Friday, April 15, 2011

Economic Gibberish On CNBC

I really wish there was an effective competitor to CNBC in the field of business and financial news.

As it is, while viewing/listening to the network for news, I am forced to hear a lot of nonsense which the producers evidently feel passes as 'debate.'

For example, for the past 5-10 minutes, I've listened to a largely meaningless exchange among a few minor economists, an anchor, and one moron.

The moron, of course, is the network's senior economic idiot, Steve Liesman. Just how many compromising pictures of how many CNBC executives does that guy have? How else could he continue to do such a horrific job and remain employed there?

Today, the subject was this morning's inflation measures. The predictable wrangling involved the Fed's preference for a measure which ignores food and fuel price changes.

Michelle Girard, a senior or chief economist at a second-tier bank, was largely confused. I checked her bio, and noticed that she has no PhD in the field. You would think, with all of the economics PhD minted from decent programs, large banks could at least manage to have one of those on staff.

Besides Girard's meandering coments, it was pretty clear from the content of some of her remarks that she doesn't fully comprehend the manner in which the phenomenon of commodity price rises can suddenly effect the US economy. I recall living through the Ford-Carter inflation era. I think Girard only read about it and, thus, has an incomplete appreciation for how quickly the nation's economy can be mismanaged into misery indices well above the mid-teens.

Liesman continued his Fed ass-kissing from the morning's debate with Rick Santelli. Displaying his usual lack of intelligence, the economic moron confused Santelli's point about excluding food and energy with the different concept of replacing items in an index to ostensibly capture higher values in more modern goods or services. But, whether misunderstanding someone else's point, or making an illogical one of his own, Liesman steadfastly defended whatever the Fed does. It doesn't take a genius to figure out why. This guy has become the Fed's notional outside publicity hack. He seems to be on a non-stop tour of Fed banks, interviewing chairmen with softball questions. Thus, any comments from him that seem out of step with Fedspeak might cut off his access.

Sadly, the result of the multi-person exchange a few minutes ago was more heat than light. And nothing in the way of conclusive points.

Too bad some real heavyweights like John Taylor, David Malpas or Brian Westbury couldn't be assembled for a really interesting discussion of this topic.

Thus the irony that one of the co-anchors thanked all involved for such a productive 'debate.'

4 comments:

Unknown said...

"moron", "lack of intelligence", only opinions backed by Phds are worth anything, all of that but no reasoned argument for why the volatile short-term oscillations of commodity prices should not be discounted when considering longer-term economic policy? Hmmm?

C Neul said...

Lisa-

Actually, my remarks were much more nuanced than you suggest.

Kudlow doesn't hold a PhD in economics, either. But he's far more credible than Liesman or, for that matter, Girard.

What I noted is that it's surprising major banks employ chief economists who are not PhDs, and that a worthwhile panel for the discussion at hand didn't include some heavier-weight PhDs in the field.

Regarding your point, I would disagree that all we are seeing is "volatile short-term oscillations of commodity prices."

Trends in key energy and agricultural commodities, such as corn and oil, have been rising for much longer than just "short term."

I'd suggest the volatility be ignored in favor of the more important trends and relationship to the Fed's expansive monetary policies.

-CN

Unknown said...

Now there's a good argument. No mention of morons or anyone's lack of intelligence.

Now we can actually talk about the long-term behavior of commodity prices and a reasonable policy reaction.

I've always had an issue with excluding oil and food from inflation calculations but I do understand what Fed economists are talking about. It makes sense ...until it doesn't anymore and it's making less and less sense these days. They may be inclined to listen to people/entities who understand how they got there in the first place.

In these days and times when the consequences are so dire we may want to talk about what's actually going on and leave the name calling to the morons.

C Neul said...

Lisa-

In my defense, I would note, as I have in prior posts, that Liesman is not an economist in any sense. He's a misinformed journalist who thinks he is an economist.

Thus, my remarks concerning intellect are, you will note, confined to him, and not meant to include any real economists, whether MAs or PhDs.

While on the subject, one of the reasons I mention the PhDs and major banks is this. The additional and very different rigors of a PhD degree, as opposed to a merely writing a thesis to earn an MA, allow a PhD in economics to be likely to be able to effectively engage in new research and the development of new paradigms.

If all one needs is an MA, which is really just a few courses and a paper more than a BA, but of essentially similar nature, then someone like, say, me, with a graduate degree in business and a life-long interest in reading and writing about economics, could also qualify for the position.

But I'd never hire someone like me for such a position, because, to add value as a major bank economist, I'd think they should be capable of espousing new views with some credentials indicating that they have been found capable of such.

I just don't think MAs in economics satisfy that criterion. As an institutional customer of a major bank, I'd be challenged to take seriously a chief economist that wasn't a PhD.

-CN