Wednesday, December 9, 2009

Economic Populist = Economic Idiots

Economic Populist has an article up titled Bonddad v. Bonddad. Here are the points where they are wrong.

1.) Economists use charts to present data. That's because economists base their analysis on numbers. Graphs depict this data in an easy to understand form. A simple perusal of any economics text illustrates this point. To argue that using graphs is bad economics is the logical equivalent of saying, "Get the government out of my Medicare."

2.) Analyzing graphs of data is not "technical analysis." Technical analysis is the analysis of price charts for trading purposes. Again -- this is a rudimentary economic point. To not know the difference is another freshman mistake -- almost as bad as arguing an economist shouldn't use charts to ... oh wait -- he already did that.

3.) I still do plenty of fundamental analysis. Simply go back through all the postings and you'll I cover most major economic releases.

4.) I use to write a great deal about the amount of debt in the US economy. Then came the deflationary scare of 2008. For those of you who don't know history, this is what led to the Great Depression. To not use massive amounts of debt at the end of last year and this year would have resulted in a Great Depression II. I explained the logic in this article titled, Why the Stimulus is Needed. And I explained my new rationale about national debt in Can We Afford All This Spending. Here was the conclusion:

So -- the overall conclusion is we're going to be pushing the envelope of US finances which is never good. Overall debt/GDP will most surely be at 100% by the end of fiscal 2012. In addition, the interest component of the federal budget will surely increase as well. Now -- is this development fatal? No. But are we adding more stress to the system? Yes. But finally, do we have a choice? That is, is there another viable option right now? No. Fiscal conservatives (who by the way don't exist in the Republcan party's policy implementation arm) will argue to do nothing. But given the precarious nature of the economy right now that is still a recipe for economic suicide.

Let's look at the basic problems. First, EP doesn't know basic economic presentation methods and terminology. This is not a debate about the difference between two economists -- it's about how they don't know the basics of economics. In addition, a simple search of my work would have revealed why I changed my position about public debt. And that goes to the second issue -- they don't do their research. That makes all of their writing suspect at best. And in reality, it makes it all meaningless scribes of intellectual illiterates.

Economic Populist is angry because I called them and others out in an article titled Why Hysteria and Economic Blogs Are Best Friends. Economic Populist didn't like being told they are fitting facts to ideology. In actuality, that is all they have because arguing economists shouldn't use graphs and not knowing what technical analysis is indicates economic populist doesn't know anything about economics.