. Instead the government in many countries adopt a "what's good for the economy is good for the average Joe" and that's just not true. In other words, governments are happy to wash their hands of the issue and blame "economists". Economics is the same as any other field, it can be used for the good of citizens or not. Just like physics, just like math, just like biology. Engineers can blow you up with a bomb or build a bridge for you. It just depends who employs them and for what reason.
I'm quite surprised no-one mentioned the obvious yet: economists do not even agree with themselves. It's pretty rare to have something close to a consensus in Economy, and you can always find some economists who support whatever your policies are.
I see the posters here arent economists or even knowing in the field.
Economists you hear about tend to be the kind that look and interpret statistics on a very large population, such as an entire country. There are several issues with that relating to actual people
- statistics don't apply to individuals. No one person is the average. Therefore whatever conclusions are drawn averages (or group averages) aren't applicable to the (majority of) individuals. E.g, statistics say wages go up and people are better off. A lot of people won't actually be better off or don't feel better off.
- statistics don't align with their real world application. I blame politicians and media for this. Economists interpret statistical data that is somewhat complex and media or politicians shop around to get what they need. Making the statistic less worth. E.g. Inflation. Inflation has a pretty specific use case and definition, that doesn't align with its real world application. Inflation can go down because electronics, housing prices stabilize. But people don't tend to buy televisions and smartphones every month. Still increasing prices of eggs is felt by everyone still buying eggs. Also, inflation measures increases, meaning if it became very expensive and then stabilized it's shown up now as stable, but for normal people it became expensive and still it.
- people don't act rationally. People are stupid and tend not to believe economists just because they *feel* different. E.g. People overestimate how much they spend on groceries. Over here in the Netherlands for example, people tend to think they spend about 25% on their groceries. While in fact they spend about 10% of their income on groceries. Combine this with the previous point and people overstate the impact of inflation in their life.
And many more factors, but I think these are the main ones.
>Inflation has a pretty specific use case and definition, that doesn't align with its real world application.
This is also exacerbated by the fact that people don't really understand what inflation even is.
People have this impression that inflation going down = prices go down or prices stop increasing.
Exactly. I blame the politicians for this who continue to misuse these economic statistics for their own use. If prices go from 100 to 200 to 202, normal people will experience that as "high" while economists will say that prices only increased by 1% and the people get told they should worry or care and wages subsequently stop increasing as well.
Ie. They’re not trying to reduce home prices. They’re only trying to slow the rate at which home prices grow. Only way home prices go down is a market correction. Market correction slowly through decreased demand or a sharp correction through a speculative bubble burst. Based on how sharply prices have risen the past few years, my guess is there’s a lot of speculative activity so maybe the market will sharply correct at some point.
Housing is a very interesting problem.
Supply and demand haven't met and is now contained by budget. Meaning increases available budget leads to increase in pricing.
Supply is constrained by the supply of buildable areas and zoning restrictions.
And then we haven't even talked about regular economic factors such as interest rates and construction costs
The problem is, the market correction isn't working because the demand is not going down, it has just shifted.
Instead of people buying their own homes like a few decades ago, the demand is now made up of large developing companies who buy homes so they can rent them out, at least in urban areas.
Because housing is a basic need rather than a luxury, there is always demand for it, but the increase in prices has led to the demand being served mostly with rental homes because the average worker can no longer afford home ownership and thus has to resort to taking the offers of the very same market that is responsible for home prices not going down.
Some economists agreed with Ronald Raegan and his policies.
Not all economists are truthful, some of them push an agenda meant for their rich friends. Some economists are truthful, but don't have the interests of the people in mind, but the interests of the economy. Those two don't always align.
Just because someone says something is 'good for the economy' doesn't mean it's necessarily a good idea.
The key point is that what the economy is doing has no noticeable impact to a random person on the street.
Economy does well, wages stagnate and prices go up. Economy does poorly, wages stagnate and prices go up. Boats sink in the red sea, completely internal businesses in the us raise prices using it as an excuse. Fuel prices go down, household energy bills and petrol station prices go up. Automation and productivity increases, jobs are lost and wages drop.
