Why Does The Left Alliance Of Economists Fail? (Krugman, DeLong, Yglasias, Thoma, Smith)
Why does wall street resist QE for example?
Wall Street staff are in the business of planning and policy interferes with their plans, both by uncertainty and by impact.
Like any specialization with a defined methodology and therefore a limited scope of understanding, Wall Street’s opinion is irrelevant (as @Richard Williamson says above) as their opinions are too unsophisticated to have meaning.
WS is a mob not a hierarchy. WS is only material in how they REACT to change. How they react to change in the short term will be negative — to anything that interferes with their existing plans. Where ‘plans’ in this case are vague heuristic assumptions. But because they have the highest liquidity and most flexible liquidity of any industry in the market, their cost for changing plans is lower than the cost of changing plans for anyone else in the market.
So, the problem with advancing QE/Spending policy is not wall street. It is politics, of which WS is just one constituency.
And the problem of politics is the failure of the four groups of ECONOMIC IDEOLOGISTS to compose an economic program that PREVENTS INVOLUNTARY TRANSFERS between groups and instead BORROWS FROM AND REWARDS GROUPS. Where groups profit from different temporal positions on the human production cycle, and where that production cycle manifests itself as time preference.
Your assumption is instead, that it will ‘trickle through’ the economy, making you no different from any one of the OTHER groups of economic ideologists who want to rewards to ‘trickle up’ or ‘trickle down’ or ‘trickle out from the entrepreneurial middle’. ‘Trickling’ produces all sorts of involuntary transfers, of status, of risk, of opportunity, and of wealth. We are not children, we do not have to play one note. we can compose a chord of solutions.
The fantasy of the egalitarian community of common interest, for some reason, blinds left-economists and moderates alike to the inequality of function and therefore inequality of methods and incentives that different functional groups have in the economy,and by consequence the incentives of the political groups that represent them.
As Kahneman argues, people fight MUCH harder to prevent involuntary transfers than they do for their own reward. This behavior MANDATES that the four major schools, each of whom represent four groups, who represent four periodicities of human planning, conduct processes of voluntary exchange between the groups rather than attempt to support one ‘team’ winning.
For this reason I find the left’s position somewhat humorously hypocritical: a pot calling a kettle black. The methodology and incentives of WS are narrow and self serving, and the methodology of Keyensians is narrow and self serving.
I will be proven right in time — certainly more right than the Keynesians. I look at that group the way they look at wall street: myopic because of methodologically enforced ignorance, all of which is preceded by a cognitive bias, a cognitive bias which is the product of biology not wisdom. As is evidenced by their failure to grasp the principles of human cooperation that are common sense to conservatives. The conservatives are offering compromises, and have been doing so consistently (DOE and HUD). And you don’t want to pay those compromises, so they fit and fuss over creating a distraction to avoid the fact that they just want what they want regardless of the costs to others.
DEAR PROGRESSIVE ECONOMISTS. THE PROBLEM IS YOU, NOT WALL STREET, BUT YOU.
THE PROBLEM IS YOU.
You’re supposed to be smart. Try to be. Otherwise, if possessed of this knowledge you are just another person seeking involuntary transfers from others under the pretense that outcomes are kaliedic. But they are only kaliedic because of your ignorance. Ignorance others do not possess.
In that event, you are either just another fool or just another thief.
The question is whether you want to refrain from being both, and become a statesman instead.
We need some. Heck, one would do.