ACA Repeal/Replace: Progressives Face Moral Dilemma

[David Horn]

(09-09-2017, 09:53 AM)Kinser79 Wrote: And you fundamentally misunderstand that taxation is at its most basic level theft.  But that isn't here nor there.  The fact remains that if you want to increase economic activity you have to decrease taxes, if you really want to accelerate economic activity you decrease taxes on those who produce wealth, which largely speaking means corporations.

Your 'fact' is actually counterfactual.  If it was true, Kansas would be soaring and California would be heading for bankruptcy ... the exact opposite of reality.

Kinser Wrote:Short of that the only real way to accelerate economic growth by government spending is to waste huge sums on a war.  I think we've been trying to blow that bubble back up for some time now--it isn't working out to well.

The space program and the Interstate Highway system build-out had nothing to do with the military In peace or war, but they created enormous knock-on benefits.

Kinser Wrote:The GMs and Googles and the GEs don't really pay all that much in corporate taxes because they have and can afford to have armies of lawyers and accountants to reduce their tax burdens through the byzantine mess the tax code is.  So who gets slammed with the high corporate rate?  Smaller companies which actually employs most people.

Corporations escape taxes because we have systematically gutted any control of their influence on the political process.  It started with Carter, and his first stab at deregulation, but Reagan raised it to an art form.  Add 40 years, and viola!  No one tried to reverse it, and it now considered the default position in both parties, though the left wing of the Dems is starting to make real noise about it ... finally.

Kinser Wrote:Until you can demonstrate to me that you have a modicum of economic understanding of an average High School Student then perhaps we could have a reasonable conversation about the tax rate.  Unfortunately I highly doubt you have the intellect for such an understanding.  You can get back to me about corporate taxes when you've run a business.

Your view is frozen in the early 19th century with Says Law and some of the tax theory of that time.  So far, you have not countered any of my arguments, just blustered along.  Unless you have something real, I think we're done.

[Eric the Green]

(09-09-2017, 09:02 PM)Warren Dew Wrote:

(09-09-2017, 03:13 PM)Eric the Green Wrote:

(09-09-2017, 01:46 PM)Warren Dew Wrote:

(09-08-2017, 09:19 AM)David Horn Wrote:

(09-06-2017, 07:11 PM)Warren Dew Wrote: The error in your logic is that, like many on the left, you incorrectly assume that supply and demand are scalars rather than functions.

Frankly, I'm baffled by this comment.  If there is an implication to this, please be a bit less opaque.

If you want to understand it better, I'd suggest brushing up on your algebra and calculus, or learning them if you haven't.  While in theory I could try to teach them to you on this forum, there are far more efficient ways for you to learn them, and frankly my algebra teaching attention is fully taken up by my daughter.

Or maybe, just speak English..... the "many of the left" do not think in terms of scalars and functions, although you say they have opinions and assumptions about supply and demand. We don't need to re-study algebra just in order to understand your post.

If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

Speaking in terms of "Georgist land taxes" is not speaking English either. Throwing terms around without defining them is just one-upmanship, hoping to win an argument by default because no-one can understand you. Define your terms, or don't use them.

[David Horn]

(09-09-2017, 01:46 PM)Warren Dew Wrote:

(09-08-2017, 09:19 AM)David Horn Wrote:

(09-06-2017, 07:11 PM)Warren Dew Wrote: The error in your logic is that, like many on the left, you incorrectly assume that supply and demand are scalars rather than functions.

Frankly, I'm baffled by this comment.  If there is an implication to this, please be a bit less opaque.

If you want to understand it better, I'd suggest brushing up on your algebra and calculus, or learning them if you haven't.  While in theory I could try to teach them to you on this forum, there are far more efficient ways for you to learn them, and frankly my algebra teaching attention is fully taken up by my daughter.

If you're arguing that supply and demand follows a discontinuous curve, then I'm anxious to see how you justify that,  If, on the other hand, we're discussing continuous functions that may be higher than first order, OK.  So what?  Let's agree:

• There is a curve of some shape that defines the pricing power of every good or service
  
• Pricing  power transitions from supply, when goods/services are in short supply, to demand when the opposite occurs
  
• That a modern economy is rarely is short supply of anything.  
  