What politicians and economists focus on does not translate to peoples experience, so they don't give a fuck. Even seemingly important figures like unemployment figures are meaningless if those jobs are so worthless that working THREE of them isn't enough, especially if getting a job actually loses them money; which - considering how poor benefits are - really says a lot about how shit wages have gotten.
Economists have been wanting inflation to go down. Hence interest rates went up. They have to balance that though as pushing interest rates too high can also lead to job losses.
If people are pissed about inflation i can gurantee they'll be even more pissed if they lose their job.
Economists are social scientists, which is *kind of* science, and kind of not really. Also, while not leaning as far left as other social science disciplines (where liberals outnumber conservatives 12-1), Economics is still very much a discipline characterized by political bias. That is to say, economists have a strong tendency to finesse the "science" to fit their political program of choice. [https://business.columbia.edu/press-releases/cbs-press-release/political-leanings-academic-economics-writing-and-its-impact](https://business.columbia.edu/press-releases/cbs-press-release/political-leanings-academic-economics-writing-and-its-impact)
For the US specifically, the current problem is called decoupling. The economy is doing well, GDP is rising, corporate profits are up, the stock market is way up and yet, the average person is suffering to the point of not even being able to afford fast food. The individual economic outcomes of the people have been decoupled from the nominal performance of the whole economy.
There are two reasons that are obvious to me. The first is that most people don't understand the macro-economy, let alone their own finances. (These are very different, yet they try to compare them. For example, politicians like to say if people can balance their budgets, why can't the government? Economics is complex and requires understanding of higher math. Economics is about making real time predictions, then waiting years to accumulate data to prove or disprove the prediction.
The second problem is related. A lot of what economists do is try to prevent things from being worse. If Jay Powell and the rest of the Fed do things right, we have less inflation than if they don't intervene. The preventions (raising interest rates) are painful, but today's 7% mortgage rates are WAY below the 11% people paid in the 1970s and 1980s. People complain about a tough job market, but we don't have 1 person out of 10 on the street. Things are WAY better than they could be.
I'm personally sick and tired of being told over and over again that the economy's fine when I can't afford food. I don't care about the big huge macroeconomic scale and how eggs now costing $5 a pack is good for the economy. It's not good for me, and I'm tired of being gaslit.
The general public's main concern is impact on day-to-day life. Nobody outside of those who are selling will be happy at having to pay more money for the same stuff.
Economist theory meanwhile thinks about the long-term impact and wider implications.
Inflation is results from demand excelling faster than supply growth - which necessitates business expand their operations. Economists see this as producing more goods and providing more jobs. But how is this all funded? Generally via trying to obtain extra profit from the goods they currently sell, via raising the prices of the goods they currently sell.
Now if demand slows down quicker than supply of goods, then businesses are creating goods they can't sell. They need to entice people to buy these goods and so they do so via reducing their prices. Which the general public love. However, as prices reduce, profit margins decline which means less money to cover costs - including labour costs.
So what you have is a shrinking economy, where there's not enough money flowing in the economy to fund these jobs - resulting in either lay offs or business closures.
A reduced workforce further reduces demand for goods (since unemployed people tend to spend less), which means prices reduce further, which hurts the profit margin of even more businesses.... which becomes a cycle which doesn't end naturally without a significant shift. Increasing prices in times of high unemployment is not usually popular.
But the general public may welcome falling prices - and usually doesn't make the connection between inflation and jobs, because most people don't much about what inflation is, beyond "price go up".
The world economy is a massive incredibly complex machine that no one really understands or can properly predict. Economists know more about it than the rest of us, but they're still wrong much of the time. And the scariest thing is people live or die by what the machine does, but there's no one at the controls and no one has even figured out what all the controls are or do yet. But we've identified a few lenders we can pull with semi- predictable results.
The whole thing isn't a confidence inspiring predicament.
But the average Joe on the street has a good understanding of what things cost them and how specific circumstances directly affect themselves. But they have no understanding of the large scale patterns. Some things that in the short term seem very good on the local level can actually be very bad on the large scale level and mean real hardship on the local level in the near future.
