Economic Insanity

[Travis Retriever]

Well, I'm taking an economics class at my college again (Microeconomics), and wow...The stupidity is rather painful.

Here are a few gems I've encountered in the first two days of lecture and from the first chapter of my textbook alone.
In red will be the gems, in blue ()'s will be my thoughts/mental response to them.
Unless otherwise stated, the stuff from the Prof will be paraphrased, and the stuff from the textbook will be exact quotes.


Prof: "I don't care what you think; you could be the most liberal liberal, or the most conservative conservative, but as long as you are able to present an educated opinion, that's what counts."
(Which must be why his opinion and what the textbook says is what is on the tests...  Also, false dichotomy much?  Finally, opinion?  I'm sorry, but do biologists debate about whether evolution is a fact or not?  Yeah.  This is why people often say the social sciences aren't science.)

My textbook: "Supporters of the (minimum wage) law believe that the losses to employers and to workers who are unemployed as a result of the law are more than off by the gains to workers who receive higher wages than they would without the law.  Opponents of the law believe the losses are greater than the gains.  The assessment by any individual depends, in part, on that person's values and political views. The positive analysis an economist provides would play a role in the decision but can't by itself decide the issue one way or the other."
(Citation needed on that bit of higher than would be wages from the minimum wage law.  Gotta love how it ignores over 75 years of economic research, just to make it appear as an opinion issue...Can you imagine a biology textbook doing this?  Also, gotta love how they explained in detail the law supporter's position, but pretty much blew off the opposition's...)

Prof: "Cash is what gets you through the tough times.  For example, people might buy something at lower cost, and sell it at a higher cost, like a house or a boat.  Many people believe that hard assets like housing, gold, and other precious metals are what get you through the hard times; that their prices will always increase with inflation.  I'm not one of them.  Simply because it hasn't held well for housing."
(Where to begin...Conflicting ideas for one, and other, so...government fucked up prices using fiat currency among other things on housing, therefore gold and silver aren't that good.  WTF?  Non sequiter (sp?), over-generalization, AND a demonstration of a weak understand how these things work.  I mean, come on! This guy claims to have experience in financial markets and as a CFO, and business/corporate adviser and even claims to do so in the summer...Last I checked, government didn't make laws that would create a gold/silver bubble.  Then again, he IS a Keynesian...)

Textbook: "A famous debate in economics was about whether the changes in the money supply caused changes in total income or whether the changes in total income caused the changes in the money supply.  Each side in the debate accused the other of committing the error of reverse causality."
(*HEADDESK* Because the printing press had nothing to do with inflation, right?  This had seriously better not be a debate today...)

Something else my textbook gets into is debates on statistics, data, methods of gathering data, etc.
Man...reminds me of Mises' "Epistemological Problems of Economics" and the Austrian method of Praxeology.  If I wasn't a supporter of it before, you can bet I am now.

Prof: "There is no money in the SS 'trust fund'.  You guys [younger people] are going to be the ones payer for my retirement in that way.  You had a chance with G.W. Bush to have that changed, to allow you to direct some of your own money into your own private account, but through your silence, you blew it."
(Where to even begin...  1st of all, we didn't AGREE to the fucking system to begin with.  2.  WE weren't part of the voting population that has known for the past several decades this Ponzi Scheme wouldn't last.  3.  WE aren't part of the richest generation to ever walk the face of the Earth.  4.  He DOES know that Bush's plan was more bullshit corporatism, right?  I've had this guy before in Macro.  He's justified us paying for his retirement via SS because he 'paid the max into the system for the max amount of time' or something like that.  So what?  It's not our fault he's got Stockhelm Syndrome over this shit.  And once again, it's been public knowledge that SS would be bankrupted soon for decades now.  He's had the time, knowledge, etc to try and change it.  Or if anything, at least far more than anyone in MY 20-something generation certainly has had.  HE fucked up, not us.  Also, tacit consent is bullshit.  By his logic, a woman is not raped if she is asleep (and doesn't resist and/or shows inaction) when it happens...  Then again, this guy spends a fair amount of paid lecture time making cheap shots at his wife...)