This should be as universal a belief as the color of the sky on a sunny day.

[Warren Dew]

(09-10-2017, 07:14 AM)Bob Butler 54 Wrote:

(09-09-2017, 09:02 PM)Warren Dew Wrote: If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

Truth there.  However an opposing Truth can be found in an old saw.  Garbage in, garbage out.

The math starts with values based assumptions.

Interesting that you consider the assumption that land area is largely constant, which is the assumption behind Georgist taxation, to be a "values based assumption".  But then, I guess like much of the left, if the facts are against you, you dismiss them as "values based" and make up your own "facts".

[David Horn]

(09-09-2017, 09:02 PM)Warren Dew Wrote: If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

This is an incredible statement.  Yes, economic models need some level of math to create and use them, but the most complex models tend to fail more often that their more simplistic cousins, because they assume a level of precision impossible to obtain in a social science.  Humans act rationally and irrationally, but most importantly, without an easily quantifiable pattern.  Chaos Theory is a much better tool to deal with economics: precision decays as the predicted future becomes more distant from the present.

And fwiw, the most successful modeling exercises in the post 2008 period have been old IS-LM models used by the classical Keynesians.  They focus on trends rather than specific conclusions.  Along with most of the freshwater economic schools, neo-Keynesians tried the higher precision route too.  It lead them astray.  Behavioral economics finally broke the rational-actor bubble, that held firmly to the idea that people act rationally in economic matters.  They don't, so markets don't either.

[David Horn]

(09-10-2017, 07:14 AM)Bob Butler 54 Wrote:

(09-09-2017, 09:02 PM)Warren Dew Wrote: If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

Truth there.  However an opposing Truth can be found in an old saw.  Garbage in, garbage out.

The math starts with values based assumptions.  Thus, even the pros get opposing values based results.  As long as everybody keeps making contradictory values based partisan assumptions, you are going to get contradictory values based partisan results.  Math can perhaps convince one of what one is already convinced of, but at an amateur level that’s about it.  What are you going to do, count Nobel prizes?

I try to look at the real world end results more than the math.  So long as the division of wealth favors the alligators, and likely beyond, I’ll be with the little guy.  The system is currently rigged for those who can afford to buy the best lawyers, lobbyists, media and politicians.  It is unfortunate that some are unable to see this.  As long as Main Street is humming along, Wall Street and Easy Street can take their cut and do fine.  If you forget about Main Street and optimize on how big a cut you can take, things go bad.

Sorry, but the assumption that precision is possible is flatly been disproven by the behavioral economists.  We aren't rational actors, so models will always be prone to increasing error with time.

[Bob Butler 54]

(09-10-2017, 11:20 AM)David Horn Wrote: Sorry, but the assumption that precision is possible is flatly been disproven by the behavioral economists.  We aren't rational actors, so models will always be prone to increasing error with time.

Hey, but you can't neglect how with mathematics people who think they are rational can make larger errors.

[Warren Dew]

(09-10-2017, 11:17 AM)David Horn Wrote:

(09-09-2017, 09:02 PM)Warren Dew Wrote: If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

This is an incredible statement.  Yes, economic models need some level of math to create and use them, but the most complex models tend to fail more often that their more simplistic cousins, because they assume a level of precision impossible to obtain in a social science.  Humans act rationally and irrationally, but most importantly, without an easily quantifiable pattern.  Chaos Theory is a much better tool to deal with economics: precision decays as the predicted future becomes more distant from the present.

Your post again fails to understand mathematics - and modeling.  In fact, using more advanced mathematics normally results in a simpler model, rather than a more complex one.  For example, Kepler used some ideas from calculus to come up with a model of orbital mechanics which was much simpler than the previous Ptolemaic and Copernican models that relied on scores or hundreds of epicycles, and when Kepler's model was rederived using Newton's fully calculus based theory of gravitation, it became simpler still.