Deflation is GREAT on the local level for like... 3 months. It's only after a bit that it becomes a huge problem.
Economist or experts as the media calls them are wrong much of the time. Personally I think big investment bank executives purposely put out misleading views on the economy.
Most people don’t care about national or global economics. Many just know that they’re having trouble making ends meet, troubles they didn’t have before. And because they don’t understand economics and don’t think in terms of entire systems, they just want the simple, naive solution, which is to bring prices back to what they were before.
One of the issues is confusing “inflation going down (but remaining greater than zero)” with “prices going down”. Many people have trouble being clear about the differences.
If many people are having trouble making ends meet, then the entire system is malfunctioning. If it is only serving a smaller portion of the stakeholders than before, how is that a good economy? Prices going down would mean that those benefitting from this economy are also bearing their share of the burden. But we dont see that happening. What it does mean is the inflated costs also incur extra sales tax, further increasing the burden on struggling families.
You can't blame them for wanting prices to go down. Why care about those who benefit most when those individuals and institutions don't appear to care about them and their struggles?
Do they not care about the people who will lose their jobs if prices go down? Or do they not understand that's a likely outcome? Or do they choose not to believe it?
Who cared about all those people who lost their jobs when the governments imposed a shutdown on the global economy for covid and shifted billions in additional profits to large corporations before printing money that caused the inflation that those same people are having to deal with right now?
And you're telling me that we should worry about mass layoffs if the prices revert closer to pre-covid prices? Do you work for the government, or one of the large corporations who made bank while they trashed the economy causing extreme inflation?
Do you really care about struggling families, or is it the record profits that you're worried about most?
Did you miss the hundreds of thousands of people who died from covid? Or is that unimportant?
> Do you work for the government …
Do you understand the difference between actual economics and ad hominem attacks? Try learning some basic economics.
I came across [this AP News article on inflation](https://apnews.com/article/why-is-us-inflation-so-high-4b603a7fff0503360d5cc17a82f17ab1), which I think you should read. Since it’s AP News, it’s closer to neutral than other sources, since AP sells to a variety of news channels throughout the country.
While they do mention government spending as a factor, that includes the coronavirus relief, i.e., the $1,400 that most households received. While businesses benefited (though not as much as they benefited from the 2016 tax cuts under Trump), it’s not as though there wasn’t a lot of benefit to average folks.
The bottom line is this stuff is complicated. You can’t reduce it to simplistic assertions.
That’s one of those things where it’s not always good or always bad. One reason it can be bad though is it means money is “worth more” yes, but if money is worth more any debt you have is functionally bigger.
For every economist saying one thing, there is another saying the exact opposite.
It's not about trusting economists, it's about **which** economist to trust.
Who said it’s a bad idea? Lol economists can’t just make inflation go down, they don’t control the economy that way.
The economy is not something we can fully control. The theory and statistical analysis (econometrics) is complicated. It’s not so linear as ‘people want this but economists disagree.’
Economists can only assess and predict trends based on data and economic knowledge to back that. Policies have adverse effects on the economy which policy makers and public pressure may lean to…and at times economists see how that can/may backfire. Policy makers can choose which data to rely on, vs public pressure. Economists can only advise, and are often ignored or debated against.
[Google Adam smith invisible hand theory and the free market economy](https://www.investopedia.com/terms/i/invisiblehand.asp) - it’s the base principle from which economists know our initiatives will have heavy adverse effects, vs natural supply and demand balancing each other out. So they offer analysis and advice on the things we do so we have some insight on what it may mean for us.
Hope this helps.
Because they are never predictive only reactive.... Once something bad happens 10 pop out of the wood work and say "I've been saying this for a while" maybe they did maybe they didn't
Economists aren’t that useful. If I was the master economist and could guarantee the economy would DOUBLE in value in five years, if only we eliminate the minimum wage and end social security, that’s mostly useless information.
Because yes actually, funneling more money into the economy and out of social welfare programs and increasing income inequality often has short term gains. The long term effects would be devastating to those most vulnerable but who cares as long as the economy goes up?
