Wednesday, March 31, 2010

You Know What Else Bugs FLG

Reihan wrote an article in Forbes on financial reform that basically says what FLG has been writing in this space for months, but with quotes from so-called expert economists.

Big banks have been helped out by the government and have an unfair advantage. (Although Reihan doesn't mention how this makes the recent big bonuses so annoying.) Then explains the Volker Rule, or as FLG likes to call it the return to Glass-Steagall, but again doesn't give a compelling justification for it. Although, Reihan does mention a book in favor of it that FLG might pick up in the vain hope that it finally contains a strong argument.

Then, Reihan goes on to ask whether the Volker rule could work or would even be beneficial. Finally, he talks about capital requirements and a proposal by Hart and Zingales, which does sound intriguing and was something that FLG had thought about a few weeks ago.

Why does this bug FLG? To be frank, it bugs FLG because he has already been over this stuff. Seriously, FLG likes Reihan's commentary and all, but what the fuck are these so-called pundits and experts doing? FLG comes up with this shit in about ten seconds, types it up in about 1-2 minutes, and done.

Sure, economists and other experts need to write papers and books. That's what they do. FLG, however, has become increasingly convinced that a student who paid attention in intro macro and micro probably knows 70% of what a PhD in econ knows that's useful. Somebody who paid attention in intermediate micro and macro probably knows 90% of what's useful for policy that a PhD in econ knows.

Shit. With what FLG learned in intro and intermediate econs, plus international trade and finance, and international financial markets, he's thought of about 95% of what's coming out as policy prescriptions. Those PhDs know more math, but it sure isn't translating into any policies that a good student of intro econ couldn't figure out.

Then we get to the journalists. Again, what the fuck are they doing? Sure, their requirements for sourcing and fact checking are probably a tad higher, but FLG just cranks this shit out. Normally weeks or months before it's hitting most papers.

So, again, what's bugging FLG?

Simple. It scares the shit out of him that he feels like he knows about as much as the so-called experts on these issues. Maybe the theories and policies are just getting dumbed down by economists explaining them to journalists and then by the journalists explaining to the people, but it sure seems like FLG is roughly on par with the experts in ability to think about these things, and let him tell you something -- he's no expert.


Withywindle said...

What percentage of the country has taken the two intro courses and paid attention?

FLG said...

The census figures say that about 50% of people attend college. So that cuts out half for sure.

All considered the number of econ majors is probably a decent proxy. Maybe at a bit more for the government and business majors who actually paid attention.

That's, I dunno, 10% of the population -- tops. Probably more like 5%.

Withywindle said...

Eh, voila, the size of the yeoman elite.

Reihan said...

Hey man, I'm just trying to inform the public!

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