Quote:And fwiw, the most successful modeling exercises in the post 2008 period have been old IS-LM models used by the classical Keynesians.  They focus on trends rather than specific conclusions.  Along with most of the freshwater economic schools, neo-Keynesians tried the higher precision route too.  It lead them astray.  Behavioral economics finally broke the rational-actor bubble, that held firmly to the idea that people act rationally in economic matters.  They don't, so markets don't either.

Actually, it was only by retrofitting parameters for the IS-LM model after the fact that it could be made to look even qualitatively accurate.  And that didn't explain why the parameters varied so much over the last three quarters of a century.  Of course, any model could be made to look accurate with the right parameters.

Incidentally, the IS-LM model also requires rationality of the actors.  But then, people have not been shown to act irrationally on average, only as individuals, which is irrelevant for the purposes of the models.

[Warren Dew]

(09-10-2017, 10:51 AM)Eric the Green Wrote:

(09-09-2017, 09:02 PM)Warren Dew Wrote:

(09-09-2017, 03:13 PM)Eric the Green Wrote:

(09-09-2017, 01:46 PM)Warren Dew Wrote:

(09-08-2017, 09:19 AM)David Horn Wrote: Frankly, I'm baffled by this comment.  If there is an implication to this, please be a bit less opaque.

If you want to understand it better, I'd suggest brushing up on your algebra and calculus, or learning them if you haven't.  While in theory I could try to teach them to you on this forum, there are far more efficient ways for you to learn them, and frankly my algebra teaching attention is fully taken up by my daughter.

Or maybe, just speak English..... the "many of the left" do not think in terms of scalars and functions, although you say they have opinions and assumptions about supply and demand. We don't need to re-study algebra just in order to understand your post.

If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

Speaking in terms of "Georgist land taxes" is not speaking English either. Throwing terms around without defining them is just one-upmanship, hoping to win an argument by default because no-one can understand you. Define your terms, or don't use them.

pbrower2a seemed to understand it.  But hey, if you need help:

http://lmgtfy.com/?s=d&q=georgist+land+tax

[Eric the Green]

"Georgism" (based on the views of Henry George some 100-plus years ago) doesn't seem like much worth discussing. It seems based on conditions from that time when land ownership was a principle basis of wealth. That is no longer true; wealth is generated by innovation and technology, and by capital and financial ownership.

People own land and property and have income. Land that no-one owns should be owned by everyone, and land for parks, national purposes, or ecologically-valuable land should be bought up by the state, by NGOs, or acquired through eminent domain. Income and corporate tax is certainly legal and appropriate; libertarians disagree, but so what? Property tax includes the value of land and all improvements on it. I pay it and have no problem with it, although we in CA had Proposition 13 which has protected land and real estate property owned for a long time (especially before 1978) from high taxes. If I remember correctly some states copied California back in those days of the "tax revolt."

[Eric the Green]

(09-10-2017, 11:20 AM)David Horn Wrote:

(09-10-2017, 07:14 AM)Bob Butler 54 Wrote:

(09-09-2017, 09:02 PM)Warren Dew Wrote: If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

Truth there.  However an opposing Truth can be found in an old saw.  Garbage in, garbage out.

The math starts with values based assumptions.  Thus, even the pros get opposing values based results.  As long as everybody keeps making contradictory values based partisan assumptions, you are going to get contradictory values based partisan results.  Math can perhaps convince one of what one is already convinced of, but at an amateur level that’s about it.  What are you going to do, count Nobel prizes?

I try to look at the real world end results more than the math.  So long as the division of wealth favors the alligators, and likely beyond, I’ll be with the little guy.  The system is currently rigged for those who can afford to buy the best lawyers, lobbyists, media and politicians.  It is unfortunate that some are unable to see this.  As long as Main Street is humming along, Wall Street and Easy Street can take their cut and do fine.  If you forget about Main Street and optimize on how big a cut you can take, things go bad.

Sorry, but the assumption that precision is possible is flatly been disproven by the behavioral economists.  We aren't rational actors, so models will always be prone to increasing error with time.

I agree. Mathematics is fine for what it can be used for, but using it for economics is frought with limitations.