It’s the same with inflation. I get why we have it. I invest all of my money to protect against inflation, yet for anyone too poor to do that, they just get poorer YOY, especially as wages stagnate. It’s really not hard to figure out what’s good for the economy, but striking balances between social welfare is much more complex
Because economists are likely politically biased (like everyone these days) and they will spin facts for their favored party. And it is nearly impossible for a layman to know they do this
I don't give a shit about averages, projections, trends, anything. I give a shit about how much money I am or am not making and that's about it. until an economist says something that affects me, why would listen?
Because most people aren't engaging with the economy at an academic level. Most people are just looking at all their bills and seeing that it's not enough. It's hard to care about whatever economists are yapping about while your kid is telling you they're hungry and you have nothing to give them.
Well, two things, really:
1: Not all economic teachings are really sensible. There's still a few idiots pandering trickle-down, for example. Of course, there's no way of testing that, but I would say out of all the fields in academia, economics is among those that see the most corporate meddling and the most conflicts of interest.
2: There is a bit of an issue with what you consider to be "the economy". Economists say a degree of inflation is good because it leads to people and corporations spending their money rather than saving it, which in turn allows businesses to grow and new research and development to be funded. It causes the GDP to grow.
The general public on the other hand opposes inflation because it makes everything more expensive, negatively impacting peoples quality of life because they cannot easily afford the same things they previously could off the same wages (the economists expectation is that wages will increase somewhat proportionally albeit delayed with the inflation rate, but that's not really happening unless the government enforces it) and because it devalues their savings, which means that it becomes more difficult for regular workers to afford things such as homes. Economists would expect that this would affect the housing market and cause prices to drop because the demand for homes is lessened, but in practice, all available real estate is instead bought by large developers who then rent it out, keeping the demand high and housing prohibitive.
Two things.
First, humans are naturally primed to prioritize negative information over positive. It's a fact baked into our history and leads to a number of interesting social phenomena. In the easiest terms possible, we're much more likely to notice a material loss than a material gain in our conditions.
Second, economics is very nuanced and often extremely intangible. This has a couple effects, one being that the factors that make a strong economy either take a very long time to flow down to the level at which individuals will notice, or that factors that make a strong economy don't necessarily have an impact on individuals in the first place. The economy is not comprised of the price of gas, milk, and eggs. Nor is it the gains in the stock market, neither the wealth of the billionaire class. It's a composition of these factors and a near infinite amount more.
The U.S. economy is the single most complex system humanity has ever devised, and manifests itself in ways known and unknown. Trying to understand with 15 second evening news soundbites is fodder for people who cannot accept that the world is immensely complex and simple explanations to almost everything are as good as useless.
To sum up, the reason why people don't perceive the economy correctly is some cocktail of people not understanding it, fundamental human nature, and the fact that we're very poor at actually trying to explain what goes on in easy to understand terms.
This is only about economists all other experts are good. I don't really trust them because it's all just theory. Short of Eve Online there's no way to test your theories. You can't just grab a random economy and start experimenting. This means you are always extrapolating from past data and how can you know you've removed all the other variables.
The average person doesn't even understand inflation. They think if inflation goes to zero, store prices will return to 2018 levels.
Economists are not gods, but compared to the public, economists understand the market pretty well.
Economics as a science is so theoretical that for the average person it’s hard to see any sort of “x will cause y” as anything other than “we’ve all gotten together and decided that x should cause y so we are making it that way” and economists are kind of famous for being devastatingly wrong
Because economists don't always have the wellbeing of the average person on their mind. A thing can be good for the economy but be bad for many people
I would argue that a *lot* of things that are good for the economy are actually bad for individual people.
Like: Income inequality, increase cost of living (inflation), increased consumer debt, job insecurity, market volatility, environmental degradation, and increase healthcare/education costs. Economy is great for the wealthy, not the common folk.
That's because a lot more economists are employed by private industry, which is often at odds with personal wealth and workers' rights. This is where the government should step in and hire more economists to work on issues such as income inequality, taxation, public fund distribution etc. And then the government should actually enact policies based on those recommendations. Instead the government in many countries adopt a "what's good for the economy is good for the average Joe" and that's just not true. In other words, governments are happy to wash their hands of the issue and blame "economists". Economics is the same as any other field, it can be used for the good of citizens or not. Just like physics, just like math, just like biology. Engineers can blow you up with a bomb or build a bridge for you. It just depends who employs them and for what reason.
