The following is a report I compiled with two friends to determine which factors had the greatest impact on a college graduate’s starting wages. Though the calculations are sound, the report has not been edited for grammatical errors or clarity. Our data was based on publications from 2010.
Continue reading “What key determinants are responsible for a graduate’s starting wages?”
A Case for Economic Equity and Long-Term Growth (Draft)
Abstract
Macroeconomic policy issues, as well as the theoretical assumptions underpinning their conclusions, must be considered within a political Liberalism framework that ensures and upholds the democratic values of freedom and equality inherent to the constitution. The complexity of economic development requires a holistic empirical approach that accounts for the historical, political, sociological, and business factors contributing to the makeup of society when crafting and recommending economic policy.
For this paper we will assume that economic growth is the aim for society. Inequality is a product of increased bargaining power resulting from increasingly powerful institutions in the business, financial, and governmental sectors (Kumhof 2011; Barnhizer 2004; Argyres 1999). Research has repeatedly confirmed growing inequality globally and domestically (Hisnanick 2011). Inequality, manifested as widening income and wealth disparity, contributes to domestic and global account imbalances, consumer debt, and economic stagflation, i.e. inflation and unemployment (Kumhof 2012; Rajan 2012). In addition, inequality is linked to key social variables such as political stability, civil unrest, democratization, education attainment, health and longevity, and crime rates (Thorbecke 2002). Greater economic equality always results in greater long run economic prosperity for the whole. (Wilkinson 2009)
The thesis explored in this paper is that bargaining power inequalities causally contribute to economic and socioeconomic inequality due to path dependency, organizational inertia, and habit formation. Bargaining power inequalities increase proportionally with capital accumulation, concentration, and centralization. This paper will show that the restoration of equal bargaining power will rectify financial and labor market imperfections and spur economic growth. In addition, this paper argues that US economic growth over the past several decades has been vastly overestimated due to increases in financialization.
Executive Summary
In order to determine the best policy for rectifying inequality and spurring economic growth, this essay provides an overview of current economic and socioeconomic conditions within the US and abroad, identifies problems within those conditions, and details the contributing historical economic policies that shaped them. It then examines the systemic causal mechanisms contributing to current US economic conditions, present potential policy solutions that seek to address these underlying causal mechanisms, and lastly interpret and rank their theoretical effectiveness. This paper addresses the following areas:
I just read the article titled Disruptions: With No Revenue, an Illusion of Value that discusses the overvaluation of tech companies.
This article is so intuitive, yet so refreshing. It’s incredible that people aren’t discussing another eminent collapse.
Let’s talk about money and value.
Money represents a denominated value; it represents purchasing power. What does it mean to be worth something? It must possess utility, and that utility must be great enough, must possess enough value, that you would be willing to trade something else you value equally for it. But what if the value of what money is representing is actually valueless? What happens when the value attached to the dollar don’t reflect the value attached to the object? What happens when the dollar is worth significantly more than the object? You simply won’t exchange your money for the object, and suddenly it’s value decreases and disappears.
What if someone told you that a company was worth a billion dollars, but you actually believed it was worth nothing? I think of Instagram, Facebook, Twitter, Groupon. How do these companies generate revenues? How much value are people willing to give up to use these services?
The problem is speculative valuation. The question of whether these tech companies will actually deliver the advertising dollars is still out. A valuation is only as good as its assumptions. Valuations based on discounted cash flows rest on some limited tentative assumptions, specifically: basing projections that the past will be like the future, variable discretionary capital expenditures, as well as the uncertainty of discount rates and growth rates. What if the market suddenly decides that companies like Instagram are no longer “cool” and stop using the product? What’s going to happen to that billion dollar valuation?
The tech industry is experiencing a speculative bubble, similar to the one witnessed preceding the real estate bust and the resulting financial crisis. What is the real value of information technology? I know it increases efficiency, it provides us with superficial pleasure as we peruse the internet, look at Facebook pictures, and the like, but what happens when we no longer derive value from these things? What happens when suddenly Instagram is no longer cool? The value will disappear along with everyone’s money.
