Earth to Talking Heads:
A Guide for Cutting through the Punditry of Economics
The problem we face together is largely a problem of economics, how the society organizes itself to provide for its members. A cacophony of voices and opinions obscures a clear, coherent and comprehensive understanding of how things work, largely for the reason that every economic actor adopts a point of view based on his own self-interest or the interest of the group to which he belongs.
The present work was originally designed as a satirical guide for pundits, the talking heads of Sunday television. Some of that flavor has been retained, but the current version is more straightforward, and hopefully more helpful.
The term “pundit” derives from the Hindu payndit, a person of time past in India and of considerably more dignity than the modern pundit. Sometimes called “talking heads,” pundits are experts, self-styled or styled by others, in political, economic and social matters. They are the interpreters of the culture in the media – from Sunday talk shows, where they may appear in groups, to nightly interviews, and into the editorial pages of newspapers large and small. A syndicated column automatically certificates a person as a pundit of the third and highest grade.
A functional understanding of economics is not the most important attribute for this caste of quasi-experts. More important is a seriousness of voice, a proper rhythm of speech and if possible, a skill at phraseology which discourages interruption. More important still is the constituency from which the pundit arises. There is a political or cultural voice which (albeit informally) nominates and elects the pundit to represent it. Thus, to be successful, a pundit must have a brand that is distinctive, but it cannot vary too far or too fast from that of her constituency.
The pundit must navigate the news and appear to be contemporary and informed, but cannot revise her opinions to such a degree that she alienates her constituency and thus her brand. Crucially, a thorough reading here will allow the pundit herself an advantage on her competition in virtually every circumstance. This advantage is important, for it is the argument that is important, and the shaming of one’s adversary – no matter the apparent congeniality on the set – which is the validation of the pundit to her constituency.
How is it possible to have the advantage in every situation? Because economics is broken. As taught and practiced, the economics that rules policy and is learned in virtually every school of higher education is a quasi-science based on faith, immune to correction by evidence. The extent of the dysfunction is difficult to convey, and to believe, precisely because it is so broad and so complete. Thus it is NOT widely conveyed or believed. But it is real, and to the benefit of the pundit, who can choose on one hand to cite one of a hundred esteemed orthodox economists, or on the other – once he has read this book – can bring to bear the argument which cogently invalidates his opponent’s view. (Should his opponent also have read this book, there is always the tested closure, “The jury is still out on that.”)
The nature of the situation is best illustrated in relation to the Great Financial Crisis and the subsequent stagnation of the real economy. Those who predicted the crisis, who were right, were on the margins watching the complacency of the conventional economists. The crisis came and invalidated that complacency, but it did not change the positions of the economists. Those who were right are still marginalized. Those who were wrong still direct policy. Another illustration came with the announcement of the most recent Nobel Prize in Economics. The 2014 Prize was shared by Robert Shiller and Eugene Fama. These two economists have diametrically opposite opinions. A third illustration came when the Bank of England issued a report early in 2014 which directly contradicted Federal Reserve chairman Ben Bernanke on a basic tenet of where banks get their money to lend.
So we offer this guide for the benefit of those who interpret the news and commentary, but also for the pundit himself.