The importance of trust in economic data

Here is the bigger problem:

1. Our FED has never been an expert on judging the health of the national economy. We remember the spring of 2008 when the FED unequivocally stated that the national economy was sound only for it to go bust four months later in August 2008. So much for FED's "independence."

2. It was the same on Friday when Chairman Powell spoke at the Jackson Hole Symposium on Economic Policy at Jackson Hole in Wyoming. It was a lot of "we believe," such as "our 2% inflation target is correct,"
and much less of "we know" and a lot of "on the one hand and on the other hand." This is why president Truman wished for a one-handed economist.

3. You may be surprised to hear that the 2% inflation target, set up by our FED and emulated by the central banks world over, is NOT the result of any scientific economic study but it was pulled out of the thin air. As such, the inflation target could have been 3% or 1% just as well. The positive inflation target merely protects us against the dreaded deflation whereby the prices start dropping uncontrollably, the producers and the retailers are unable to recover their costs and a wave of bankruptcies ensues (yet, some people even on this forum advocate a zero % inflation target).

Fire away.

" As such, the inflation target could have been 3% or 1% just as well. The positive inflation target merely protects us against the dreaded deflation whereby the prices start dropping uncontrollably, the producers and the retailers are unable to recover their costs and a wave of bankruptcies ensues (yet, some people even on this forum advocate a zero % inflation target)."

I basically agree with this observation. Globally it's become this over-managed controlling of the macro economies of all countries, to the point that it doesn't leave any real room for the natural inhaling and exhaling of economies, and this over-management has been going on for the last three plus generations. From where I sit, the micro management of forecasted inflation rates is not any real solution. It's a form of adding bandaids ontop of bandaids. Said another way, it promotes kicking the can to real financial solutions and ultimately overall economic health, down the road, generation after generation. Every human created system has to be allowed fail from time to time, (inhaling/exhaling), and I'm left to wonder: If we would change our view of trying to micro manage economic health, to also allow the economy to periodically tank, if by now, we would be seeing more natural economic rhythms, with shallower down turns and more healthy and stable upturns. I think all of the concerns posted here a valid and noteworthy, but it's still the same old debates - This president or that Fed Chair, or some other politico is to blame, but I would argue it's the way we actually try to manipulate the natural and inevitable inflations and deflations of the markets that is the real issue, or let's say, it's where the real issues lay.

Re: "I think all of the concerns posted here a valid and noteworthy, but it's still the same old debates - This president or that Fed Chair, or some other politico is to blame, but I would argue it's the way we actually try to manipulate the natural and inevitable inflations and deflations of the markets that is the real issue, or let's say, it's where the real issues lay."

Communists told us in the socialist countries that they eliminated the cyclical capitalism. Yet, they did it at the expense of all of us remaining poor for decades and in the end caused the demise of communism in the Eastern Europe for this very reason, in addition, of course, to limiting personal liberties to achieve the goals of socialism.

Our capitalist economy of the free enterprise is by definition cyclical. It will overheat and slow down some day only to revive to new heights.

What I find positively ridiculous is that our "experts" living and working in the strongest economy of the world and enjoying the standard of living never seen on Earth before for the common man, are constantly talking about a recession being just being around the corner and alleging that Americans are "struggling." This happens to those who have a very unclear understanding of economics and have no means of comparing as they have never been farther than Middletown. EXAMPLE: The "economic model" of Bloomberg News forecasted the recession for November 2022 with the probability of 100% (a scientific impossibility as there is no forecasting with 100% probability for the reasons of mathematical statistics too extensive to discuss here).

Here is the problem: It is not that we make errors. The problem is that the economics (and politics for that matter) is frequently discussed as the "on the one hand and on the other hand" as if there is no truth and there is no scientific data to base our "opinions" on. That of course brings the issue of (unfounded) opinions vs. facts based on data.

Thus, we seem to be living in soft of a meta reality where the opposing views are equally valid while in real reality two diametrically different "opinions" cannot be both true and correct.

The example is Dr. Fauci when he was criticized by president Trump for changing his opinions frequently.
Dr. Fauci replied: "When "new" facts become available, one has to be flexible enough to change his opinion." This is a typical fault in the medical field. As if the "new" findings could be equally valid as the "old" findings while one or the other must be bad science. Witness the fat in human food that was allegedly plugging the arteries, a nonsense that is now universally rejected by the medical field. Why? It was based on a single study of 50 subjects that did not yield statistically significant results to confirm the hypothesis.

Similarly, the two percent inflation target is not the result of any scientific economics study. This why Powell said at Jackson Hole "we believe the 2.0% inflation target is correct." If you ask him why it could not be 1.0% or 3.0% he would not know. The only thing we know is that positive inflation protects us against the dreaded deflation.

In summary, if you are an "expert" you cannot give advice of the type "I believe" but "I know because I made a scientific study of the issue." Errors by journalists? Journos are not "experts" on anything but believe they can talk about everything. They have neither experience nor requisite education. You can get a doctorate in "journalism" these days by studying courses such as "Internet and You" and "How To Understand Science."

And so it goes......

If you look hard enough, you will find it in any doctoral program on "journalism." What else would they teach them? How to write? Then again they do that too. "Journalism" was never an academic program until fairly recently. They just sent a reporter on the beat and he wrote a story. Now it becomes an academic discipline.

The whole problem here is that people like that, professors and students, believe that economics and politics are just a matter of discussion and "on the one hand and on the other hand," the facts and hard (scientific) data be damned. That way, anybody can call himself an "expert" as he does not have to know anything as the political proclivities and an outright political bias becomes the guiding light.

