Doug French

President Obama's mostly forgotten jobs package would reportedly create 1.9 million new jobs, a one-percentage-point drop in the unemployment rate, and goose GDP by two percentage points. That was the prediction of Mark Zandi, chief economist of Moody's Analytics. You see, he has a model. He did a simulation, and presto — 1.9 million jobs!

Zandi practices what one of my undergraduate economics professors told our class: "Predict often. That way, when you occasionally get lucky, you can take credit for it."

But the Moody's man is on a cold streak. Zandi has predicted the bottom of the housing market every year since 2006. And QE after QE was supposed to right the good ship USS Economy.

Zandi and Alan Blinder figure the 2009 fiscal stimulus created 2.7 million jobs and added $460 billion to gross domestic product. Unemployment would be 11 percent today if the stimulus hadn't been passed and 16.5 percent if neither the fiscal stimulus nor the banks' rescue had been enacted, according to Zandi and Blinder. "It's pretty hard to deny that it had a measurable impact," Zandi said.

What must be hard for Zandi is deciding what numbers he will pull out of the air to make such preposterous statements.

But math is the modern economist's stock in trade. Anyone wanting to be a PhD economist must endure semester after semester of high-level math. The late Larry Sechrest wrote that at the University of Texas Arlington,

There were four semesters of econometrics and two semesters of mathematical economics. Moreover, virtually every class in the Ph.D. program required that the student write an econometrically based term paper.

An economics PhD student at North Carolina State posted on reddit economics the courses in math he or she took to prepare: three semesters of calculus and differential equations, linear algebra, upper and lower real analysis, topology, optimization theory, probability theory and statistics theory.

A student needs that entire math training to build robust models that will produce quality predictions similar to those produced by those at the top of the profession, like Mr. Zandi.

Math dominates the economics field, as Murray Rothbard explains,

because of the pervading epistemology of positivism. Positivism is essentially an interpretation of the methodology of physics ballooned into a general theory of knowledge for all fields.

Physics is believed to be a real science, Rothbard continues, while


Doug French

Doug French is is president of the Mises Institute and author of Early Speculative Bubbles & Increases in the Money Supply and Walk Away: The Rise and Fall of the Home-Ownership Myth

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