But wait, it gets even better:

Prof:  "[In response to being asked what would happen if Social Security was scrapped/abolished/etc]  The economy would collapse as a result of those seniors not having the money to spend.  So it will always be with us in one form or another."
(1.  MAJOR broken window fallacy.  2. Bullshit.  Not when the government runs out of money it won't be.)

Those are just the ones I can think of for now.

[Travis Retriever]

Wait, I've got more.

Prof:  "If you're a one product company or a one product nation and demand goes down for it, you're screwed.  The folks at OPEC for example, they're smart.  If demand goes down, they reduce supply, bringing the price back up."
([Citation needed]  Also, it helps that OPEC is a government organization...  He also goes on implying that they have a monopoly.  They do not.  Even if they did it would easily be challenged and beaten.  Anyone remember what happened to Rockefeller when he tried getting rid of the competition by buying out folks and lowering prices?  That's right, it didn't work.
Finally, what about zero-product countries like Hong Kong? Explain them.)

Prof:  "South Africa has a monopoly on Diamond production.  If you were to mine diamonds and sell them, they'd just lower the price to be cheaper than you and beat you out of the market."
(Citation needed, bro...Also, much of the stuff posted for the last quote applies to this one too.  Also, who says one person can't do it?  Anyone remember Herbert Dow?)

[MrBogosity]

Something else my textbook gets into is debates on statistics, data, methods of gathering data, etc.
Man...reminds me of Mises' "Epistemological Problems of Economics" and the Austrian method of Praxeology.  If I wasn't a supporter of it before, you can bet I am now.

It's like I've often said: if logic is the art of going wrong with confidence, then economics is the art of going wrong with colorful graphs.

Prof: "There is no money in the SS 'trust fund'.  You guys [younger people] are going to be the ones payer for my retirement in that way.  You had a chance with G.W. Bush to have that changed, to allow you to direct some of your own money into your own private account, but through your silence, you blew it."

Man, what an asshole! HIS generation spends us into massive debt, HIS generation gets rich off of our backs, HIS generation sets that up to continue so that WE pay for HIS retirement even though he's now a part of the richest demographic in America, and as a result WE'RE the first generation IN AMERICAN HISTORY that won't be at least as well off as our parents, and somehow that's OUR fault???

Prof:  "[In response to being asked what would happen if Social Security was scrapped/abolished/etc]  The economy would collapse as a result of those seniors not having the money to spend.  So it will always be with us in one form or another."
(1.  MAJOR broken window fallacy.  2. Bullshit.  Not when the government runs out of money it won't be.)

And again, I go back to that "richest demographic" statistic.

[Travis Retriever]

Man, what an asshole! HIS generation spends us into massive debt, HIS generation gets rich off of our backs, HIS generation sets that up to continue so that WE pay for HIS retirement even though he's now a part of the richest demographic in America, and as a result WE'RE the first generation IN AMERICAN HISTORY that won't be at least as well off as our parents, and somehow that's OUR fault???

Indeed.  It was that bit of his that was the final straw, prompting me to start this thread.

Prof:  "That amount of public debt of [insert the amount here] is the amount YOU owe the government."
(Bullshit.  Why does he think it's called "government debt"?  It's the amount the GOVERNMENT owes, not the amount we owe the government...Unless he thinks we are the state, which, last I checked, we aren't...We can't tax each other, we sure as hell can't tax the government back, etc, etc.)

[FSBlueApocalypse]

What college is this? Crap like this makes me glad I had the professors at Florida State that I did.

[Travis Retriever]

For the sake of my privacy, I'd rather not say.  Well, at least not until after I finish this semester.


Anyways, on with the fail!

OK, this next one will require a little bit of context.  In economics, at least according to my professor, an economic recession is defined as "negative GDP growth for two quarters (6 months) or more."
Prof: "We are not in a recession.  GDP has grown a little bit; it's been a slow growth since last year, but it does mean we are not, by definition, in a recession."
(Increases in GDP according to what?  According to government statistics that define government spending as productive? (GDP = C + I + G + Xn)?  One could argue that inflation is taken into account to compensate for that, but last I checked, they use the CPI for those measurements: a bullshit standard of inflation that likely doesn't have a single thing most of us even buy, and, as demonstrated before, vastly understates inflation by at least 7%-10%.  And even if what he said were true, so what?  Unemployment is still hovering around 10%, so it's not exactly economic nirvana.)