I also believe that the education system, specifically higher education, is experiencing a boom and will eventually bust. What is the real value of going to college? You accrue massive debt that you can’t ever escape, your income is increased marginally, and there’s no guarantee you’ll get a job. What happens when people simply decide that the price tag isn’t worth it, they don’t want the loans, they don’t think college is worth it? The value disappears.
What other industries are suddenly thriving? Health care? Is health care an over valued industry?
As this article mentions, and I believe and have said for a long time, that our economy’s worth is built on distorted valuations. The financial industry is over 21% of our economy. That’s right: twenty-one percent. What value are they actually producing? Financialization leads to decreased real asset investment, so I argue they produce no value. Instead, financialization increases speculation, risky investment, decreases private savings, and increases debt, among other things.
Our economy is a house of cards. Where is the real value? What things possess real utility? When shit hits the fan and people have no more money, no more surplus income, no more savings: what will they be spending their money on? What good or services will people include to satisfy their necessary consumption for sustenance? Will people prefer to spend their money on services or goods? I suspect real-asset goods. Is technology a good or service? It is intellectual capital, but does it possess any tangible value? No. If people are broke, you think they’ll spend money to use Instagram? I bet not. And what if Instagram decided to use advertising? And what if those people are so broke that they don’t buy what they advertiser is offering? Why would a company advertise with Instagram, or Twitter, or Facebook, or similar companies?
Service industries are the result of past increases in productivity that lead to equal distributions of rising income which created a larger middle class; this middle class created a demand for services that were previously only available to the upper class; but as income distribution widens and wealth accumulates at the top while everyone else gets poorer, people will not be able to afford services. They won’t spend money on luxury goods. They won’t go out for dinner as much anymore.
But this will only occur when people can no longer borrow on credit. At present, debt is solely responsible for our sustained domestic demand and aggregate output over the years. Financial liberalization (cheaper borrowing through regulation) has allowed consumption to remain relatively stable as real wages stagnanted and inflation rose.
Only when lenders can no longer extend credit will our country experience massive stagflation (high inflation, high unemployment), eventually leading to a massive economic collapse. We may be witnessing the beginning of such a stagflationary period.
How can someone prepare for a bubble collapse? Where should they invest their money? Commodities? How can someone bet against the market? Which goods will be in higher demand as incomes continue to drop and inequality worsens?
I’ll be posting a massive paper on inequality within the next few days and I’ll elaborate in depth on how inefficiencies within various channels lead to economic inequalities that reduce socioeconomic equity and decrease economic growth.
If you are having a conversation with someone and you find yourself struck with boredom, chances are it is not a failure on your part, not a result of your mere laziness. I would bet that the failure rests with the person your speaking to, your interlocutor. I’m under the opinion that there no boring ideas. Just boring people.
After all, we’re sensual creatures. We thrive on stimulation. Nearly all of communication is nonverbal (Knapp). Sight and sound comprise 94% of our sensory inputs, 84% and 11% respectively. The American educator Marva Collins said that “The essence of teaching is to make learning contagious, to have one idea spark another.” I couldn’t agree more. I believe that at the heart of this contagion is a resonating passion, an enthusiasm that generates a visceral reaction, a mutually shared connection with another person.
Regarding education, why do we find that the responsibility for learning and adequate understanding rests with the student? Assuming that students have a vested interest in gaining knowledge of the material, why would we dismiss them as merely lazy or unmotivated when they find it unbearably difficult to fight through boredom and apprehend a classroom lecture?
When a student enters a classroom prepared to learn new material, they begin without a context. Even when reading the text is a prerequisite to coming to class, there is still an absence of ultimate relevant context: why should a student be expected to understand the relevancy and relationships within the context being presented? They shouldn’t. But this is the prevailing attitude maintained by formal education.
The result of an attitude insisting that the better part of learning rests in the hands of the student rather than with the teacher is a system of education where disengaged teachers instruct and lecture to students who are discouraged to engage in critical, mutually beneficial dialog, but sit as semi-passive observers to be inculcated with remote, vague ideas devoid of a context that is immediately relevant to the schema they bring with them to the classroom.
