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This is what they think of us…

July 20, 2010
Krakow, Poland

Apparently, all of us little people just need to sit down and keep quiet… so sayeth Kartik Athreya, senior economist for the Federal Reserve Bank of Richmond.

In a recent paper entitled “Economics is Hard. Don’t Let Bloggers Tell You Otherwise,” Mr. Athreya chastised the world of bloggers, talking heads, and anyone else who isn’t named Kartik Athreya for speaking their minds about economic policy.  Clearly, everyone else is too stupid to have an opinion.

“Writers who have not taken a year of PhD coursework in a decent economics department (and passed their PhD qualifying exams), cannot meaningfully advance the discussion on economic policy,” wrote Athreya. “[I]t is exceedingly unlikely that these authors have anything interesting to say about economic policy.”

Yeah, OK, there are a lot of dimwits out there… but this sort of “shut up and do as you’re told” mentality is precisely what is so flawed about the system to begin with.

Let’s be honest, though, this isn’t indigenous just to the United States. The powers that be have been doing this for centuries. Even the Greeks, arguably among the more enlightened of early civilizations, sentenced Socrates to death for asking too many annoying questions.

Over the years, intellectual discourse has bee squashed through fear and coercion,  giving rise to such illustrious events as the Dark Ages and Inquisition. These days, if anyone gets out of hand, they send the cops out in their blackest, most intimidating paramilitary gear… just to send a message.

It should be encouraged to question, to argue… the decisions that these people are making behind the curtain are far too important to be left to faith, especially when they have such a dismal track record.

At some point in the future, perhaps decades from now, I think people will look back with astonishment at this period in history.

They’ll wonder how such a small group of people could become empowered to conjure up trillions of dollars, blow trillions more, bail out their banker buddies, erode the value of people’s savings, wage senseless wars, wreck entire economies through misallocation of resources, and yet ridicule public discourse as ignorant and irrelevant…

In any different context, this would all seem completely insane.

Mr. Athreya could have spared himself and the taxpayers a couple of hours by simply penning his own resignation, rather than criticize those who dare to question the intellectual righteousness of his bosses.

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

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Comments on this entry are closed.

  • thekid

    As I told Dr. Athreya, in a recent post, free markets are not complicated.

    However, manipulated markets have feed back loops that are very difficult to control, over time. The Fed, Wall St, Dept Treasury (aka Plunge Protection Team) and their cohorts in London have so many balls in the air, that the system may be on the edge of numerous calamities much worse than what happened with Lehman in 2008.

    This time, watch for a failure in Silver deliveries on the Comex and LBMA as a possible trigger event. Watch for currencies to have confidence collapse, like dominos.

    Dr. Athreya gives an excellent example of the elitist mentality that is so prevalent in academia, justice, politics, media, military, corporations, finance. They would rather burn the system down then admit to being wrong and risk giving up their positions of power over the “useless eaters”, as Henry Kissinger likes to refer to us.

    Best regards

  • Joe

    His superiors (ha!) must feel threatened to ask this to write such drivel. The good news is that no one really cares what this second stringer actually thinks…the bad news is that this clown leeches off the public payroll. I would love to give him a practical lesson in economics by throwing him out on the street, and asking him to compute the hedonic difference between eating out of the MacDonalds VS the Burger King Dumpster. He could then sell a paper to his former superiors, selling them on another way to reduce the CPI by calculating the reduced cost of living as a result of scavenging for food. Gee, that ought to improve the GNP.

  • Chuck B.

    Good post today Simon.

    I enjoy it when the intellectually superior try to impose theories from texbooks only to get offended when the masses are dumb enough to question their bad decisions in the real world. Heaven forbid they step out from behind their lifetime pensions, tenure and PhD coursework.

    Oops, I forgot my place in society. I apologize for expressing my opinion and questioning authority. I should be keeping my head down, working hard for the corporation, paying my high taxes, getting a big mortgage, juggling large balances on multiple creditcards, having 2.3 kids, financing at least 2 vehicles, buying the latest Apple products, and surrendering my personal rights and responsiblities to the government so I don’t have to worry about anything except cracking open a “cold one” and watching my favorite TV reruns at the end of a hard day. The politicians and academics will take care of us. They know better – just ask the Euro Zone.

