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Brian_Macker comments on Worse Than Random - Less Wrong

25 Post author: Eliezer_Yudkowsky 11 November 2008 07:01PM

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Comment author: Brian_Macker 18 November 2008 12:09:00AM -2 points [-]

"Sorry if I was overly brusque in my response."
No, I don't believe you are sorry. I think you have a particular view on economics that colors your questions. You're looking for some angle to justify those beliefs. It's quite clear that the Austrians are correct about what is occuring right now.

"Because for the moment a simple "classical economics + power law of random fluctuations (possibly giving way somewhat to a gaussian distribution for rare events)" seems a much more economical theory fitting the data ..."

Really? The "classical economics" was abandoned long ago by mainstream economists. Therefore I'm not sure what you mean by it. Since there is no school of economics that has any way of predicting prices that even somewhat fit I'm thinking that your just rationalizing here. Since prices, from the standpoint of ignorance, already looks gaussian it seems that almost any old theory could make this claim you are making. Doesn't really provide a means to test between one theory and the next.

Why should I be satisified with a theory that claims to predict prices, but can't, and only "fits" if one assumes that it's wrong by a gaussian corrective value? Meanwhile it has no explanatory value, and very often is not only counterintuitive but self contradictory?

That's a way to falsify a theory, self-contradiction, that many schools of economics completely ignore. The "liquidity trap" being an example of this kind of crazy thinking. Failing to have a proper theory some schools of economics are forced to accept what is obviously a ridiculous and self contradictory explanation of events. They drop fallacies like a chicken it a factory farm. Krugman for example actually believes in the brokent window fallacy in addition to the "liquidity trap" fallacy.

It's quite clear what is going to happen next with the economy. I personally predicted that the Fed was going to take the actions it is now taking back in 2003, choose inflation. Their backs are against the wall for prior stupid actions and now they have choosen to inflate. They increased the base money supply over the past two months at a rate of 341%. I laugh at the people who think they can just "mop this up later". Mop it up with what, their credibility? They are figuratively in the position of someone trying to pull themselves up by grabbing their bootstraps.