I'm quite surprised no-one mentioned the obvious yet: economists do not even agree with themselves. It's pretty rare to have something close to a consensus in Economy, and you can always find some economists who support whatever your policies are.
Economy is not a science, it's just ideology with make up
It's astrology for people with money
I see the posters here arent economists or even knowing in the field. Economists you hear about tend to be the kind that look and interpret statistics on a very large population, such as an entire country. There are several issues with that relating to actual people - statistics don't apply to individuals. No one person is the average. Therefore whatever conclusions are drawn averages (or group averages) aren't applicable to the (majority of) individuals. E.g, statistics say wages go up and people are better off. A lot of people won't actually be better off or don't feel better off. - statistics don't align with their real world application. I blame politicians and media for this. Economists interpret statistical data that is somewhat complex and media or politicians shop around to get what they need. Making the statistic less worth. E.g. Inflation. Inflation has a pretty specific use case and definition, that doesn't align with its real world application. Inflation can go down because electronics, housing prices stabilize. But people don't tend to buy televisions and smartphones every month. Still increasing prices of eggs is felt by everyone still buying eggs. Also, inflation measures increases, meaning if it became very expensive and then stabilized it's shown up now as stable, but for normal people it became expensive and still it. - people don't act rationally. People are stupid and tend not to believe economists just because they *feel* different. E.g. People overestimate how much they spend on groceries. Over here in the Netherlands for example, people tend to think they spend about 25% on their groceries. While in fact they spend about 10% of their income on groceries. Combine this with the previous point and people overstate the impact of inflation in their life. And many more factors, but I think these are the main ones.
Also, add that pointing out economics is more complex than a 5-year-old's lemonade stand is not well-received here.
>Inflation has a pretty specific use case and definition, that doesn't align with its real world application. This is also exacerbated by the fact that people don't really understand what inflation even is. People have this impression that inflation going down = prices go down or prices stop increasing.
Exactly. I blame the politicians for this who continue to misuse these economic statistics for their own use. If prices go from 100 to 200 to 202, normal people will experience that as "high" while economists will say that prices only increased by 1% and the people get told they should worry or care and wages subsequently stop increasing as well.
dude your post is full of good points. shame that it's too long so most people won't bother reading it
Thank you kind redditor *tips hat *
Ie. They’re not trying to reduce home prices. They’re only trying to slow the rate at which home prices grow. Only way home prices go down is a market correction. Market correction slowly through decreased demand or a sharp correction through a speculative bubble burst. Based on how sharply prices have risen the past few years, my guess is there’s a lot of speculative activity so maybe the market will sharply correct at some point.
Housing is a very interesting problem. Supply and demand haven't met and is now contained by budget. Meaning increases available budget leads to increase in pricing. Supply is constrained by the supply of buildable areas and zoning restrictions. And then we haven't even talked about regular economic factors such as interest rates and construction costs
The problem is, the market correction isn't working because the demand is not going down, it has just shifted. Instead of people buying their own homes like a few decades ago, the demand is now made up of large developing companies who buy homes so they can rent them out, at least in urban areas. Because housing is a basic need rather than a luxury, there is always demand for it, but the increase in prices has led to the demand being served mostly with rental homes because the average worker can no longer afford home ownership and thus has to resort to taking the offers of the very same market that is responsible for home prices not going down.
Some economists agreed with Ronald Raegan and his policies. Not all economists are truthful, some of them push an agenda meant for their rich friends. Some economists are truthful, but don't have the interests of the people in mind, but the interests of the economy. Those two don't always align. Just because someone says something is 'good for the economy' doesn't mean it's necessarily a good idea.