[Bob Butler 54]

(09-11-2017, 05:59 AM)Eric the Green Wrote:

(09-10-2017, 11:20 AM)David Horn Wrote:

(09-10-2017, 07:14 AM)Bob Butler 54 Wrote:

(09-09-2017, 09:02 PM)Warren Dew Wrote: If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

Truth there.  However an opposing Truth can be found in an old saw.  Garbage in, garbage out.

The math starts with values based assumptions.  Thus, even the pros get opposing values based results.  As long as everybody keeps making contradictory values based partisan assumptions, you are going to get contradictory values based partisan results.  Math can perhaps convince one of what one is already convinced of, but at an amateur level that’s about it.  What are you going to do, count Nobel prizes?

I try to look at the real world end results more than the math.  So long as the division of wealth favors the alligators, and likely beyond, I’ll be with the little guy.  The system is currently rigged for those who can afford to buy the best lawyers, lobbyists, media and politicians.  It is unfortunate that some are unable to see this.  As long as Main Street is humming along, Wall Street and Easy Street can take their cut and do fine.  If you forget about Main Street and optimize on how big a cut you can take, things go bad.

Sorry, but the assumption that precision is possible is flatly been disproven by the behavioral economists.  We aren't rational actors, so models will always be prone to increasing error with time.

I agree. Mathematics is fine for what it can be used for, but using it for economics is frought with limitations.

Hmm.  I guess I haven't been pushing duality lately.

There is a time and a place for mathematics, but it has limitations too.  You want to build a mathematical model, but should be aware of limitations the further you get from a hard science into a chaotic one.  I don't know how much clearer I can get than 'truth there" immediately after Warren's well done if one perspective only effort.

And this is but one example of duality in this problem.  I've often admitted leaning left, but that doesn't mean one should shut down everything coming from the right and demonize at every opportunity.  You can applaud a scientist's desire to build the accurate math based model while being careful of the partisan politician's instinct to confirm what he has already committed himself to.

But I suppose it is simpler to cling to one tight perspective than to try to understand opposites.

[pbrower2a]

(09-10-2017, 09:49 PM)Warren Dew Wrote:

(09-10-2017, 10:51 AM)Eric the Green Wrote:

(09-09-2017, 09:02 PM)Warren Dew Wrote:

(09-09-2017, 03:13 PM)Eric the Green Wrote:

(09-09-2017, 01:46 PM)Warren Dew Wrote: If you want to understand it better, I'd suggest brushing up on your algebra and calculus, or learning them if you haven't.  While in theory I could try to teach them to you on this forum, there are far more efficient ways for you to learn them, and frankly my algebra teaching attention is fully taken up by my daughter.

Or maybe, just speak English..... the "many of the left" do not think in terms of scalars and functions, although you say they have opinions and assumptions about supply and demand. We don't need to re-study algebra just in order to understand your post.

If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

Speaking in terms of "Georgist land taxes" is not speaking English either. Throwing terms around without defining them is just one-upmanship, hoping to win an argument by default because no-one can understand you. Define your terms, or don't use them.

pbrower2a seemed to understand it.  But hey, if you need help:

http://lmgtfy.com/?s=d&q=georgist+land+tax

My college major was economics. I took calculus and know well what functions and scalars (a/k/a coefficients) are. It's telling that much of the mathematics behind economics was worked out by chemists.

The idea of Henry George is of course to tax rents, the easiest large incomes that people can get. Rents are beyond the usual, competitive reward for entrepreneurial activity or onerous toil. Exploiting a permanent and intractable scarcity or a monopoly privilege is far easier than even shrewd investment in honest business.

[David Horn]

(09-10-2017, 09:41 PM)Warren Dew Wrote:

(09-10-2017, 11:17 AM)David Horn Wrote:

(09-09-2017, 09:02 PM)Warren Dew Wrote: If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

This is an incredible statement.  Yes, economic models need some level of math to create and use them, but the most complex models tend to fail more often that their more simplistic cousins, because they assume a level of precision impossible to obtain in a social science.  Humans act rationally and irrationally, but most importantly, without an easily quantifiable pattern.  Chaos Theory is a much better tool to deal with economics: precision decays as the predicted future becomes more distant from the present.