What kind of thinking does this promote? I would bet that the direct manifest of this classroom emphasis produces analytic, auditory-sequential thinking. This type of thinking is rote, routine, automatic, and poor in relevant context necessary for robust comprehension. Outside of what meaning is directly issued by the dictated insistence of the educator, there is no meaning. As a result students know all the words to all the questions, but they fail to ever develop a comprehensive semantic web that poises all the questions, and therefore lack the capacity to critically inquire, to ask original questions, for themselves. The contrary of analytic, auditory-sequential thinking is nonsequential, visuo-spatial thinking characteristic of geometric visions of reality.
I recommend reading Two Ways of Knowing for a preliminary elaboration on the virtues of auditory-sequential learning (left brain hemisphere) versus visuo-spatial learning (right brain hemisphere). To briefly note, highly gifted individuals utilized visuo-spatial thinking, exhibiting greater brain activity in the right brain hemisphere. But allow me to continue this line of thought a little further down. (Also another interesting article on Temporary and Spatial Processing)
Wonder. This word encompasses the attitude of children— model geniuses in their own right. They are absorbed with curiosity, captured with wonder, and intensely interested in the prismatic, multifaceted world around them. Children learn at exponential rates, partly due to their physiological development, but even more importantly, due their excitement for discovering novel experiences and the process of knitting new understandings regarding how these experiences work.
But what happens to that childlike wonder? Where does it go in age? In the past psychologists speculated that the brain is programmed for critical periods of development that allows for exceedingly fast neural growth in childhood that eventually tapers off with age. They posited that brain plasticity and cognitive fluidity wanes as knowledge becomes more crystallized with age. Due to recent research dispelling notions that brain plasticity declines and ceases with the onset of adulthood, and due to my own experience with learning, I do not embrace this paradigm.
Instead I would like to introduce a paradigm that explains how sparkling wonder for the world fades as individuals become more enculturated, as their questions about the world are met with more of the same answers, the same flat predictable responses. The corollary? They grow more desensitized, their brain is starved of stimulation, and their minds slowly harden and calcify into a crystallized understanding of the same old phenomenon they find themselves routinely bombarded with.
In effect, the loss of childlike wonder, the lack of curiosity for the world and all its treasured enthusiasms for understanding, is a result of mental oppression. Sounds harsh, right? While this may sound like an overt plot by big brother, I assure you it is not. Rather it is the natural progression of culture.
Allow me to digress momentarily and introduce my thoughts on the sociological philosophies of Bourdieu and Althusser.
Bourdieu discusses the phenomenal progression of enculturation that begins before we are born, beginning with a room and crib and name and clothes assigned to us by our parents. As we emerge from the womb and into this world with an open mind, tabula rasa, we adopt the world that has been carved out for us. Aside from the aforementioned articles, our parents may even have an idea of what kind of person we’ll be, what personality and character they believe we should possess, what religion we’ll practice, and maybe even what job they envision us to have one day, perhaps as a doctor, or lawyer, or entrepreneur. As we grow older, we learn the various cultural conventions that should govern our behavior appropriately within the context of our given family practices, within school, within church, or within the public domain, such as how to think, how to speak, how to act. We are corrected whenever we venture outside the realms of customary convention, such as when we use foul language in certain public settings, and are reprimanded and corrected, otherwise censured.
This external censure slowly becomes adopted and internalized by individuals until they no longer need external ques for regulating inappropriate and appropriate behavior. In a sense, we learn to censure ourselves. We learn the act (or art) of self- censorship. The proper behaviors we adopt are cultural capital endemic to the social or cultural context in which we find ourselves most exposed to and influenced by.
Bourdieu describes this as the habitus, or the set of socially learned dispositions, skills and ways of acting that operate unconsciously without our awareness. When we do become aware of this habitus, it is often when we find ourselves in a foreign or unknown context that allows us to recognize the incongruencies in behavior, say when a well groomed wealthy elite finds herself at a barbecue in the deep south.
I apologize for the digression but the point I’m making is all important, so allow me to state it plainly: the education system of today fosters a habitus that discourages self-guided open-ended critical inquiry in favor of directed, closed, routine memorization. I am speaking in absolute abstracts, of course, but if you take time to draw parallels to your experiences with formal education I am sure your true conclusions will be the same as mine. The reason why this is the case falls with the aim of education: to produce a work force proficient at undertaking assigned orders, finding answers to given questions, and completing a set of tasks dolled out by superiors. If you look at the hierarchical structure of the classroom as a training ground for the hierarchical structure of the workplace, this doesn’t seem like such a preposterous explanation of education’s existing state.