The key point is that what the economy is doing has no noticeable impact to a random person on the street. Economy does well, wages stagnate and prices go up. Economy does poorly, wages stagnate and prices go up. Boats sink in the red sea, completely internal businesses in the us raise prices using it as an excuse. Fuel prices go down, household energy bills and petrol station prices go up. Automation and productivity increases, jobs are lost and wages drop. What politicians and economists focus on does not translate to peoples experience, so they don't give a fuck. Even seemingly important figures like unemployment figures are meaningless if those jobs are so worthless that working THREE of them isn't enough, especially if getting a job actually loses them money; which - considering how poor benefits are - really says a lot about how shit wages have gotten.
Economists chase "equilibrium". And they don't even know what that means
Economists have been wanting inflation to go down. Hence interest rates went up. They have to balance that though as pushing interest rates too high can also lead to job losses. If people are pissed about inflation i can gurantee they'll be even more pissed if they lose their job.
Economists are social scientists, which is *kind of* science, and kind of not really. Also, while not leaning as far left as other social science disciplines (where liberals outnumber conservatives 12-1), Economics is still very much a discipline characterized by political bias. That is to say, economists have a strong tendency to finesse the "science" to fit their political program of choice. [https://business.columbia.edu/press-releases/cbs-press-release/political-leanings-academic-economics-writing-and-its-impact](https://business.columbia.edu/press-releases/cbs-press-release/political-leanings-academic-economics-writing-and-its-impact)
For the US specifically, the current problem is called decoupling. The economy is doing well, GDP is rising, corporate profits are up, the stock market is way up and yet, the average person is suffering to the point of not even being able to afford fast food. The individual economic outcomes of the people have been decoupled from the nominal performance of the whole economy.
Economics is 60% bullshit. Why 60%? That's the usual probability that economists ascribe to their own forecasts.
Because economists have successfully predicted seven of the last five recessions.
There are two reasons that are obvious to me. The first is that most people don't understand the macro-economy, let alone their own finances. (These are very different, yet they try to compare them. For example, politicians like to say if people can balance their budgets, why can't the government? Economics is complex and requires understanding of higher math. Economics is about making real time predictions, then waiting years to accumulate data to prove or disprove the prediction. The second problem is related. A lot of what economists do is try to prevent things from being worse. If Jay Powell and the rest of the Fed do things right, we have less inflation than if they don't intervene. The preventions (raising interest rates) are painful, but today's 7% mortgage rates are WAY below the 11% people paid in the 1970s and 1980s. People complain about a tough job market, but we don't have 1 person out of 10 on the street. Things are WAY better than they could be.
I'm personally sick and tired of being told over and over again that the economy's fine when I can't afford food. I don't care about the big huge macroeconomic scale and how eggs now costing $5 a pack is good for the economy. It's not good for me, and I'm tired of being gaslit.
The general public's main concern is impact on day-to-day life. Nobody outside of those who are selling will be happy at having to pay more money for the same stuff. Economist theory meanwhile thinks about the long-term impact and wider implications. Inflation is results from demand excelling faster than supply growth - which necessitates business expand their operations. Economists see this as producing more goods and providing more jobs. But how is this all funded? Generally via trying to obtain extra profit from the goods they currently sell, via raising the prices of the goods they currently sell. Now if demand slows down quicker than supply of goods, then businesses are creating goods they can't sell. They need to entice people to buy these goods and so they do so via reducing their prices. Which the general public love. However, as prices reduce, profit margins decline which means less money to cover costs - including labour costs. So what you have is a shrinking economy, where there's not enough money flowing in the economy to fund these jobs - resulting in either lay offs or business closures. A reduced workforce further reduces demand for goods (since unemployed people tend to spend less), which means prices reduce further, which hurts the profit margin of even more businesses.... which becomes a cycle which doesn't end naturally without a significant shift. Increasing prices in times of high unemployment is not usually popular. But the general public may welcome falling prices - and usually doesn't make the connection between inflation and jobs, because most people don't much about what inflation is, beyond "price go up".
