GordonUnleashed

Quote of the Day

September 19th, 2007 by Steve

From a transcript of Alan Greenspan on The Daily Show with Jon Stewart:

I was telling my colleagues the other day… I’d been dealing with these big mathematical models for forecasting the economy, and I’m looking at what’s going on the last few weeks and I say, “Y’know, if I could figure out a way to determine whether or not people are more fearful, or changing to euphoric… I don’t need any of this other stuff. I could forecast the economy better than any way I know. The trouble is, we can’t figure that out. I’ve been in the forecasting business for 50 years, and I’m no better than I ever was, and nobody else is either.”

Posted in National Politics, Libertarian Movement

2 Responses to “Quote of the Day”

1. GordonUnleashed » Blog Archive » Quote of the Day Part II wrote on 09/19/07 at 3:07 pm :

   […] looks like there may need to be two quotes of the day for today.   While I found Alan Greenspan’s comment both humorous and insightful, Jason Rink just provided one about Ron Paul: “They say Ron Paul […]

2. Brian wrote on 09/25/07 at 9:33 am :

   There is one aspect of economics that I don’t think enough people truly appreciate: the ceteris paribus assumptions. An economy of any size is so hopelessly complicated (I could have told Greenspan) that it is impossible to mathematically model. So economists essentially isolate a subset of variables and assume everything else is constant or irrelevant, which is certainly not true. Consequently, and this is why I love economics, it allows the economist to massage the problem through judicious selection of variables and constants and arrive at a solution of his choosing.

   Of course, interventionary policies based on innately limited economic models often bring about unintended consequences due to the unforeseen interaction of phenomena that were held constant. The market, however, has a sublime way of handling all of the variables and arriving at a just solution that optimizes resources. Well meaning interventionists like Greenspan (and the politicians that goad them) only tend to exacerbate and delay problems when they attempt to “correct” them.

   Many of Ron Paul’s economic policies, which paint a striking contrast with the interventionism we’ve come to expect and are frequently labeled as “kooky” by establishment types, are starting to sound a good bit more like the elixir this country needs to avoid continuing head long into financial ruin.

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