  • Ed

    Mr. Athreya is absolutely correct in that it takes a PhD level analysis to comprehend the Keynesian pyramid scheme, in all it’s machinations, that the elitist International Banksters have imposed upon the globe over the past century. But to understand “money” or “banking” in general is simple enough for a first grader to grasp it. That’s the problem that these elitist snobs don’t understand: We the People don’t give a rat’s-rear-end about their Keynesian system or how well they understand it versus the layman, since we’re working feverishly to erase it and it’s dependency upon fractional reserve banking and a fiat money supply from the face of the earth, in order to replace it with the historically honest and fair system based upon gold and silver backed currency. They can take their system and shove it up their overpaid, over-educated backsides. Their laudable understanding of the current criminal system isn’t going to do them a lick of good in a new world order; OUR new world order based upon sound money and individual freedom, that is. I hope they also took a few elective course on how to stock shelves at Walmart during all those years of Keynesian research?

  • bw

    Mr. Arthreya said that writers (bloggers and other rabble) “cannot meaningfully advance the discussion on economic policy”, because he, like those of his ilk, assume, presume, & take for granted, that everyone on every social level has accepted the arrangement that the responsibility for their money and The Economy has been properly put into the hands of Official Economic Policy Makers to create and manage. Official Economic Policy Makers have to know about the intricate, complex, complicated, extensive, deep, and broad elements & determining factors which affect and influence what the results will be that will affect *everyone* within their range of operation. Theirs is a broad matrix of considerations and concerns. They are Gods, the Lords & Masters of Money distribution and balancing mechanisms. They Know what we couldn’t possibly understand, because they have Phds and have achieved efficacy in the discernment of the meaning of tea leaves. How can you doubt?

  • Ilene

    Just wanted to say, good job!

  • Jmerriam

    Mr. Athreya seems to be functioning like some 21st century “Wizard of Oz”. A big voice behind the heavy veil manipulating people, policy and events through trickery, fear, and sleight of hand with our economic “policy”. Some of the dumbest people I know have PhDs, and I was in the field of education for 20 years, so I have seen what kind of damage they do! I was reared by parents who insisted we continually ask questions as that is the best way to learn. My parents produced 4 very intelligent, curious, individuals who think for themselves, and bristle at anyone who thinks we should “just shut up and do as you’re told”. That notion is anathema to a truly civilized and free society. People who do not think, question, and discourse intelligently are sheep. And, as we know from history, sheep are easily lead to the slaughter.

  • P.A. Dursey

    Kaetik Athreya: Intellectual Fraudulence

    It’s clear that Athreya doesn’t understand the nature of knowledge. Nor does he understand that as a “traditional” initiate to the Economics PhD guild, he’s effectively removed himself from legitimate, independent, merit based inquiry and thus producing a independent thought. This is why he feels compelled to make such fallacious pronouncements. The fact that he felt compelled to promote his guild’s position: that they must have a monopoly on knowledge, is evidence of the fallacious basis of his recent writings, this is classic cultist psychosis. Monopoly and truth are by definition mutually exclusive. This position, like any form of monopoly springs from an amalgam of the basest motives: peer sanction, group think and force. That the original role of colleges and universities was to produce religious leaders, makes clear the source of profligate demagoguery regurgitated by Athreya.

    The one legitimate path to the PhD degree, is honest work, independent thought, achievement and is granted honorarily.

    Heraclitus said this of Pythagoras, the founder of the Pythagorean cult of scholarship: “…practiced inquiry more than other man, and selecting from these writings he made a wisdom of his own – much learning, mere fraudulence.” And further that “much learning does not teach thought.” These truths are as relevant now as they where when they were written more than 2500 years ago; as are the essential natures of both knowledge and men.

    Athreya and those like him have no intimacy with knowledge, truth and wisdom and instead become consumed with managing appearances and conjuring illusions solely to impress the unthinking mob. A sad and dark existence indeed.

  • DavidEvans

    Simon, you are right on with your statements and analogy. I am an executive caught in the perplexing situation we have allowed ourselves to be in, in the USA and the world. Very simply, years ago I founded and operated as the president and CEO, an engineering and CM services firm, serving the industrial manufacturing community in the United States of America. In those days and is now multiplied exponentially, is the need to have certifications for everything including going to the bathroom; an MBA is now required to do almost anything, issued by dimwitted, self-important socialistic universities professors, insulated in their house of theories and actually never do or make anything but Regurgatate; we support them and their arrogance. This happened because of marketing advantage in general and attached itself to the cuff of local, state and federal government regulations, unions and on and on. It was all working well and the marketers were very happy with themselves until one day they were not attached to the cuff any longer, they were first in the cuff and at this point the cuff or the government regulatory entities, however you want to describe it, is the master of all. Freedom has been replaced with the requirement to belong to some organization to be able to make a living and that, some organization is now attached to political correctness dictated by the government. It is not hard to understand why we have no “new stuff” because original thought is not only discouraged it is not financeable.

