Steve Hayward at Powerline discusses just how useless modern economic theory is in trying to make sense of a modern economy. He does so in the context of the newest rising star in the Democrat firmament, Alexandria Ocasio-Cortez. Let me first go to the statement she made that has everyone laughing at her, but I have yet to see anyone explain exactly why she is so out to lunch, which she is: unemployment, she said, is low because most people are working two jobs! But more to the point was this, which is spot on, but doesn’t go anywhere near far enough:
Economics, even on the undergraduate level, has been slowly becoming more mathematically intense in recent years, at the expense of any consideration of economic history or old-fashioned political economy. You will learn good skills from today’s math-heavy economics instruction, but at the loss of direct connection to actual economic issues in the real world. You learn how to make a lot of sophisticated regression models, and how to tease out data sets, but you don’t learn much on how an economy actually works, especially how markets work. The partial exception to this will be the leftist faculty concerned with inequality, labor, and the environment. Hence students will only hear of economic perspectives on current issues from one direction.
The result is that someone who has graduated fourth in her class at Boston University in Economics and Foreign Relations knows next to nothing on how an economy works (and equally has no clue about foreign relations as well). Yet she remains the rising star on the left who are overwhelmingly just as ignorant as she is.