I worked directly for Chief Economists at two major banks, First Interstate in the late 1980's, and KeyCorp in the 1990's. While it would be nice to know when the next recession or interest rate move will happen, no one thought the economist knew better than other random members of the executive committee. Economists are good at presenting the information that seems useful, but as per tying it together, they can't and most people making important decisions know that. This is why economists are always on TV and not in boardrooms. It is also why economics departments at banks have gone from large staffs in the 1970s (at the height of the Keynesian modeling boom), to basically one guy, because it was discovered his or her only value is getting the company name on TV. If someone presents themselves as especially credible because they were a chief economist, I know they are fools.I wish that he would have remembered to have written macroeconomics and macroeconomists instead of just economics and economists. Just off the top of my head I can think of one private sector chief economist who added several hundred million dollars in value to his firm. I don't think Google hired Varian just for his telegenic good looks.
I spent 3 years of my life working directly for private sector macroeconomists, and the main thing I learned is they don't know anything useful.
Wednesday, 4 August 2010
Economists for PR?
Falkenblog trashes macro: