There is nothing immoral about making an economic forecast. It is immoral to base national economic policy on economic forecasts, especially those that are developed quantitatively. Why? Economic forecasts made by professional economists are no more accurate than those made by astrologers, truck drivers or anyone else. The following article is from the Mises Institute which provides information about Austrian Economics and its teachings. If Americans are scared of the word “Austrian” they shouldn’t be. The differences between Austrian Economics and Free Market Economics as explained by Adam Smith are so few, I can’t remember exactly what the differences are. It is kind of like the difference between karate and taekwando. They are both a means to the same end.
The Truth About Economic Forecasting
Can anyone make an accurate economic forecast? Yes, I can and you can to. But, we can’t do it with quantitative models or by claiming one number causes another. Also, we can’t be accurate as to exactly when an economic event will occur. For example, I have been forecasting the collapse of the United States economy for a number of years. It hasn’t collapsed yet, but I am sure it will.
The way I make forecast is the same way human beings make accurate forecasts everyday of their lives. Here is an example, “Uncle Willard has started drinking a fifth of whiskey every day and then drives drives recklessly running red lights and speeding. I predict that Uncle Willard is going to suffer a catastrophic event in his life, the least of which could be getting a DWI and going to jail for a while.” That in my opinion constitutes an accurate forecast.
I know the United States economy is going to collapse because of government policies that cause the nation’s resources to be increasingly mis-allocated with every passing day. Welfare for the rich changes them the same way welfare changes makes poor people less productive. As the Federal Reserve’s quantitative easing continues to line the pocket books of the worlds billionaires, they lose interest in providing goods and services. Innovation dies off. Who needs to run a business efficiently when the Federal Open Market Committee is running up the price of your stock?
My forecasts are based on knowledge of human behavior. An Ivy League economist, if asked what causes inflation would give a tired old answer like, “too much money chasing two many goods.” If I were asked the same question, this would be my answer. Inflation is caused by the incentive that causes the Federal Reserve to create too much money. By the way the incentive to inflate a currency is always 100% political and has nothing to do with economics.
Here is a good article from a different blog on a different topic. This guy explains how manipulation of the stock market creates Fragility in the economy.
Hard Times Coming is a timely tune by Curbside Jimmy. Hard Times Coming
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