Larry Davidson Spouts Off

Okay -- I am in my 60s and while I think I moaned a lot when I was younger -- the truth is that I seem to spend a lot of time complaining to my friends about macro issues and especially the way the press and various talking heads abuse what ought to be a humble and simple science. One problem for me is that I end up sharing my complaints in various outlets -- emails to friends, cocktail parties, lines at the grocery store, Facebook comments, notes to students, and so on. It seems more efficient to have one place to write these gaseous essays. So let's get started.

If I have one really big beef, it is the way that people use macro for their ideological and other personal ends (e.g. to show that you are much smarter than your Dad and you know who you are Jason, Ashley, Beth, Laura). While ideology can be fun in the right place, many people are seeking some sort of answer about the past, present, or future economy. There is an answer. Macro is a science. Since any country's economy is complex, there could be many answers to any specific question. There is plenty of room for difference of opinion, especially if we are dealing with the future. But geez guys, let's get real -- labels, name calling, and bringing up religious figures (e.g. Galbraith, Krugman, etc) isn't always very productive. For example, we are in the middle of many productive debates about the best monetary and fiscal policies for our times -- but somehow the good stuff gets edged out by debates about rocket scientists (finance guys) and the downfall of capitalism. There is plenty of room for the latter but I fear that the average bloke sometimes doesn't know the difference.

A second gripe has to do with the abuse and misuse of reported figures. There is hardly a reported macro indicator that isn't complicated. It always amazes me, however, how writers can tell stories based on one month's information. Today's announcement of the unemployment rate was a good example. One writer pointed out that despite the good news in today's announcement, the job market still faces stress. Please -- is that news? Analysis? Why do we even try to come to conclusions about the goodness of a one month report? Surely most of us who read this stuff understand that most of these figures have enough randomness in them to preclude making judgments without at least 3-6 months of data. I know it might be boring if we didn't have all this nonsensical reporting -- but then again, if it wasn't there it might give us all a little more time to pet the wife or kiss the dog.

I think blogs are supposed to be short. I think I have done enough damage for one day. Cheers,