Your post again fails to understand mathematics - and modeling.  In fact, using more advanced mathematics normally results in a simpler model, rather than a more complex one.  For example, Kepler used some ideas from calculus to come up with a model of orbital mechanics which was much simpler than the previous Ptolemaic and Copernican models that relied on scores or hundreds of epicycles, and when Kepler's model was rederived using Newton's fully calculus based theory of gravitation, it became simpler still.

Economics is not physics.  It's a social science.  Because humans can and do act irrationally, the two fields are essentially different.

Warren Dew Wrote:

David Horn Wrote:And fwiw, the most successful modeling exercises in the post 2008 period have been old IS-LM models used by the classical Keynesians.  They focus on trends rather than specific conclusions.  Along with most of the freshwater economic schools, neo-Keynesians tried the higher precision route too.  It lead them astray.  Behavioral economics finally broke the rational-actor bubble, that held firmly to the idea that people act rationally in economic matters.  They don't, so markets don't either.

Actually, it was only by retrofitting parameters for the IS-LM model after the fact that it could be made to look even qualitatively accurate.  And that didn't explain why the parameters varied so much over the last three quarters of a century.  Of course, any model could be made to look accurate with the right parameters.

Incidentally, the IS-LM model also requires rationality of the actors.  But then, people have not been shown to act irrationally on average, only as individuals, which is irrelevant for the purposes of the models.

Economists like Greg Mankiw, among many others in the freshwater school, believed complex models that postulated that the massive expansion of the money supply in the post-2008 period would trigger high inflation and higher unemployment.  It didn't happen did it?  On the other hand, the saltwater school predicted no inflation and slowly declining unemployment.  They also argued for a huge stimulus to expedite the recovery, but the GOP rebuffed that entirely, preferring their typical tax cut method, which did nothing of note.

[Warren Dew]

(09-11-2017, 03:43 PM)David Horn Wrote: Economists like Greg Mankiw, among many others in the freshwater school, believed complex models that postulated that the massive expansion of the money supply in the post-2008 period would trigger high inflation and higher unemployment.  It didn't happen did it?  On the other hand, the saltwater school predicted no inflation and slowly declining unemployment.  They also argued for a huge stimulus to expedite the recovery, but the GOP rebuffed that entirely, preferring their typical tax cut method, which did nothing of note.

What are you smoking?  Tax rates have not been cut post 2008.  The last major tax rate cut was in 2001, and was successful in heading off what was shaping up to be a very deep recession - something that Democratic demand side policies failed to do after 2008.

As for the rest of it, you need to learn the math, not just regurgitate political talking points you don't understand.

[Warren Dew]

(09-11-2017, 06:40 AM)pbrower2a Wrote: My college major was economics. I took calculus and know well what functions and scalars (a/k/a coefficients) are. It's telling that much of the mathematics behind economics was worked out by chemists.

The idea of Henry George is of course to tax rents, the easiest large incomes that people can get. Rents are beyond the usual, competitive reward for entrepreneurial activity or onerous toil. Exploiting a permanent and intractable scarcity or a monopoly privilege is far easier than even shrewd investment in honest business.

Interesting about the chemists.  It does make sense, since both economics and chemistry are largely about equilibria and the process by which one gets there.

You can try explaining George's ideas to David Horn if you want.  It would be interesting to see him do a flip flop when the same idea come from a leftist rather than from a conservative.

[Bob Butler 54]

(09-11-2017, 03:43 PM)David Horn Wrote:

(09-10-2017, 09:41 PM)Warren Dew Wrote:

(09-10-2017, 11:17 AM)David Horn Wrote:

(09-09-2017, 09:02 PM)Warren Dew Wrote: If you're going to understand the quantitative aspects of economics and understand how the economy actually works, you have to use algebra, and in the case of understanding Georgist land taxes, an understanding of calculus is pretty necessary as well.  If you don't think of economics in mathematical terms, you're not really using economics at all; you're just making political arguments couched in misused economic terminology.  I do understand that the left is often happy to misuse economics in this way, but the truth is, economics without math is as worthless as physics without math.