The individuals proposing and influencing education policies, the wealthy elite, can only think in terms of their own self-guided interests. What benefit would it serve them to have a free thinking, critically minded, independently motivated work force? While I would argue that it would do our nation a great service in terms of creation, innovation, and invention, from an executive’s perspective I can’t see how that’s the most desirable employee. On the contrary, they want workers who work quietly and do the exact job they are given. More precisely: to passively accept what they are told and perform accordingly to expectations.
But in my opinion that’s an outdated paradigm organizational and labor systems. Societies are organisms, like cells or animals, where every part of the whole is as important and valuable as the next for operating at maximum efficiency and effectiveness. To deny the capacity to openly challenge and critically think about work processes is a form of self-sabotage. Fortunately there are organizations such as Google and 3M that employ the practice of critical and creative thought in their workplace.
But again, I digress. And allow me to clarify a point: I am not diminishing the role of intelligence in formal education and the work place either. In fact, it is the only facet or trait of an individual of any worth in contemporary education. What is intelligence? Does it differ from problem solving? Let’s explore these questions.
In the mainstream sense, intelligence is the ability to arrive at correct answers. Sounds good enough. In Greek, intelligence translates as intelligere which means to “select among” from inter meaning “among” and legere meaning “to gather”. More precisely, intelligence is a convergent style of reasoning that utilized deduction to arrive at conclusions. It is analytic and sequential. Does it differ from problem solving? Not if the problem is defined among a given set of premises or facts.
But what if a problem exists as open, without any apparent premises or facts with which to reason from? What if the questions are not given? This is where the utility of intelligence breaks down and an indication that some other important element necessary for problem solving begins gaining apparency.
Allow me to cite Leonardo de Vinci’s response when asked of the secret of his creative genius: saper vedere. In Latin this translates as “to know how to see.” From this brief phrase we can draw some tentative conclusions about what he might have meant, namely that creative genius, or rather problem solving, is the ability to formulate a novel perspective, an original point of view, that rearranges and reprioritizes the saliency and valuations of phenomenon, of facts, within the context of a given problem. This is where visuo-spatial thinking is paramount.
It would seem that the ability to gain the proper perspective necessary for solving open-ended problems rests with the ability to think divergently through a visuo-spatial context of thought. That is, to diversify and differentiate different modes of thought, perhaps through analogy or metaphor, in order to gain an alternative and, ideally, an original point of view.
So I must ask: What type of thinking does our contemporary formal education system encourage? One that deviates from the “norm”? One that tests various processes of reasoning through problems? One that explores alternative solutions to a given problem? Or how about the most striking question of all: Does contemporary education encourage independent thought or novel perspective in the classroom?
If I were to generalize all my experiences in education, and even defer to the data regarding increases in standardized testing, my answer to all these questions would be a resounding no. Is more standardization, more conformity and uniform perspective the answer? No and no again.
What we need are better teachers who are more adequately equipped to facilitate open discussion and lead critical thinking. In addition, we could do away with rigid, inflexible curriculum’s and standardized tests, as well as the stifling behavioral expectations of structured class settings. We also need to toss out this notion that intelligence— the ability to utilize deductive reasoning to converge at correct answers from a set of given premises— is not the only measure of value, and that other critical thinking skills— such as those that produce an ability to transcend bias, create new perspective, and generate novel questions and original solutions— are being totally overlooked and underutilized.
To pay off our $15.5 trillion national debt the government will continue monetary expansion and quantitative easing, i.e. printing money. Inflation will rise. Prices Increase. Income/ real wages will stagnate and unemployment will increase as businesses look for ways to cut costs. Since businesses possess bargaining power, wage labor markets will suffer. The cost of living will be so great that people will be forced to reign in consumption and cut spending. If you have debt (financed by wealthy private domestic lenders), you will have difficulty paying it off because cost of living has left you with less money to live on. If you can’t pay it off and file for bankruptcy, they will not only repossess your assets, you’ll still be in debt, thanks to recent revisions in Chapter 7 and 13 Bankruptcy laws. What’s left of the middle class will continue getting squeezed until the income disparity is so large that poverty will be the norm. Meanwhile the wealthy will get richer as they continue cashing in on your debt.