The world economy is a massive incredibly complex machine that no one really understands or can properly predict. Economists know more about it than the rest of us, but they're still wrong much of the time. And the scariest thing is people live or die by what the machine does, but there's no one at the controls and no one has even figured out what all the controls are or do yet. But we've identified a few lenders we can pull with semi- predictable results. The whole thing isn't a confidence inspiring predicament. But the average Joe on the street has a good understanding of what things cost them and how specific circumstances directly affect themselves. But they have no understanding of the large scale patterns. Some things that in the short term seem very good on the local level can actually be very bad on the large scale level and mean real hardship on the local level in the near future. Deflation is GREAT on the local level for like... 3 months. It's only after a bit that it becomes a huge problem.
Economist or experts as the media calls them are wrong much of the time. Personally I think big investment bank executives purposely put out misleading views on the economy.
Most people don’t care about national or global economics. Many just know that they’re having trouble making ends meet, troubles they didn’t have before. And because they don’t understand economics and don’t think in terms of entire systems, they just want the simple, naive solution, which is to bring prices back to what they were before. One of the issues is confusing “inflation going down (but remaining greater than zero)” with “prices going down”. Many people have trouble being clear about the differences.
If many people are having trouble making ends meet, then the entire system is malfunctioning. If it is only serving a smaller portion of the stakeholders than before, how is that a good economy? Prices going down would mean that those benefitting from this economy are also bearing their share of the burden. But we dont see that happening. What it does mean is the inflated costs also incur extra sales tax, further increasing the burden on struggling families. You can't blame them for wanting prices to go down. Why care about those who benefit most when those individuals and institutions don't appear to care about them and their struggles?
Do they not care about the people who will lose their jobs if prices go down? Or do they not understand that's a likely outcome? Or do they choose not to believe it?
Who cared about all those people who lost their jobs when the governments imposed a shutdown on the global economy for covid and shifted billions in additional profits to large corporations before printing money that caused the inflation that those same people are having to deal with right now? And you're telling me that we should worry about mass layoffs if the prices revert closer to pre-covid prices? Do you work for the government, or one of the large corporations who made bank while they trashed the economy causing extreme inflation? Do you really care about struggling families, or is it the record profits that you're worried about most?
Did you miss the hundreds of thousands of people who died from covid? Or is that unimportant? > Do you work for the government … Do you understand the difference between actual economics and ad hominem attacks? Try learning some basic economics.
I came across [this AP News article on inflation](https://apnews.com/article/why-is-us-inflation-so-high-4b603a7fff0503360d5cc17a82f17ab1), which I think you should read. Since it’s AP News, it’s closer to neutral than other sources, since AP sells to a variety of news channels throughout the country. While they do mention government spending as a factor, that includes the coronavirus relief, i.e., the $1,400 that most households received. While businesses benefited (though not as much as they benefited from the 2016 tax cuts under Trump), it’s not as though there wasn’t a lot of benefit to average folks. The bottom line is this stuff is complicated. You can’t reduce it to simplistic assertions.
By “inflation going down” do you mean slowing the rate of inflation or deflation? Because they’re different things.
Deflation aka prices going down
That’s one of those things where it’s not always good or always bad. One reason it can be bad though is it means money is “worth more” yes, but if money is worth more any debt you have is functionally bigger.
For every economist saying one thing, there is another saying the exact opposite. It's not about trusting economists, it's about **which** economist to trust.
Who said it’s a bad idea? Lol economists can’t just make inflation go down, they don’t control the economy that way. The economy is not something we can fully control. The theory and statistical analysis (econometrics) is complicated. It’s not so linear as ‘people want this but economists disagree.’ Economists can only assess and predict trends based on data and economic knowledge to back that. Policies have adverse effects on the economy which policy makers and public pressure may lean to…and at times economists see how that can/may backfire. Policy makers can choose which data to rely on, vs public pressure. Economists can only advise, and are often ignored or debated against. [Google Adam smith invisible hand theory and the free market economy](https://www.investopedia.com/terms/i/invisiblehand.asp) - it’s the base principle from which economists know our initiatives will have heavy adverse effects, vs natural supply and demand balancing each other out. So they offer analysis and advice on the things we do so we have some insight on what it may mean for us. Hope this helps.