This is where "I think" or "I believe" instead of "I know because I studied the issue and I have the data and the facts to support this" come into play.

Look at the minutes of the FOMC. They "discuss" how they "feel" about the reality and "believe" that the 2.0% inflation target is "right." (They pulled it out of the thin air as it is NOT the result of any scientific economic study. The only thing we know is that the 2.0% inflation protects us against the dreaded deflation.) And the know-nothing traders are fixated on their every word these people utter not knowing that nearly every word is pulled out of the thin air. And they have "dissent." Which means that roughly half must be wrong.

How else would we hear from the FED in the Spring of 2008 that the national economy was sound only to go bust the following August? Economics and by extension politics is not largely a matter of uniformed opinion and a political bias. Take the tariffs and the "opinion" prevailing among certain "experts" that "Trump wants to destroy the American economy by tariffs and the American consumers will pay for it," the six months of economic data be damned. This is what I mean.

And journalists who are once removed due to lack of education and experience in these matters are even a bigger problem. And those TV talking heads and the pundits, whose income depends on the advertising revenue that in turn depends on the number of viewers issue alarming news just to keep the listeners at the edge of their seat and keep listening.

Example - Columbia University, an Ivy League School:

Columbia University in the City of New York
Columbia University in the City of New York logo
Ranked as: #18 in Best National University
Tuition: $51,194 per year
Total Cost: $102,388 *
State: New York
Acceptance: 6.66%
The following list of courses is subject to change.

J6030 Journalism and Society. A seminar surveying the history and the social, political, technological and cultural impact of journalism and the news media from the birth of the newspaper forward. Required of Communications Ph.D. students.

Doctoral program at University of Texas at Austin:

Doctoral Program
Our doctoral program is among the best programs in journalism and media in the U.S. Led by faculty with distinguished research and publication records – many with professional journalism or media experience – our program is designed to equip students with a strong theoretical grounding and versatile research methods. Graduates of our four-year program can go on to positions in the academy, and they also may join think tanks, advocacy and non-governmental organizations and professional associations working with information and media systems.

Journalism Graduate Admissions

Deadlines
Fall Admission Only
Application OpensSeptember 1
Application DeadlineDecember 1
MyStatus
01.30.2024eli-reed069.jpeg
Doctoral Research
We offer a far-reaching array of electives and research opportunities. Our program incorporates many opportunities to undertake research independently or to work with groups associated with research centers, institutes or research groups.

Learn More
The faculties’ field of interest broadly include:

Journalism Studies
Global Journalism/Latin America/Mexico
Emerging Technologies & Innovation
Media, Civic and Political Life
We have a strong track record of participation in major professional associations, including the Association for Education in Journalism and Mass Communication (AEJMC), the International Communication Association (ICA), the International Association for Media and Communication Research (IAMCR), the Association of Internet Researchers (AoIR), as well as more specialized forums like The Research Conference on Communications, Information, and Internet Policy.

What was the last time a CEO said when they had a problem: "I wish we would have a journalism or communications major to help us to resolve this problem!"

Capish? Respectfully, I am out of here as this discussion does not lead anywhere.

In similar departments in civilized countries it is a reasonably easy to have a number (often two) of staff to separately and independently be responsible for validating the numbers that are collated. They may just be boffins - don't need to be senior.

This kind of arrangement is quite common in a wide variety of matters, for two reasons. I can't believe that the BLS doesn't have this practice.

Or did Trump just shoot the messenger? I don't understand.

There is truth in this. There is nothing wrong, and everything right, in having natural recessions from time to time. They clean out a variety of distortions which accumulate, for example.

A couple things, and this precis will do no justice.

The functioning of a free market is aided by necessary regulatory and adjustment mechanisms. Even Adam Smith recognised that. Keynes formalised things on the fiscal side.

However, it is pretty obvious that these adjustments are historically poorly executed. Some, like Milton Friedman, suggested that adjustments do the exact opposite of what they intend - expand in good times and contract in bad times (Friedman's classic example was the 1930's depression and what led to it).

A current example is Trumps big beautiful bill. Expansionary, inflationary. Awaiting imminent GDP numbers, but they will probably not be negative. There is no reason for a fiscal deficit in an expanding economy. Zero. Zilch.

Small matter of about a trilllion dollar cost to service US Treasury debt, but I'll ignore that elephant in the room.

Please provide the details of the university that provides a PhD in Journalism by studying "Internet and You" and "How to understand Science".

Or, are they some undergraduate subjects prior to undertaking a PhD? Where are these undergard subjects offered?

Yep, thanks for all that. I have thoughts. I will abstain because I have no time for heterodox pseudo thought bubbles, so what's the point.

PhD program - Florida State.

Nope. Couldn't find it. Try again, with links.

President Trump's apparent campaign to reshape the Federal Reserve—from nominating loyalists to reportedly pressuring Lisa Cook to resign—represents a direct threat to one of America's most crucial institutions. Make no mistake: the Fed's independence is not a mere tradition but the cornerstone of global confidence in our financial markets. Should this independence be compromised, the consequences would be swift and severe—international investors could retreat from U.S. Treasuries, triggering a crisis of confidence that might take decades to rebuild. This troubling pattern extends beyond monetary policy, as evidenced by Trump's replacement of the Bureau of Labor Statistics head following his criticism of employment data. Even without explicit data manipulation, these actions send a dangerous signal to markets worldwide. The stability of our entire economic system depends on maintaining these firewalls between political pressure and independent financial governance.

WAFI. As though agencies could be error free. As though media reports could be error free. Makes me question this poster's bias.