At my prodding, Sean Carrol considered the differing public treatment of physicists and economists: In the public imagination, natural scientists have figured out a lot more reliable and non-obvious things about the world, compared to what non-experts would guess, than social scientists have. The insights of quantum mechanics and relativity are not things that most of us can even think sensibly about without quite a bit of background study. Social scientists, meanwhile, talk about things most people are relatively familiar with.
Economics is founded on qualitative bases: "more is better", etc. If you change those qualitative bases, as for example AGW is forcing us to consider doing, all of economyics simply falls apart. Budget constraints and I difference curves cease being relevant, yada, yada. Or say, as has been theorized (Buchholz) we are approaching the end of the era of scarcity ... what then is left of economics as it currently exists? Economics, Dear Reader, is a dinosaur among sciences.
Thank Albert Einstein. He grounded theoretical physics at a time when experimental physics was king. Now, theoretical anything is running side by side with provable, demonstrable anything. Economics is a social science, and has a rate of decay that depends on the changing knowledge of the players. There is not one actual "economy."
Economy is the manmade simple distribution of paper on a small blue dot. Physics is the understanding of ourselves, the universe and everything we will ever know (that actually is real) Which is more simple? I sincerely hope you're joking, or you really are brainwashed. Even the hardest math in economy doesn't come close to middle physics. The reason there are so few physicists in economy (though increasing) is because they have better, more important things to do with their lives. Such as advancing our species understanding of the world as a whole; Leading to literally all new technological advancements. If humanity weren't standing on the shoulders of these former giants we would be in the stone age. Most of todays biggest people in finance and economy are rich because they are reliant on a broken system and a corrupt one.
The "market" for treasuries is not a real market, BTW. And printing money and handing it to bondholders is a form of default by inflation. The financial system is in its last few laps around the track, the engine is leaking oil, and will be seizing up momentarily. Gold has a 5000 year record of success as money -- fiat systems -- none has even made it 100 years. I know where I am putting my money.
The following is in response to your reply to Matthew C.
Treasury rates are very low because:
1. The Fed has announced that it intends to put a floor on Treasury prices, which implies that it will purchase as much as necessary to enforce its rate ceiling. Why not buy US Gov paper when you know you can flip it back to the Fed at a guaranteed price? It's risk-free. Historically low rates represent major players front running central bank policy. Thus, low rates do not reflect the market's belief in the ability of the Federal Gov to repay its debts. They reflect a belief in the Fed's willingness to print money in unlimited quantities. From Bernanke's famous helicopter speech:
"A more direct method, which I personally prefer, would be for the Fed to begin announcing explicit ceilings for yields on longer-maturity Treasury debt (say, bonds maturing within the next two years). The Fed could enforce these interest-rate ceilings by committing to make unlimited purchases of securities..."
2. Volatile market conditions have sent capital scurrying into perceived safe havens like bonds, gold, the Swiss franc, and the US dollar.
3. Positive feedback and trend following accentuates the price action caused by the factors named above.
Regarding gold, the tea party argument is silly. Gold has been moving in a strong upward price trend since 2000, long before the tea party existed, driven in part by central bank purchases in the Middle East, investors in China and India, influential market participants like Jim Rogers, John Paulson, and George Soros, and large institutional buyers like the University of Texas.
All physicists don't agree. Thats just an illusion because most people can't understand what physicists disagree about. Start a debate between the loop quantum gravity guys and the string theorists, or worse the standard model guys and the string theorists.
On the other hand, economics seems understandable so the disagreements seem more common than they are.
Example: "Is being able to sell organs welfare increasing over not being able to?" almost all economists will say "yes!" Almost all non-economists will say "no".
I don't know about the rest of you, but back in high school I learned the difference between accuracy and precision. Brian M, you're calling precision "reliability" then inferring accuracy based on precision. Neither is advisable.
Hence the joke where three economists go hunting; one shoots a foot to the right of the deer, the second shoots a foot to the left of the deer, and the third shouts, "Hurray! We got it!"
physics is complex, therefore simple. physics deals with mass. physics is rational in that cause and effect are used to elucidate function and form.
economics is complicated, therefore hard to understand. economics is massless. economics is a mutating aggregate where form and function are used to manipulate cause and effect.
is it any wonder that some people view economics in a lesser light.
physics deals with the rational metabolism of this universe.
economics deals with metabolism in an irrational way, up to and including the cannibalization of our species.