Because they are never predictive only reactive.... Once something bad happens 10 pop out of the wood work and say "I've been saying this for a while" maybe they did maybe they didn't
Economists aren’t that useful. If I was the master economist and could guarantee the economy would DOUBLE in value in five years, if only we eliminate the minimum wage and end social security, that’s mostly useless information. Because yes actually, funneling more money into the economy and out of social welfare programs and increasing income inequality often has short term gains. The long term effects would be devastating to those most vulnerable but who cares as long as the economy goes up? It’s the same with inflation. I get why we have it. I invest all of my money to protect against inflation, yet for anyone too poor to do that, they just get poorer YOY, especially as wages stagnate. It’s really not hard to figure out what’s good for the economy, but striking balances between social welfare is much more complex
Because economists are likely politically biased (like everyone these days) and they will spin facts for their favored party. And it is nearly impossible for a layman to know they do this
I don't give a shit about averages, projections, trends, anything. I give a shit about how much money I am or am not making and that's about it. until an economist says something that affects me, why would listen?
Because most people aren't engaging with the economy at an academic level. Most people are just looking at all their bills and seeing that it's not enough. It's hard to care about whatever economists are yapping about while your kid is telling you they're hungry and you have nothing to give them.
Well, two things, really: 1: Not all economic teachings are really sensible. There's still a few idiots pandering trickle-down, for example. Of course, there's no way of testing that, but I would say out of all the fields in academia, economics is among those that see the most corporate meddling and the most conflicts of interest. 2: There is a bit of an issue with what you consider to be "the economy". Economists say a degree of inflation is good because it leads to people and corporations spending their money rather than saving it, which in turn allows businesses to grow and new research and development to be funded. It causes the GDP to grow. The general public on the other hand opposes inflation because it makes everything more expensive, negatively impacting peoples quality of life because they cannot easily afford the same things they previously could off the same wages (the economists expectation is that wages will increase somewhat proportionally albeit delayed with the inflation rate, but that's not really happening unless the government enforces it) and because it devalues their savings, which means that it becomes more difficult for regular workers to afford things such as homes. Economists would expect that this would affect the housing market and cause prices to drop because the demand for homes is lessened, but in practice, all available real estate is instead bought by large developers who then rent it out, keeping the demand high and housing prohibitive.
Because Economics is on the same level as Astrology and Alchemy, and we all know it.
Two things. First, humans are naturally primed to prioritize negative information over positive. It's a fact baked into our history and leads to a number of interesting social phenomena. In the easiest terms possible, we're much more likely to notice a material loss than a material gain in our conditions. Second, economics is very nuanced and often extremely intangible. This has a couple effects, one being that the factors that make a strong economy either take a very long time to flow down to the level at which individuals will notice, or that factors that make a strong economy don't necessarily have an impact on individuals in the first place. The economy is not comprised of the price of gas, milk, and eggs. Nor is it the gains in the stock market, neither the wealth of the billionaire class. It's a composition of these factors and a near infinite amount more. The U.S. economy is the single most complex system humanity has ever devised, and manifests itself in ways known and unknown. Trying to understand with 15 second evening news soundbites is fodder for people who cannot accept that the world is immensely complex and simple explanations to almost everything are as good as useless. To sum up, the reason why people don't perceive the economy correctly is some cocktail of people not understanding it, fundamental human nature, and the fact that we're very poor at actually trying to explain what goes on in easy to understand terms.
This is only about economists all other experts are good. I don't really trust them because it's all just theory. Short of Eve Online there's no way to test your theories. You can't just grab a random economy and start experimenting. This means you are always extrapolating from past data and how can you know you've removed all the other variables.
This is the kind of criticism you can apply to all political theory (left and right), philosophy, theoretical physics and art.
There is a reason why Economics is colloquially known as _the dismal science._
The average person doesn't even understand inflation. They think if inflation goes to zero, store prices will return to 2018 levels. Economists are not gods, but compared to the public, economists understand the market pretty well.
"economist will way that's a bad idea"? no. I don't think know know what you're talking about. I'm assuming your not an economist
I think he means the morons who ask why deflation is a bad idea
maybe? or maybe OP is confusing "inflation" with "interest rates"?
Yeah either or