Prof: "Unemployment is going down because the people who have been on government unemployment benefits lose those benefits after a long enough time and then they aren't counted"
(Bullshit debunked by FletchforFreedom in this thread.  Here are the relevant paragraphs from the above thread for those who don't feel like going on a text hunt:

First of all, the calculation of the unemployment rate has absolutely NOTHING to do with unemployment claims. Rather, the Bureau of Labor Statistics conducts monthly surveys of 60,000 households and uses those responses, along with Census data to determine the official unemployment figures that they report. (http://www.bls.gov/cps/faq.htm).

)

Prof:  "I try my best not to judge people based on group [so far so good actually].  For example, a few years ago, I had a student say that 'all people in social programs are lazy.' [Which to be fair, is bigotry by Shane's rules]  A young woman a few rows back stands up and, quite bravely, states that she is in a social program such that her children are in government day care while she works on her degree.  And that she wants to graduate and get a good job; and that she can't wait to start paying taxes so that I can help someone who was in my position."
(To be fair, the young man's bigoted comments were somewhat unwarranted.  However, my problem is really with the last bit.  That, she can't wait to start paying taxes so she can help someone else.  First off, given that government welfare (which I imagine this falls under) are, at best, 5%-20% efficient compared to private charities which are at least 80% efficient, if she really wants to help more people, she would want to have those programs abolished so people can donate to private charity and to do the same herself.  Sorry, but a few anecdotal success stories don't counter the hard evidence of millions of lives destroyed by the welfare state.  What's more, given that we pay over 60% in taxes and regulation (not including broken window effects AND inflation), and given the effects of the welfare state splitting up families, how does she know that if it these programs weren't in place that, 1.  She would have a husband, instead of a deadbeat, with a job to support her and her family while she goes of to college?  Or for that matter, how does she know that if she wasn't paying what she is in taxes that she'd even NEED a college degree to get a job instead of just working her way up, or what about private charity?  I mean, really...the list just goes on...)

I'm planning on posting a topic called, "Sociology Insanity" wherein I do something like this, only for my sociology professor.  He was once my psychology professor, and he was what prompted me to post this topic: The State and Mental Illness Patients.
I plan on re-posting what I have in that topic, and expanding on it a bit.

[Travis Retriever]

And even more today.

Prof: "Government intervention into the economy doesn't fail all the time, or even most of the time, just some of the time."
(What's even better are his examples.  Keep in mind he considers himself something of a 'capitalist' republican)

Prof: "For example, when government raises the taxes on cigarettes, causing more people to stop smoking."
(He didn't say it specifically, I don't think, but he also talked of government prohibition of drugs/alcohol/cigarettes as good too.
Because as we all know, prohibition never causes any blow-back, amirite? *Awesomeface*)

Prof: "Or when the government pays some farmers not to grow food, so that the supply doesn't get too high, causing farmers to go backrupt.  That would cause much higher prices."
(Yeah....citation needed bro.)

Prof: "We don't feel the effects of corn ethanol subsidies in the USA."
(Contradicting an earlier statement that it leads to higher corn and food prices...)

Yeah, I'll let those ones speak for themselves.

[Travis Retriever]

OK, I'm feeling too tired to post these ones in color coding, so it will be a bit harder to go through, but I'll try and space it appropriately so it will be easier to digest.

My economics professor likes using appeals to fear in place of reasoned arguments, and probably still thinks he's making valid arguments.
For example: 

• In response to me saying we should pull out of Iraq he retorts, "Well what will happen if we do that before the area stabilizes?"
  
  


• I've already told you his position regarding abolishing social security, and his response about the 'poor old people not being able to spend the money they are not getting causing economic doomsday', which Shane then falsified.
  
