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August, 2017 
FUTURECASTS JOURNAL
The Gods of Economics are Greek
Astrological Evaluation of Economic Policy
Examining the omens: 
The gods of physics are
undoubtedly mathematicians. Enlightenment in the world of physics generally
comes through mathematics. 
They are prone to imprecision and even inconsistency. 
However, the gods of economics are
Greek. They are immortal and powerful, but like humans they are prone to passions,
conflicts, insubordination and other foibles  like imprecision and even
inconsistency. 
Mathematical economists are the astrologers of economic
markets. They are blind to
fundamental realities. They can calculate outcomes to nine decimal places, but they will never tell you
why their calculations are wrong. They examine their
mathematical models like ancient priests examining the entrails of a pig, and
pronounce on the omens they see therein for various policies. 

Calculations based on opaque aggregates
like GDP and national investment levels reveal as little about economic basics as the
appearance of Mars within certain constellations reveals about the fundamentals
of astronomy. 
Mathematical economists are prone to
the ordinary human passions and weaknesses, just like other professionals.
They may be influenced by bias based on political or ideological beliefs or
personal interest or theoretical weaknesses. Some advocacy economists
willingly check their brains at the door and substitute propaganda myth for
analysis. With the most modest of tweaks, they can make their mathematical
models sit up and spit nickels. They pretend mathematical rigor, but their
gods are Greek. 

Models are misspecified and require judgment at every analytical step. Erroneous emphasis and a multitude of inaccurate assumptions may undermine calculations. Data errors, unexpected "shocks," and the static modeling of dynamic economic systems routinely afflict mathematical analyses. They thus routinely miss major economic changes.
Instead of mathematical rigor, economic mathematical models are afflicted with rigor mortis. 
Manifold limitations of mathematical forms of analysis undermine macroeconomic analysis. Major economic changes are thus routinely missed.
Both astrology and economic mathematical models
present explanations divorced from the living reality. The systems described are dead.
Instead of being enhanced by mathematical rigor, economic mathematical models are afflicted with rigor
mortis. 
Piketty 
A prime recent example is Piketty's
mathematical explanation for the increase in and prospects for inequality.
See, Piketty, Capital in Twenty First
Century. 
Increasing concentration of wealth, according to
Piketty, involves the relationship of growth and the return on capital. If
growth is slow  0% to .5%  as it was in agrarian societies, and capital yields
typically 4% to 5%, then wealth will accumulate from generation to generation.
There will be an "inheritance society."

Even as broad approximations, Piketty's opaque aggregates are mugged by the historic facts. 
The economic characteristics and trends involved in
Piketty's analysis are broad enough to survive statistical
imprecision. That economic inequality was extraordinary before WWI, declined
substantially during the period of the great wars and depression, and has since
considerably recovered is simply beyond question. However, even as broad
approximations, his opaque aggregates are mugged by the historic facts. 
The problems with opaque aggregates:
There is the dead professionally managed capital that Piketty stupidly thinks will conquer the financial world, and live successfully managed entrepreneurial capital that in every generation will leave the dead capital behind in the dust in any reasonably free and competitive market. 
The aggregate for "capital" is obviously too
broad and opaque to be meaningful. There are a multitude of devils in the
details. The GDP calculation has always been of dubious accuracy. For
today's increasingly complex economy, it is a work of fiction 
Mathematics as a Propaganda Ploy.
Enmeshed in the mathematics propaganda ploy: 
Economics and sociology have become
increasingly dependent on mathematical forms of analysis. Unfortunately, these
efforts are rendered ludicrous by the impossibility of accurately
measuring or calculating some of the most important of the pertinent outcome determinative
variables. ? 
?
The inherent ineptness of government management is always determinedly ignored or ridiculously denied.
The effort to measure aggregates that can't be measured interferes with the essential task of professional evaluation.
It is soon most of the middle class that become government dependents. 
Efforts to turn nonscientific practical arts into "sciences" for propaganda purposes of enhanced professional prestige and credibility began in the 19th century and, unfortunately, will continue unabated into the 21st century.
Deceptions, intentional or unwitting, by economists
and sociologists engaged in the intellectual discourse on public policy
will remain a major problem as long as these fields continue to reduce professional analysis to mathematical calculation
with no semblance of validity. In subsidized fields like health care and university education,
academics and medical providers and their rapidly multiplying
administrative personnel gleefully absorb all the government money provided and then
scream for more. The goldplating of facilities arises as if by some
inescapable natural law. 
Indeed, aggregate economic models have proven
so unreliable that not even the economists who work with them will vouch
for their accuracy any more. See, Hendry and Ericsson, "Understanding
Economic Forecasts." 

Mathematical economics is presented like a secular religion that must be accepted as a matter of faith.
Anything that cannot be expressed as an equation is ignored, efforts are made to measure the immeasurable and calculate the incalculable, and evaluations are often based on phony "body count" benchmarks and indexes.
The efforts to enhance professional prestige by the deceptions of the "science" propaganda ploy have proven to be far from harmless. 
The ability to predict outcomes is the
ultimate test of theory. However, published predictions and
expectations have failed so miserably so
often that
many modern economists are now reduced to the ludicrous assertion that
economic theory should not be judged on the basis of its ability to
predict outcomes. Economic theory is somehow different and must be
accepted as valid even if it never successfully predicts anything. It is
thus presented like a secular religion that must be accepted as a matter of faith. 
Some of the most influential economists
have reduced themselves to mere technicians who uncritically apply
mathematical forms of economic analysis and maintain a false pretense of
scientific "rigor." They serve as propagandists. The electorate pays
them well to mislead the electorate. 
