It is Obvious

Chris Rick has got altogether too much to say

I wonder

Posted by chrisrick13 on January 2, 2014

It is obvious: I told you so

I remember reading about astronomers in the distant past having the earth at the centre of…everything.  They would draw up their charts for celestial motion based on observations.  Then a while later their new observations required charts of more complexity to keep the earth as the rotation point.  I can’t remember the academic journey to the sun being the centre but it was bound up in a lot of theology and pain.  I’m sure that whatever was happening in public there were plenty of ‘heretics’ who tried putting the sun at the centre and got nice simple charts.

There are many similarities to today in economics.  There are many theories about what is happening and what to do to run national economies.  However there seems to be changes in response to observed events to make the theories fit.  They get ever more convoluted.  Alas there is no simple sun-in-the-middle solution.  There are plenty of ‘heretics’ around who are putting out much more realistic analyses of what is happening and the likely course of events.

I have to mention Keynes about whose work I know little.  He and other great names were operating at a time when GDP was sitting in the middle of the very flat part of an exponential curve.  Consumption of resources was in the same place.  This meant available resources were essentially infinite as was the ability to grow economies.  The observations and their theories that explained them were, to continue the analogy, of another solar system.

Today we run national economies based on theories that applied in another place – physically the same but separated in time, sitting on the steep part of the exponential curve.  There is a simple answer: assume no growth.  Until we do that we will have more and more complex celestial charts covered up by more and more obfuscated statistics from government, central bankers, and those with vested interests.

It is obvious: I told you so is not something I want ever to say

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