PB: We physicists are way up this learning curve of detecting signals in noise. Signal averaging is the first go to method but signal to noise improves as the square root of sample size. If this isn’t working early on it’s only going to get worse path forward. The only thing that works first time every time is to identify a robust signal variable that jumps off the page. For example Steve Keen keeps pointing out that the correlation over the trailing three decades between the slope of private debt (aka credit) and unemployment is -.93. This is not noisy signal buried in noise. When you find a true controlling variable you don’t need lots of ANOVA and signal averaging. The data grabs one by both ears and screams: Hey. Look here!
Me: Precisely. And if debt build up is continual and austerity is not the macro answer…how can anything other than a new paradigm of COSTLESS monetary gifting be the answer. Keen and other heterodox economists even acknowledge and advocate monetary gifting as a policy, it’s just that
1) they don’t know how to implement it without causing inflation, although they mouth the flimsy liberal orthodoxy that limited gifting with a UBI would not create inflation. Money of course is NOT the primary and operant factor in “monetary” inflation…it’s the complete freedom that business decision makers have to raise their prices because who or what is going to stop them from doing so???? especially in a macro-economically monetarily austere system when they perceive more money than normal is forthcoming????
2) they haven’t looked at and thought economically about where the terminal expression point for any and all price inflation is (retail sale)
3) they don’t have the knowledge of the digital nature of the accounting and pricing systems and so they miss how a high percentage discount/rebate monetary gifting policy at retail sale could be utilized to break up the idiotic and contradictory monopoly paradigm of Finance, implement the new paradigm of Direct and Reciprocal Monetary Gifting and put monetary and purchasing power scarcity forever in the dust bin of history.
Ah, not looking everywhere for answers (being orthodox) and not modeling temporal realities in their theories and potential policies….just what everyone here is lamenting. It’s way past time that heterodox economists stopped being extremely erudite policy and paradigm dunces.
JJ: It is scary to think that economists think they can solve problems with models based on individual experiences that are then introduced into large populations. I think that economists are using numbers and models in place of an empathic understanding that using people in experiments can mean real harm for the people, (for example, introducing austerity after banks commit fraud and then are bailed out while those defrauded are foreclosed upon). If economists would think about how people benefit, or not, from policies or actions, then the policies would make sense. Experimentation for the sake of experimentation is a fool’s errand.
Me: JJ, Exactly. Now if economists, politicians, the lords of finance and large political constituencies would cognite on the fact that, that empathic understanding was the natural personal experience of grace as in love in action/love in application….they’d also cognite on wisdom which is the best integration of the practical and the ideal. Wisdom isn’t wisdom unless it is imminently practical, and as I have shown the policies of economic and monetary grace are best accomplished within commerce’s infrastructure of double entry bookkeeping, using its digital nature and an understanding of where and when it could best be APPLIED in the economic process. Play the policies out with the above criteria in your mind or better yet on a clay table to make them more temporally real to yourself….and the elegant simplicity and yet thorough applicability of them will become apparent to you.
The mental and temporal reflectivities and alignments of logic and wisdom after all DO count.