From an anonymous poster on another blog. Thought it was slightly relevant.
I did an economics degree and very quickly learned that what they told you in school is not what plays out in real life. I think it took about 3mths of working in the financial markets to realise that the incy bit they covered about market sentiment and ‘irrational exuberance’ (wasn’t called that then) is really what drives most of the day to day trading and also some of the longer term plays. I’d go along to talks given by bank economists about what was to happen next and think I didn’t really get it, but now, as a much more mature person, I realise that my questioning (internally) was not wrong. Whilst I’ve always been a bit of a cynical person and often questioned many of life’s accepted norms, it did take me quite a long time to properly put that education behind me and discard the fundamentals that I had been taught.
I think that many people that study economics are pretty conservative types and challenging what has been taught, and accepted, is a real break from their natural thought patterns. Consequently, they hang on to the theories, despite evidence to the contrary. That plays very well into the hands of politicians and leading bankers who seek to exploit an economic theory that supports their own actions.
Coming back to economics very many years down the track has been very interesting for me, and has confirmed many things I thought as a young graduate. I get a huge amount out of reading the bloggers who have a completely different perspective on economics. They are so much more focussed on the reality and not so much on the theory, and that sits well with my thoughts. They think in common sense terms, and I believe this is where economic thought has gone so terribly wrong.
Economics theory is soon to undergo a complete reversal in thought but it will take an undeniable collapse to bring that about
