We have just printed the eleventh (11th) straight week in which new jobless claims have exceeded 400,000 people. As Krugman notes, “The Fed predicts disastrously high unemployment as far as the eye can see(pdf) [a]nd, in response to this dire prospect, it declares its work done.”
So this it is almost palliative that Barry Ritholtz writes the Quote of the Day, or perhaps the Decade:
The sooner we recognize that the field of economics is a branch of Sociology and not Mathematics, the better off we will all be.
Anyone who has looked at the CF that Microeconomic doctrine has created over the past twenty years will not be surprised by Ritholtz’s conclusion. The question would almost be why he waited so long to say so explicitly.
Other signs that people are coming around to the positions taken at this blog:
- The gracious, even-tempered Mark Thoma has been driven to pointing out that the math, let alone the social issues, don’t work:
I had hoped to see more acknowledgement that the current soft patch may turn out to be something more significant than a temporary aberration in the numbers, and some hint of willingness to ease further should those worries come true. But the Fed shows no such willingness, in fact as Neil Irwin notes, the “employ its policy tools as necessary to support the economic recovery” language is gone, and the main question at this point is when the Fed might begin tightening policy by reversing QE1 and QE2 rather than when they might ease further.
- Brad DeLong channels Bruce Webb or me in talking about Diane Lim Rogers:
Get out of the defensive crouch, Diane. If you and your peers won’t stand up and say that every single Republican presidential candidate is talking hogwash and that every economist who wants high federal office in the next Republican administration is acting like a craven coward, then you are giving them every incentive to do so.
- The NYT—Gretchen Morgenson, of all people—notices that Executive Pay is not aligned with optimal company management, let alone shareholders:
WHEN does big become excessive? If the question involves executive pay, the answer is “often.” …just how this paycheck stacks up against, say, a company’s earnings or stock market performance is rarely laid out.