Physics is simple, so the physicists all agree. Economics is complex, so economists will tend to disagree, as causality becomes increasingly difficult the more complex the process being studied. All scientists come in "after the fact" to explain the world -- most discoveries in science explained a new technology, whether we are talking about thermodynamics or information theory.
There is less disagreement among physicists than among biologists, and less among biologists than among brain scientists/psychologists, and less among them than among social scientists. This is predictable because we are seeing more complexity at each level.
Well Matthew you thought wrong. If people think that the US is spending money that will never be repaid, why are interest rates on US treasury bills so low? They are the lowest they have been in 50+ years.
Interest represents sum of the perceived risk that the borrower (US Government) will default and the time value of money (inflation plus discount rate). People buying T bills perceive the risk of default to be very low and that they have nothing better to do with their money (i.e. can't think of how to invest it in something productive).
If people are terrified to invest in hard assets for their business (readily apparent because they are not doing so), why are they not terrified of investing in Government paper (readily apparent because they are doing so)?
I think you are right that some people don't trust the US Government and are buying gold. I think those are the people (tea partiers) who listen to Glen Beck and believe what he says about gold. I think they have been misinformed, but I think that is true of anyone who listens to Glen Beck.
There is something wrong with the idea that because people don't trust the US government they are buying its debt in record numbers at record low prices.
From August 1, 2011 to September 1. 2011, the US added $355,056,348,594.30 in debt. That is more than all the gold in Fort Knox. At the August 11, 2011 price of 1,890.04 per oz it is only $278 billion.
All the gold that has ever been mined (~165,000 tonnes by 2009) is only worth ~$10 trillion at $1,890.04 per oz. The total US debt is greater than all the gold that has ever been mined.
People with money are buying US treasuries in record numbers even as those treasuries produce record low yields.
Economics is founded on qualitative bases: "more is better", etc. If you change those qualitative bases, as for example AGW is forcing us to consider doing, all of economyics simply falls apart. Budget constraints and I difference curves cease being relevant, yada, yada. Or say, as has been theorized (Buchholz) we are approaching the end of the era of scarcity ... what then is left of economics as it currently exists? Economics, Dear Reader, is a dinosaur among sciences.
Thank Albert Einstein. He grounded theoretical physics at a time when experimental physics was king. Now, theoretical anything is running side by side with provable, demonstrable anything. Economics is a social science, and has a rate of decay that depends on the changing knowledge of the players. There is not one actual "economy."
Exactly.
you mean biophysical question ;)
Economy is the manmade simple distribution of paper on a small blue dot. Physics is the understanding of ourselves, the universe and everything we will ever know (that actually is real) Which is more simple? I sincerely hope you're joking, or you really are brainwashed. Even the hardest math in economy doesn't come close to middle physics. The reason there are so few physicists in economy (though increasing) is because they have better, more important things to do with their lives. Such as advancing our species understanding of the world as a whole; Leading to literally all new technological advancements. If humanity weren't standing on the shoulders of these former giants we would be in the stone age. Most of todays biggest people in finance and economy are rich because they are reliant on a broken system and a corrupt one.
This article is hilarious. One of the best pieces of inadvertent satire I've read in a long time.
The "market" for treasuries is not a real market, BTW. And printing money and handing it to bondholders is a form of default by inflation. The financial system is in its last few laps around the track, the engine is leaking oil, and will be seizing up momentarily. Gold has a 5000 year record of success as money -- fiat systems -- none has even made it 100 years. I know where I am putting my money.
The following is in response to your reply to Matthew C.