  


• A few years ago, before I even became an anarchist, I decided to ask him, "What would happen if ALL government spending--local, state and federal--was zero?"
  He goes on a Economic Apocalypse scenario about, "people who rely on federal aid to go to college not being able to afford it, anyone who gets paid by the government not being able to spend that money, thus the economy goes into a tailspin, poor people in the streets because they don't have welfare," etc etc etc etc etc etc

The first one is total bullshit--we are the ones causing issues with stabilization by invading, occupying, and bombing them.
The last one isn't just an appeal to fear--it's the mother of all broken window fallacies.  Granted, at the time I *did* assume that taxes would still be collected and only used to pay off government debts and unfunded liabilities, but still.

[MrBogosity]

• In response to me saying we should pull out of Iraq he retorts, "Well what will happen if we do that before the area stabilizes?"

When was the area EVER stable?

• A few years ago, before I even became an anarchist, I decided to ask him, "What would happen if ALL government spending--local, state and federal--was zero?"
  He goes on a Economic Apocalypse scenario about, "people who rely on federal aid to go to college not being able to afford it, anyone who gets paid by the government not being able to spend that money, thus the economy goes into a tailspin, poor people in the streets because they don't have welfare," etc etc etc etc etc etc

I think Joseph Spinney handled this one rather well.

[Gumba Masta]

When was the area EVER stable?

Not to mention that much of the current instability is thanks to US interventions in the past thirty or so years.

[Travis Retriever]

It gets weirder...

It seems he's not too good at reporting other things either.
He points out that, "One of the reasons some economists think health-care is so expensive is because of health insurance."
He goes on some incomprehensible bit about the deductibles, and co-pays (even though those are two different insurance types)...
I personally think Shane nailed it in this video from @1:10 to 3:15

[yt]A7z4iHCNHMI[/yt]

Yet I notice that my econ professor doesn't even touch Medicare and Medicaid, or any of the other stuff listed in ANY of Shane's videos on the subject.
Or how the mandating of health-care via the recent bill ("ObamaCare") WILL lead to the costs being even higher than they are now, as explained by both Jacob Spinney and Stefan Molyneux.

[Travis Retriever]

I'm surprised I didn't post the following sooner.  Oh well.  Better late than never, eh?

Prof:  "Consumption is the basis of an economy.  No one with even 2 minutes of economics education can dispute that.  If I buy another one of these [holds up a dry erase marker], someone will produce another.  If I don't, it won't be produced, and someone might lose their job."
(*facepalms*  Keep this one in mind.  I'll fully rebut it after the next, related epic econ fail quote.  I will say that he contradicts himself even more in the next one.)

Prof:  "One person once suggested that everyone could help the economy be being unemployed so they could spend their unemployment checks.  That has got to be the stupidest thing I've ever heard."
(Oh?  You just said 'consumption is the basis of an economy.'  So why does that change now that everyone is consuming?  According to your logic, what the guy suggested is a perfect idea.  Or could it be that, oh, I dunno, that PRODUCTION NOT CONSUMPTION is the basis for an economy.  I mean how pathetically wrong can he be?
In the first one, the only reason he even HAD a dry erase marker to hold in the first place was because it was produced, as he himself implied (whether on purpose or not), not because it was 'consumed'.)

[MrBogosity]

Exactly. Production is dependent on both consumption and investment. You need both. That's why focusing on one (Keynesianism) or the other (trickle-down economics) is idiotic.

[Travis Retriever]

Indeed.

[Travis Retriever]

Why didn't I post this one sooner?  Oh well.  I suppose better late than never.

Prof:  "Get 12 economists in a room and you'll get 14 different opinions--we tend to flip-flop."
(Then by his own admission, economics--what's taught at most universities anyways--is NOT science.  Seriously, I think I've heard an astrologist say something like that quote above in one of Shane's bogosity videos on Astrology.  Seriously, I don't care how scientific they're trying to be--with theories, hypotheses, real world data, etc--if they can't even get it straight between each other, then it isn't science.  And people wonder why Austrian Economists call Keynesianism "voodoo economics".
For the third time, if I wasn't a supporter of the Austrian Method of Praxeology before, you can bet I am now!)