Steve Levitt - Why You Can't Trust Economists

Trend Analyst and Author of Best-Selling Book, Freakonomics, Steve Levitt explains to the business leaders at Leaders In London 2007 the two different types of economists, one of which you shouldn't trust.
http://www.leadersinlondon.com/youtube

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[flynn2008]

@stratvic

I figure, economists would be pretty good at forecasting macroeconomic by now. It's not that hard, just imagine the dumbest thing the government could do, and wait 4-5 years to see the effects.

[stratvic]

The problem is two fold.

1. Keynesian economics is both politically popular due to the power it bestows on politicians and is fundamentally flawed.

2. You can not predict how political behaviour and decisions will be balance what is sensible to achieve attributable short term effects against those that while illogical will buy enough votes for re-election.

[piax00]

@nsg666 How about this McMurtry quote: "We might say that economics is to the corporate market what theology was to the medieval Church, the investitured deifier of the ruling order." Thanks for the Keynes quote.

[bubbledum2012]

does he have a slight lisp or is it just me hearing that

[kitt998]

guy asking the question sounds like zod from superman II !!!

[nsg666]

To put it in the words of Keynes himself:

“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”

I guess that sums it up quite nicely really...

[mango119]

That was really funny, cheers to Levitt. I see a point on why Macroeconomics is hard:)

[danteandmymonkey]

Interesting

[thiagomassara]

@d2s4ui5 and how's that not economics?! oO

[thiagomassara]

@hoodoo961 I believe even Keynes didn't want his theories applied in real life... he knows how dangerous it can be to give the government the power of monetary policy and therefore they would never work. Still, he made the perfect representation of the mechanisms in macroeconomics. That's the voodoo.

[majik2hanz]

He should study "research". In particular, how often research reaffirms what the funders are seeking and then do a detailed summary of how often non reaffirming studies are publicized. For example, if a pharmaceutical company found in a double negative test that taking nothing results in better outcomes than getting drug, would it be published? Or testing whether the amount of money spent on research and by whom determines the outcome.