A word of advice: get out of debt, fast.
Now, I have to ask myself: if income drops and consumption decreases, and if credit and loans are more difficult to obtain, what will sustain the domestic demand that drives economic growth? Simplified: if 90% of the country has no money, how will they buy things, and how will businesses make money?
Data indicates that our GDP has continued increasing and is back to pre-recession rates.
What if I said GDP is a worthless measure of the economy? What about exponential growth in inequality? What if I said real wages were a better determinant of economic prosperity and success?
I’ve been thinking a lot about what’s going on in the US economy. Every time I hear someone talking about how to fix it, I feel that they have it horribly wrong. They just aren’t looking at the facts. They aren’t asking themselves where these facts point. This includes my robotic peers and my calcified professors. Everyone one wants to speculate with their platonic definitions and abstract calculations and no one wants to look at the facts, the actors, to data, the trends, and it’s really disconcerting.
That being said, I’ve just read several journal articles on this topic and one struck me most poignantly, titled Income Inequality and Current Account Imbalances by Kumhof Et Al of the IMF. Not only did their hunches and conclusions resonate with me beautifully, they happened to address the exact questions I’ve been wrestling with in my own journals and writing. It was a relief.
In sum, I believe the that the major source of our problems revolves around global account imbalances. More specifically, the global account imbalances and the low world real interest rates were the primary source that fueled financial instability leading up to the 2007 financial crisis. I believe that the perception of foreign investors that the US was a haven for ‘safe-asset’ investments, compounded by low interest rates post 2001, fueled financial recklessness leading to the financial crisis and our current recession. Before I explain…
Let’s establish the facts– basic facts– and ask ourselves some more questions regarding how these facts came to be (we can get into details later):
These are some basic facts regarding the current state of things. Let’s cite some facts relating to economics, finance, human behavior, and the like:
Consider the following: High domestic account deficits indicate high income inequality.
Why?
The authors of Income Inequality and Current Account Imbalances look at how income inequality is exacerbated by domestic lending of the rich. As rising aggregate output/GDP is coupled with rising income inequality and stagnating wages, poor/ middle class consumption is less than their drop in income due to domestic lending of the rich. (Prices go up, they get more credit/ debt, buy more, fuels domestic demand, aggregate output increases, current account deficit widens).
The typical short-term political fix is to target policies that allow for cheaper borrowing/ financial liberation (Hence the fed is keeping rates at 0% to increase borrowing). But long-term financial liberation only leads to higher domestic debt levels, higher debt services, and lower worker consumption: it generates increases in workers’ consumption, yet slows down capital accumulation as investors prefer financial over real assets (less value-added investing, more speculative investing, i.e. financial securities, real estate, etc, eventually leads to economic stagflation…. current situation?).
The article continues by discussing historical economic trends and the global repercussions if new policies are not sought to address these systemic issues. They project that the issue of domestic indebtedness will spread globally as the income inequality gap widens and financial liberation continues.
I’ve been thinking a lot about what’s going on in the US economy. Every time I hear someone talking about how to fix it, I feel that they have it horribly wrong. They just aren’t looking at the facts. They aren’t asking themselves where these facts point. This includes my robotic peers and my calcified professors. Everyone one wants to speculate with their platonic definitions and abstract calculations and no one wants to look at the facts, the actors, the data, the trends, and it’s really disconcerting.
That being said, I’ve just read several journal articles on this topic and one struck me most poignantly, titled Income Inequality and Current Account Imbalances by Kumhof Et Al of the IMF. Not only did their hunches and conclusions resonate with me beautifully, they happened to address the exact questions I’ve been wrestling with in my own journals and writing. It was a relief.