Treasury rates are very low because:
1. The Fed has announced that it intends to put a floor on Treasury prices, which implies that it will purchase as much as necessary to enforce its rate ceiling. Why not buy US Gov paper when you know you can flip it back to the Fed at a guaranteed price? It's risk-free. Historically low rates represent major players front running central bank policy. Thus, low rates do not reflect the market's belief in the ability of the Federal Gov to repay its debts. They reflect a belief in the Fed's willingness to print money in unlimited quantities. From Bernanke's famous helicopter speech:
"A more direct method, which I personally prefer, would be for the Fed to begin announcing explicit ceilings for yields on longer-maturity Treasury debt (say, bonds maturing within the next two years). The Fed could enforce these interest-rate ceilings by committing to make unlimited purchases of securities..."
2. Volatile market conditions have sent capital scurrying into perceived safe havens like bonds, gold, the Swiss franc, and the US dollar.
3. Positive feedback and trend following accentuates the price action caused by the factors named above.
Regarding gold, the tea party argument is silly. Gold has been moving in a strong upward price trend since 2000, long before the tea party existed, driven in part by central bank purchases in the Middle East, investors in China and India, influential market participants like Jim Rogers, John Paulson, and George Soros, and large institutional buyers like the University of Texas.
All physicists don't agree. Thats just an illusion because most people can't understand what physicists disagree about. Start a debate between the loop quantum gravity guys and the string theorists, or worse the standard model guys and the string theorists.
On the other hand, economics seems understandable so the disagreements seem more common than they are.
Example: "Is being able to sell organs welfare increasing over not being able to?" almost all economists will say "yes!" Almost all non-economists will say "no".
I don't know about the rest of you, but back in high school I learned the difference between accuracy and precision. Brian M, you're calling precision "reliability" then inferring accuracy based on precision. Neither is advisable.
Hence the joke where three economists go hunting; one shoots a foot to the right of the deer, the second shoots a foot to the left of the deer, and the third shouts, "Hurray! We got it!"
physics is complex, therefore simple. physics deals with mass. physics is rational in that cause and effect are used to elucidate function and form.
economics is complicated, therefore hard to understand. economics is massless. economics is a mutating aggregate where form and function are used to manipulate cause and effect.
is it any wonder that some people view economics in a lesser light.
physics deals with the rational metabolism of this universe.
economics deals with metabolism in an irrational way, up to and including the cannibalization of our species.
in physics the lever is the implementer.
in economics the lever is lacking.
You are welcome Robert ;)
Physics is simple, so the physicists all agree. Economics is complex, so economists will tend to disagree, as causality becomes increasingly difficult the more complex the process being studied. All scientists come in "after the fact" to explain the world -- most discoveries in science explained a new technology, whether we are talking about thermodynamics or information theory.
There is less disagreement among physicists than among biologists, and less among biologists than among brain scientists/psychologists, and less among them than among social scientists. This is predictable because we are seeing more complexity at each level.
That's a fascinating lecture by Lee Smolin. Thanks for posting the link to it.
Well Matthew you thought wrong. If people think that the US is spending money that will never be repaid, why are interest rates on US treasury bills so low? They are the lowest they have been in 50+ years.
Interest represents sum of the perceived risk that the borrower (US Government) will default and the time value of money (inflation plus discount rate). People buying T bills perceive the risk of default to be very low and that they have nothing better to do with their money (i.e. can't think of how to invest it in something productive).
If people are terrified to invest in hard assets for their business (readily apparent because they are not doing so), why are they not terrified of investing in Government paper (readily apparent because they are doing so)?
I think you are right that some people don't trust the US Government and are buying gold. I think those are the people (tea partiers) who listen to Glen Beck and believe what he says about gold. I think they have been misinformed, but I think that is true of anyone who listens to Glen Beck.
There is something wrong with the idea that because people don't trust the US government they are buying its debt in record numbers at record low prices.
From August 1, 2011 to September 1. 2011, the US added $355,056,348,594.30 in debt. That is more than all the gold in Fort Knox. At the August 11, 2011 price of 1,890.04 per oz it is only $278 billion.
http://en.wikipedia.org/wik...
All the gold that has ever been mined (~165,000 tonnes by 2009) is only worth ~$10 trillion at $1,890.04 per oz. The total US debt is greater than all the gold that has ever been mined.
People with money are buying US treasuries in record numbers even as those treasuries produce record low yields.
And there is a video
"Physics in Trouble: Why the Public Should Care "
http://www.youtube.com/watc...