This is an incredible statement.  Yes, economic models need some level of math to create and use them, but the most complex models tend to fail more often that their more simplistic cousins, because they assume a level of precision impossible to obtain in a social science.  Humans act rationally and irrationally, but most importantly, without an easily quantifiable pattern.  Chaos Theory is a much better tool to deal with economics: precision decays as the predicted future becomes more distant from the present.

Your post again fails to understand mathematics - and modeling.  In fact, using more advanced mathematics normally results in a simpler model, rather than a more complex one.  For example, Kepler used some ideas from calculus to come up with a model of orbital mechanics which was much simpler than the previous Ptolemaic and Copernican models that relied on scores or hundreds of epicycles, and when Kepler's model was rederived using Newton's fully calculus based theory of gravitation, it became simpler still.

Economics is not physics.  It's a social science.  Because humans can and do act irrationally, the two fields are essentially different.

Warren Dew Wrote:

David Horn Wrote:And fwiw, the most successful modeling exercises in the post 2008 period have been old IS-LM models used by the classical Keynesians.  They focus on trends rather than specific conclusions.  Along with most of the freshwater economic schools, neo-Keynesians tried the higher precision route too.  It lead them astray.  Behavioral economics finally broke the rational-actor bubble, that held firmly to the idea that people act rationally in economic matters.  They don't, so markets don't either.

Actually, it was only by retrofitting parameters for the IS-LM model after the fact that it could be made to look even qualitatively accurate.  And that didn't explain why the parameters varied so much over the last three quarters of a century.  Of course, any model could be made to look accurate with the right parameters.

Incidentally, the IS-LM model also requires rationality of the actors.  But then, people have not been shown to act irrationally on average, only as individuals, which is irrelevant for the purposes of the models.

Economists like Greg Mankiw, among many others in the freshwater school, believed complex models that postulated that the massive expansion of the money supply in the post-2008 period would trigger high inflation and higher unemployment.  It didn't happen did it?  On the other hand, the saltwater school predicted no inflation and slowly declining unemployment.  They also argued for a huge stimulus to expedite the recovery, but the GOP rebuffed that entirely, preferring their typical tax cut method, which did nothing of note.

This is what I meant by people making entirely different assumptions to get to results they had decided on ahead of time.  The math isn't at fault.  Just, both sides can reach for results that make them happy but dissatisfy the other.  If people can throw away things like climate science and evolution, do you expect happy times with economics?  While both factions will make claims to connections with reality, partisanship can and will trump science.

[pbrower2a]

The mathematics in science depends upon precise input of data, but in practice it gives only crude estimates in predictions.

[Bob Butler 54]

(09-12-2017, 01:52 PM)pbrower2a Wrote: The mathematics in science depends upon precise input of data, but in practice it gives only crude estimates in predictions.

It feels that the problem is less the input of data, more the crude estimates in prediction.  Neither school can project accurate enough estimates to overcome the value biases.  It turns into a complex game of he said she said.

They might have to keep trying, though.

I've been vaguely watching the French economist Thomas Piketty.  He is pushing more detailed data, different models and a theory of how it is we end up with wealth inequality.  He has gathered attention, but I haven't dug deep enough to hop on the bandwagon.  His followers are looking into the elites and how their values models encourage the wealth divide.  This, of course, makes him someone I think worth watching.

[pbrower2a]

I have my neo-Marxist theory. We Americans have the original elite of big rural landowners, basically planters without the slaves; the financiers and industrialists that Marx saw as the arch-fiends of capitalism; the managerial elite that Milovan Djilas saw in his The New Class; big urban landlords (Donald Trump is the archetype), and organized crime.   A few people make the money, much of it as economic rent, and the rest of us are expected to put on theatrical smiles as we sweat.

With the possible exception of the mobsters, whose politics are murky, the other elites are reactiona4ry in their political and economic agendas. They want as productive system in which they exact every bit of profit possible. We have been collecting elites devoid of responsibility but demanding of us all. In no way are they in competition; they are in concert. But the concert isn't something like Mendelssohn's Violin Concerto and Brahms' Fourth Symphony. It is a cacophony of cruelty.