In sum, I believe the that the major source of our problems revolves around global account imbalances. More specifically, the global account imbalances and the low world real interest rates were the primary source that fueled financial instability leading up to the 2007 financial crisis. I believe that the perception of foreign investors that the US was a haven for ‘safe-asset’ investments, compounded by low interest rates post 2001, fueled financial recklessness leading to the financial crisis and our current recession. Before I explain…
Let’s establish the facts– basic facts– and ask ourselves some more questions regarding how these facts came to be (we can get into details later):
These are some basic facts regarding the current state of things. Let’s cite some facts relating to economics, finance, human behavior, and the like:
Consider the following: High domestic account deficits indicate high income inequality.
Why?
The authors of Income Inequality and Current Account Imbalances look at how income inequality is exacerbated by domestic lending of the rich. As rising aggregate output/GDP is coupled with rising income inequality and stagnating wages, poor/ middle class consumption is less than their drop in income due to domestic lending of the rich. (Prices go up, they get more credit/ debt, buy more, fuels domestic demand, aggregate output increases, current account deficit widens).
The typical short-term political fix is to target policies that allow for cheaper borrowing/ financial liberation (Hence the fed is keeping rates at 0% to increase borrowing). But long-term financial liberation only leads to higher domestic debt levels, higher debt services, and lower worker consumption: it generates increases in workers’ consumption, yet slows down capital accumulation as investors prefer financial over real assets (less value-added investing, more speculative investing, i.e. financial securities, real estate, etc, eventually leads to economic stagflation…. current situation?).
The article continues by discussing historical economic trends and the global repercussions if new policies are not sought to address these systemic issues. They project that the issue of domestic indebtedness will spread globally as the income inequality gap widens and financial liberation continues.
The primary aim of compulsory education is to ensure the proficient attainment of knowledge in a variety of predetermined areas. The benchmark standards for proficient knowledge and the areas of expected proficiency are established by the state and federal governments. Measuring student performance in this a way not only to assess a student’s knowledge proficiency, it provides educators and policy makers with a method for determining the efficacy of school policy and teaching strategies. Because there are many factors and contextual issues that influence a student’s performance, a challenge for educators and school administrators today is finding ways that accurately measure knowledge proficiency in an effort to develop policies to improve student performance.
The current method for measuring student performance is through standardized tests that cover a handful of core subjects that are deemed as accurate indicators of a students knowledge. Standardized testing was introduced as a means of providing a statistical distribution of student performance. This method allows scores to be quantified against the relative aggregate population of test takers in the areas of critical reading, math, and science. These tests can only measure a limited number of outcomes, the scores of which are simply ordinal numbers that measure the relative position of any given student – the innumerable number of factors at play cannot all be taken into account by a series of general tests. While it is useful for determining abstract averages of student performance based on ordinal analysis, it fails to determine the factors which contribute to improving achievement. As a result, its ability to determine the performance of specific schools and their districts and provides little insight into the specific factors responsible for the successful policies.
Research confirms that increased emphasis and spending on standardized testing does not produce measurable increases in student performance. As evidenced in the graph below, increased emphasis on standardized testing through the costly implementation of broad national education policies such as the No Child Left Behind Act (NCLB) produce virtually no performance increases in the presumed indicators of achievement. Despite exponential spending on such policies that promote more required standardized testing, there is no indication that these policies effectively increase student performance.
Instead, research has shown that standardized tests work to the detriment of student learning as teachers are incentivize to focus on test preparation. Rather than encouraging conceptual comprehension of the material, students are instead forced to memorize irrelevant facts and improve test taking efficiency. Furthermore, this reorientation of focus shifts classroom goals that cater to improving average scores which increases teacher attention on the average students and leaves struggling and gifted students at the far ends of the spectrum without adequate attention or support. In addition, test scores have direct repercussions on a students future, faculty tenure, and school federal grant money. The consequences of such a premium on high test scores increase the likelihood of competitive behavior between students. This detracts from the overall quality of their education and encourages unethical behaviors from students and teacher and administration. In recent decades there has been a growing problem with the proliferation of student cheating and news of countless scandals involving teachers and schools manipulating test scores for personal gain.
Recalling that standardized testing is an ordinal measurement, there is only so much value that can be derived from the interpretation of aggregate scores as an interpretation of knowledge proficiency. The varying content and difficult of any given test can only provide a crude indicator of performance that is relative to other test takers and dependent on innumerable variables which cannot be captured in a single test.