    Absolutely nothing is learned from history, especially since we do not teach it in the context of reality but in the context of progressive liberalism; the rot in the apple of the world. Unfortunately, I believe we will have to endure the downward curve of the present human cycle until at what point we can start establishing new and forward. People are worried about making their inflated house, car and other payments when the real truth is the economy is feeding on itself, consuming the little, honest, good natured people; the masses. There will come a time and it is upon us, that human survival will take precedence in daily life. The people of the United States of America, for generations, have been gullible to the point of actually believing by some means they will be taken care of even if they have no contribution whatsoever.

    David Evans

  • scott

    Didn’t Ken Lay make the same argument?

  • passerby

    right you are! check out the video on they re setting up a bring-your-own-table protest for the 6th sept! maybe people are starting to see what’s happening, waking up from the lethargy they’ve been in all this time..

  • lf

    There is no doubt that Mr Athreya is a total moron despite his Ph D.
    The problem with the posting like yours (and the same line of thought is present and clear in some of the writings of Doug Casey crowd) that it opens the opportunity for demonization the science and Academia in general as one can see from some of the comments over here. It is an absurd to deny the role of science
    in the progress of civilization in 21 st century. And though Economics is not exact science (as even Big Ben readily admits),
    the demonization of it is at least as stupid as the cited article of Mr Athreya. Thus, unlike other posters, I will restrain from Kudos to this particular letter of yours.

    • bw

      I think the criticism is against those who play a role in setting economic *policy* vs those who would study Economics per se.

      Many of the Casey crowd would be familiar with, have studied, and agree with, von Mises, Hayek, et al. But those who deal with “economic policy” are in positions related to government, governing over our monetary activities, and thus invite this sort of criticism regarding their exclusivity – when if they imply that only the extremely educated are qualified, and therefore deserving of, being heard on how (other people’s) monetary activities are to be managed.

  • thekid

    The reason this is so prevalent in academia is because education has long been co-oped by the house of Rockefeller, in order to program minds and to fill posts in business, government, media, etc.

    It is no small matter that this is the prevailing mindset of a private company, who has been given the power to create currency for the largest economy on the planet.

  • Arbinvestor

    Maybe we should all shut up and just listen to nobel laureates in economics… like…er…..Myron Scholes and Robert Merton!!! I mean why just stop at a PhD.

  • bw

    I just read the paper from Mr. Athreya. He makes this comment at the end:

    “…my hope is that the broader public will ask for a slightly higher bar when it comes to economics, rather than self-selecting into blogs that merely confirm half-baked views that might have been acquired from elsewhere. And I hope that non-economists who write about economics start routinely to do so in a way that references and discusses the _premises_ that lead to particular conclusions about a given issue. Economics is full of this sort of “if-then” knowledge, which, if communicated well, could significantly sharpen the public discussion.”

    Sharpening the public discussion is acceptable. Especially about premises. And raising the bar.

  • john

    This is a refreshing experience in reason & truth.
    Einstein said, “The definition of insanity is doing the same thing over and over and expecting different results”.
    My thanks to all who contribute on this site and especially to Mr. Evans & Merriam’s comments.
    ” I never let my education interfere with my learning”. Mark Twain

  • Chengdu Express

    I would be interested in Kartik Athreya’s criticisms if he tackled a specific economic issue, rather than attacking those who express opinions. And he doesn’t come across very well by playing the superior qualifications card. He wants PhDs from decent universities. His PhD is from Iowa–not a name I associate with historic moments in economics. He has taught at Virginia, a university whose main claim to fame is its high graduation rate. Wonderful, everybody passes, and presumably they can then blog on economics sans personal attacks by their former prof. He argues against public commentary on economic issues by using the analogy that bloggers wouldn’t feel qualified to express their opinions about medical research. Two points here. One: medical research has made tremendous progress; economics, as taught in universities, has largely proved a waste of time. Two: everyone’s daily life may not be directly affected by cancer research, but it is affected by economics. How foolish to deny Everyman his voice on economic issues. And Kartik Athreya should never forget that he studied and taught at taxpayer funded institutions. If he were wise, he would listen to the people who pay him. But, he’s an economist.

  • Ezra Pound

    What’s amazing is that Mr. Athreya believes we should all accept at face-value the economic/monetary decisions of The Fed, a cartel of private banks.

    Barry C. Lynn has a fascinating book, The New Monopoly Capitalism and the Economics of Destruction — a thoroughly discomforting, but very important and eye-opening read.

