SOL, there are so many logical problems and factual errors in your post I scarcely know where to begin.
Son of Leeds wrote:not all economists have benevolent intentions. Like everyone else they are corruptible….. Put the economist in power and he becomes like a politician too and subject to the same pressures.
I never claimed that all economists are incorruptible. We are human and therefore no more and no less corruptible than any other fallible group of humans. A Government of economists would, however, be subject to the same accountability, transparency and anti-corruption controls as any other Government so this is not really relevant to whether or not we would provide better or worse government than today’s political parties.
My argument was not that we are less corruptible, it was simply that we would manage the economy better thereby generating more prosperity to meet the needs of the people.
Son of Leeds wrote: You seem to think that politicians and economists are completely different people, but many MPs were economists before they went into politics - Gordon Brown, for example.
Factually incorrect – perhaps it is you who should read your history? Gordon was a history graduate and worked as a lecturer and journalist before entering politics. I’m pleased you have mentioned him though, because he was a rare example of a political leader who listened to economic advice, grasped what he was being told, and usually demonstrated good economic judgement.
Son of Leeds wrote: As for the debts of Spain, as an example, I'm not sure they are as great as were the debts of RBS in 2008.
Spain’s debts (as a % of GDP) are not as large as Greece or Italy, or indeed the USA or UK. They do, however, have a credibility problem because the 2011 deficit was 8.5% of GDP despite a previous commitment to 6%, and their Government did itself no favours by rewriting the agreement with the EU for a target of 4.4% of GDP this year – unilaterally declaring the target should be increased to 5.8% before rowing back to 5.3% (nothing spooks markets more than undershooting expectations and breaking previous promises).
My main criticism of Spain, however, for some time (read my previous posts) has not been its debts , but its low productivity and competitiveness mainly because it ignores economic fundamentals in its labor market. That is where it has consistently ignored external economic advice and that is why it has an unemployment rate of 24% and youth unemployment of 50%.
Son of Leeds wrote: I'm not sure they are as great as were the debts of RBS in 2008. The banking system went wonky because economists came up with false models that the heads of those businesses could not understand and so could not criticise.
Here you are really out of your depth lecturing on things you appear to know nothing about. RBS was not brought down by the advice of economists and I notice you provide no substantiation for such an absurd claim. The Executive Directors of RBS, e.g. Goodwin, Cameron, Pell, Fisher, who made the key decisions on the RBS Board are not (to my knowledge) economists. Most of them are career bankers.
The due diligence on RBS’ disastrous purchase of ABN Amro would have been done by accountants, not economists. Innovation in financial products such as securitised mortgages, e.g. CDOs, was not the creation of economists. The models to calculate risk associated with such products would have been done by the geeks and quants in the market and credit risk departments – not the Group economist. We have no say in the design of incentivisation and bonus schemes that encourage the booking of short term sales at the expense of long term risk. As someone who has spent some of his career in financial services I know
these things – you are just spinning an inaccurate yarn to suit your argument.
The role of the Group Economist in a financial services institution like RBS is to monitor and analyse global economic markets and trends to identify opportunities and threats for banking products. We do not run our banks or have an executive say in their decisions.
Son of Leeds wrote:It seems to me that the evidence of economists being benevolent is unhistorical. The great boom of Holland in the 17th century, Italian banking under the Medici's in the 15th century, or Britain in the early 19th was not led by economists. The Great Depression of the 30s was more the effect of govts. listening to economists than those events.
Questioning the economics profession in the 15th or 17th century would be like questioning the medical profession back then for practicing lobotomy or putting leeches on people. These were not modern developed professions back then.
Again, you provide no substantiation for your assertion that the Great Depression was caused by economists, but I am prepared to concede that back then the profession was still in its infancy and we did not understand what was going on as we do now. What we learned from those events, for example through the ground breaking work of economists such as Keynes and Fisher, was instrumental in preventing the banking crises and recession of 2008 from turning into another full blown depression. The UK rescue scheme by Gordon Brown (who listened to his economic advisors), copied in the USA and EU, really did save the world from financial and economic collapse just a few years ago. And this was largely thanks to economists.
There will be no end to the problems afflicting mankind until economists become rulers, or, by some miracle, rulers become economists.