In light of this evidence there is good reason to initiate a shift away from standardized testing towards better indicators of student achievement. Research indicates that societal factors, emotional factors, the learning environment, and methods of teaching are better predictors of educational success. Additionally, there is strong evidence suggesting that high quality schools are represented by high quality faculty and administration.
The various stakeholders within education reflects the complexity of the issue. Standardized testing reinforces extrinsic motivations within society that diminish self-efficacy and reinforce values that emphasize instant gratification without long term investment. The consequences of this testing reverberate through the students and extend throughout society, affecting every facet of our culture. Solving the issue will require addressing factors relating to the classroom environment by supplying highly qualified and incentivized teachers who engage in meaningful relationships with their students, praise individual experience and inquiry over abstracted ideals, and encourage work ethic over results.
I’ve rambled and wrote before on this topic, but I need to say it again: Modern economic theory is baseless bullshit.
As a philosophy major I like to pride myself on being able to look beyond the obvious, beyond what’s presented prima facie, identify shortcomings of any claims, and ask the tough, pertinent questions. That being said, I’ve spent a lot of time as an undergraduate studying economics and finance and researching the shortcomings of the various economic assumptions built into the economic theory, their models and methods, and the policy decisions stemming from them, and I find that the vast majority of it is unfounded speculative assumptions.
Fundamentally, modern economic theory is not scientific. It is pseudoscience. While not the first person to call bullshit on the neo-classical economic theorists, Imre Lakatos did a fine job making explicit the shortcomings of their neo-classical claims in the seventies along with his colleague Spiro Latsis in their paper Situational Determinism. This shed light on the flimsy assumptions grounding their theories and encouraged other economists, as well as academics from other fields such as psychology, to revise many of their assumptions in favor of a more holistic, organic, and biological representation of economics, resembling a more accurate ecology of evolving human interaction. These minds produced what we now know as behavioral economics, institutional economics, environmental economics, and the most promising and nascent of all, evolutionary economics.
I’m researching a thesis topic for a macroeconomic policy seminar class so I can write a twenty-five page paper that examines and suggests macroeconomic policy. I decided that I’m going to get radical about this paper. I’m tired of holding my tongue when we sit around semicircle in class dithering on about these abstract relationships concerning abstract entities while we posit our way out of real or hypothetical economic problems with totally ad-hoc assumptions revolving around contemporary fiscal and monetary policy. It’s all bullshit.
Economists are bullshit. They are modern day bishops that instruct the quivering masses how the will of god should allot the gold reserves pinched from the pockets of these people, but in this case we have economists who, divinely ordained via their institutional accolades, instruct the blind herd according to the will of Adam Smith’s invisible hand. Which, like god, doesn’t exist.
So I’m trying to figure out a paper topic while using some tact. I’m not trying to offend and piss off my professor who, may I add, is one of the most highly respected professors at Vanderbilt, and one time economics adviser to Reagan.
So…my paper topic. There are a ton of areas I want to address. Most importantly I want to ensure that my research retains a Political liberalism framework like the one inherent to our democratic constitution. I’m not sure this is possible, however, without introducing statism. Whatever the case, I don’t think economics and political ideology can even be dealt with separately, so I’ll at least try. Some of my ideas involve discussing to formation and nature of:
Anyway. I have other things to do, quizzes to take, reading to finish. More thoughts later.
Introduction
Cardiovascular disease, type II diabetes, and other obesity related health complications are among the top killers of American adults today. As these illnesses have grown increasingly more prevalent over the years they have taken the lead as the greatest contributors to rising health care costs. The aim of this paper is to identify how these diseases develop and address ways for preventing the onset of chronic illness in order to improve health and longevity as a means of potentially curbing the rising cost of U.S. health care. Citing strong evidence, I posit that the single-most significant factor for improving national health is the proper maternal nutrition during the critical intrauterine, neonatal, and postnatal periods of child development. Additionally, I hypothesize that while maternal education programs may result in positive changes to a mother’s diet during her pregnancy period, it is the cost, availability and ease of access to quality nutritional foods which are tied to a country’s cultural lifestyles, and individuals’ socioeconomic class that primarily influences the success of this education policy.
William Dare 