    Lynn concludes that we have nothing resembling a “free market” in America (or even in most countries across the globe) anymore. We have a centrally-planned market controlled and dominated almost entirely by government-set industrial policy and rapacious Wall Street bankers who have successfully created an entire economy consisting of little more than Wal-Mart-like mega-monopolies and the millions of low-paying service jobs that go along with them.

    Wall Street banks have both 1) successfully pushed the most toxic and wasteful brand of consumerism and debt on the world’s citizens ever imaginable while 2) successfully choking off entrepreneurship and small business – in other words, any competitive threat to the mega-monopolies they finance.

    What we have essentially created is a monster: An entire economy dominated by monopolies that are ALL “too big to fail.” The reason Ford CEO Alan Mulally testified before Congress pleading for a government bailout of GM is because surprisingly there is now only one company that supplies virtually all of the auto parts to all of the big 3 automakers. Wall Street has completely engineered any redundancy (i.e competition) out of our economic system.

    The consequence? If GM were allowed to fail, it would have created a chain-reaction that would have taken down all of the U.S. automakers – GM’s failure would cause the one auto parts supplier to the entire industry to fail, and when that happened, they would all collapse like a house of cards. This is repeated over and over throughout our economy: finance, food distribution, banking, technology…

    With an entire economy that is TBTF, the costs of stupid business decisions are no longer borne by the business itself, those costs have to be “socialized” – that is we, the taxpayers, get stuck with the bill. This suits Wall Street and the monopolies perfectly of course… Choke off all competition, relentlessly squeeze suppliers to perpetually lower their costs (the “Wal-Martization” of the economy), then “socialize” the costs of failure. That is Socialism.

    Worse, Wall Street has consciously created a false dichotomy in our political choices: The Democratic Party is captive to the neo-progressive wing that on the one hand pushes this toxic Naderite consumerist notion that everything should be about “always lower prices” while on the other pushes ever more government regulation on businesses (note, it’s not the mega-monopolies that get hurt by the way… They have the scale – with their armies of lawyers and lobbyists to write the rules to their liking and exploit the loopholes). It’s the small businesses and entrepreneurs – potential competitors to the monopolies Wall Street bank-rolls who get screwed.

    Republicans are no better… They are typically neo-feudalists whose clarion call is “free markets”, notwithstanding the fact that most have no idea what the phrase even means. They excuse virtually anything the financiers and the monopolists do as part of a “free market”. Business can be as rapacious as it wants, use government rules and regulations to destroy competitors, bankrupt entire countries, step on the throats of small businesses and entrepreneurs, outsource and offshore our entire manufacturing capacity, etc. etc. because that’s a “free market.” They conveniently forget about the “creative destruction” part….

    Thus, both political parties push outcomes that perfectly serve Wall Street’s interests, but no one else’s. It’s diabolically brilliant. Pit two political parties against each other fighting to the death over policy outcomes – either of which perfectly suits Wall Street’s interests. Heads I win, tails you lose…

    But people are starting to wake up… There’s a hugely important new strain in politics right now that I predict will explode… The right-leaning “producerists” or paleo-cons (Lou Dobbs, the Birchers, Buchanan, Ron Paul, Alex Jones) and the left-leaning anti-globalists/anti-monopolists (G-20 protestors, “buy local” movements, anti-genetically-modified-food movements, etc.) are rejecting both the false choice of neo-feudalism on the right and neo-progressivism on the left.

    They have far more in common with each other than they yet realize. They’ve concluded that our political battles are false choices: Both parties are simply handmaidens for Wall Street.

    This seething anger is coming from both sides of the political spectrum, and largely for the same underlying reasons… The pot-smoking Berkeley hippy and the home-schooling Christian fundamentalist have more in common with each other than they realize. Both for instance are completely freaked out by our growing American police state… Neither sees any of our core institutions serving their interests – finance, business, government.

    At the moment this burgeoning movement is chaotic, it’s messy, it’s disjointed. It’s also reactionary and sometimes overly conspiratorial… But that’s only because it’s new. It will find its rhythm and equilibrium… And the existing paradigm ignores it at its peril. The fringe isn’t so fringy anymore. And that provides hope.

  • Jlloydkirk

    Perhaps this a rhetorical question, but why do you think Keynesian Economics is so widely taught in universities and supported by economists these days? I always thought it was a defunct theory. One can go back 10, 20 years and see that other nations tried to manipulate the economy with massive stimulus packages and miserably failed. Japan in the 1990s for example.

    • Joe

      True on Keynesian part, I wonder the same thing. Today’s U.S. government is on Keynesian plan. I believe U.S. economy is self-explantation that Keynesian model failed. I was hoping to some point that U.S. Government will give Milton Friedman’s plan a shot.

    • Jgrimsl1

      Because employing the Keynesian theory allows those with power to get more power. It allows the government to funnel money to specific groups under the guise of “economic stimulus that will help us all” and determine who stays and who goes. In essence it gives them an excuse to steal our money and control our lives.

      • Vince Daliessio

        Exactly – Keynes himself was not an economist, but a mathematician, and his Theory took off not because it had probative value, but because it allowed politicians cover to do as they wished.

  • Bill Goode

    Mr. Kartik Athreya’s article is of course complete utter nonsense. Economics is actually not difficult at all to understand. Anyone who can balance a checkbook can do just fine with economics. The subject of economics is one of those subjects (recently along with healthcare) which the government makes to appear complex in order to justify their multitude of programs, massive tax structure and 90% of their existence.

    Who needs Kartik Athreya to be at his job? Certainly not the American citizenry. But I’m the complex structure of the Federal Reserve needs him there to justify the rest of their existence.

    • Pater Suspiriorum

      In fact, economics is way too important to leave it to professional economists. The modern caste of professional economists is largely in the employ of the State (no-one else would need them and give them a job) and an intellectually barren, mediocre caste it is. They are either Keyenesians or Monetarists (Keynesians-in-Drag), who believe the economy is some kind of machine, and if only they pull the right levers, it will ‘obey’. They have dismissed the subjectivitst revolution of Austrian economics because it does not contain enough mathematics and neat formulas – as if a social science could advance with the help of formulas! However, the main reason they have dismissed it is because it is a branch of economics that reveals the State for what it is. Natural sciences can be left to those specializing in them, but economics is a deeply political topic. Mr. Athreya surely knows that if not for the State for which he can spin propaganda, he would have no job – he would have to go out into the market place and produce something consumers actually WANT. 90% of our so-called ‘intellectuals’ are in similar positions. They dare not bite the hand that feeds them, and thus prefer mediocrity and propaganda over original thought and truth.
      Oh, and just in case you wonder, i have studied economics, so i know what these people are taught. It is basically a load of rubbish, from a scientific standpoint.

    • Jay

      You make perfect sense.What doesn’t is when Harvard students turn down offers to buy 1 Oz Silver Rounds for $5.
      Some education is ………

      • blindbear

        Aw, come on guy. Those women who were doing the movie you’re referring to were approaching folks in Harvard Square, flashing open an overcoat to show silver coins displayed like a street huckster selling knock-off watches, and trying to sound like a street huckster. Anybody who gave them any credence would be an absolute idiot.

  • Lebop

    Mr. Kartik Athreya does not understand that there are two higher degrees than a Phd that are never awarded by universities simply because they are not and cannot be taught in college. They are Common Sense (taught by experience) and Wisdom (taught by age). I doubt that Mr. Athreya has ever recieved either of these or ever will.

  • Hopsngrain

    Enough with the Inquisition and Dark Ages allusions! There’s no age so dark as the still with us Forced-to-be-Free Enlightment. In the secular democracies of Europe, you get tossed in the hoosegow for raising perfectly reasonable questions about what the “good guys” and “bad guys” did during World War II. In the United States, you get tossed in the hoosegow for putting certain plant and synthetic products into your own body. Killing in the name of the great god Democracy is an improvement over killing in the name of the great god God? Enough with the self-congratulation already!

  • R.P. Churchill

    Mises wrote books like “Theory of Money and Credit” in 1914 and “Socialism” in 1920 that sound like they are describing conditions ripped from today’s headlines. He says if you do X, then Y will happen. We’ve spent 100 years doing X, and now we have Y, and it’s been known, understood, and predicted all along. Almost anyone can understand works like these, and calculus and all kinds of wild formulae only serve to obscure the issue, which is of course the point (and because soft social ‘scientists’ like economists are jealous of real scientists with their expensive equipment and complicated formulae that actually explain and predict things accurately). If Mr. Athreya is suggestion that we’re all too dumb to do calculus (I can, pal!), then it’s fair game for me to ask him if he knows how to read.

    The answer seems not.

  • Oooooo

    the last four paragraphs say’s it all

  • Qaoss

    Being one of those that did 3 years of the Ph.D. program in economics I can tell you w/o regret: it’s bullshit. I remember in my second year thinking: what the hell is all this crap? Mathematical models to describe human decision making? Assumptions that would only be valid on a planet far, far away. It was clear I had learned everything I needed to know about economics in ECO 101 and 102 and maybe my Money and Banking course. Ron Paul never studied economics at university and he understands it very well.

  • Ed Scott

    There’s a saying: The economy is acceptable to the econmist(s)
    that still are employed. The rest of us Plebians really don’t ccount!!!!!

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