Economic Failure

Jokes

Question: How many economists does it take to change a light bulb?

Answer: Seven, plus or minus ten.


Question: What do you call an economist that makes a prediction?

Answer: Wrong.


Question: Why was astrology invented?

Answer: So economics would seem like an accurate science.


Question: What happens when you put 10 economists in a room?

Answer: You'll get 11 opinions.


Question: How has the French revolution affected world economic growth?

Answer: Too early to say.


Question: Why did the chicken cross the road?

Answer: Because it maximized his utility.

Source: Wheelan, Charles. Naked Economics: Undressing the Dismal Science (Fully Revised and Updated). WW Norton & Company, 2010.

The number of economists is the only thing that contradicts the Law of Supply and Demand.


Economic forecasters assume everything, except responsibility.


Two economists fall into a hole. They realize they are trapped, and so they come up with a plan. The first step in their plan is... assume a ladder.


Three economists go hunting, and they come across a large deer. The first economist fires, but misses by a meter to the left. The second economist fires, but also misses, by a meter to the right. The third economist doesn’t fire, but shouts in triumph, "We got it! We got it!"


If you laid all the economists in the world end to end they still wouldn’t reach a conclusion.

Source: Burnham, Terry. Mean markets and lizard brains: How to profit from the new science of irrationality. John Wiley & Sons, 2008.


The First Law of Economists: For every economist, there exists an equal and opposite economist.


An economist is someone who is good with numbers but does not have the personality to be an accountant.

Source: Wheelan, Charles. Naked Economics: Undressing the Dismal Science (Fully Revised and Updated). WW Norton & Company, 2010.


Economists are people who are too smart for their own good and not smart enough for anyone else's.


An economist is someone who doesn't know what he's talking about - and make you feel it's your fault.

Long Joke

A mathematician, an accountant and an economist apply for the same job at an oil company.

The interviewer calls in the mathematician and asks “What do two plus two equal?” The mathematician replies “Four.” The interviewer asks “Four, exactly?” The mathematician looks at the interviewer hard and says “Yes, four, exactly.”

Then the interviewer calls in the accountant and asks the same question “What do two plus two equal?” The accountant says “On average, four – give or take ten percent, but on average, four.”

Then the interviewer calls in the economist and poses the same question “What do two plus two equal?” The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, “What do you want it to equal”?

Famous Quotes

“If trivial pursuit were designed by economists, it would have 100 questions and 3,000 answers.”

- Ronald Reagan


“Economists put decimal points in their forecasts to show that they have a sense of humour”

– William Gillmore Simms


“Economists will interrupt to show how smart they are” .

– Michael Lewis (author of Moneyball, The Blind Side and The Big Short) in The undoing project: A friendship that changed our minds


“John Kenneth Galbraith once slyly observed that economists were most economical with ideas”.

- Warren Buffet, Berkshire 2010 Letter to Shareholders


“An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen”.

- Earl Wilson

Source: Siegel, Eric. Predictive Analytics: The Power to Predict Who Will Click, Buy, Lie, or Die. John Wiley & Sons, 2013.


“Economists have predicted nine of the last five recessions”.

- Economist Paul Samuelson (Nobel Prize winner in Economics)

Source: Jakab, Spencer. Heads I Win, Tails I Win: Why Smart Investors Fail and How to Tilt the Odds in Your Favour. Penguin, 2016.

“We think that any company that has an economist has one employee too many.”

- Warren Buffett (annual meeting in 2015)

Source: Pecaut, D., Wrenn, C. (2017). University of Berkshire Hathaway: 30 Years of Lessons Learned from Warren Buffett & Charlie Munger at the Annual Shareholders Meeting. United States: Pecaut.

True Story

President Truman once said he wanted an economic adviser with only one arm, because he was tired of economists who say: "But on the other hand ..."

Best Quotes

- “Small assumption by small assumption, the economist builds up his theories into useless gibberish”.

Source: Wilmott, Paul. Frequently asked questions in quantitative finance. John Wiley & Sons, 2010.


- “Ceteris paribus [is] a phrase used by economists to refer to a set of circumstances that anyone else would describe with the word ’never’”

Source: The Devil's Financial Dictionary; Jason Zweig.


- “An [economist is] a professor who studies the real world from a perch in the ivory tower and concludes that the chaotic interactions of people, goods, and money conform to his or her theories. […] But economic theorists who don’t practice are ‘like eunuchs in a harem,’ the Harvard economist Alexander Gerschenkron once said. ‘They know everything about love, but they can’t do anything about it’”

Source: The Devil's Financial Dictionary; Jason Zweig.


- “A little-known fact about the economics profession is that economists suffer from a psychological condition best described as ’physics envy’. Physicists can explain 99 percent of all observable physical phenomena using Newton’s three laws of motion. Economists wish we had three laws capable of explaining 99 percent of all observable behavior in our professional purview. Instead, we probably have ninety-nine laws that explain 3 percent of all economic behavior”

Source: Lo, Andrew W. Adaptive markets: Financial evolution at the speed of thought. Princeton University Press, 2017.

Fun Facts

There have been, according to a Fathom Consulting study, 469 recessions (defined as a decline in a country’s GDP over a year) in 194 countries forecasted since 1988 by the International Monetary Fund in its biannual World Economic Outlook. In only 17 of these did they forecast a recession in the preceding year. They predicted recessions that did not occur 47 times.

Source: Shiller, Robert J. Narrative economics: How stories go viral and drive major economic events. Princeton University Press, 2019.


Traditionally, economists who study data have excelled in creating abstract theoretical models and in analyzing short-run economic data. They can accurately forecast macroeconomic changes a couple quarters into the future, but for the past half century, their one-year forecasts have been on the whole worthless. When assessing the probability that quarterly US GDP growth will be negative one year in the future, their predictions have had no relation to actual subsequent negative growth rates.

Source: Shiller, Robert J. Narrative economics: How stories go viral and drive major economic events. Princeton University Press, 2019.


In December 2007, the month that the recession officially began (it wouldn’t officially be declared until several months later), just 38 percent of economists surveyed believed that there would be a recession in the next year. [...] Conversely, on the other side of the recession in June 2009 (though that date wouldn’t be officially recognized by the recession-dating committee for quite some time), only 16 percent thought the recession would end that quarter.

Source: Jakab, Spencer. Heads I Win, Tails I Win: Why Smart Investors Fail and How to Tilt the Odds in Your Favour. Penguin, 2016.


[William] Sherden found that economists [...] also missed turning points in the economy. Their forecasting was no better than a “naïve forecast” that the near future would look like the recent past, and their ability to forecast accurately was, on average, no better than flipping a coin.

Source: Carlisle, Tobias E. Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations. John Wiley & Sons, 2014.


Yale Professor Irving Fisher was, by some accounts, the world’s most famous economist. [Yet] Fisher made what may be the worst economic prediction of all time when he pronounced: “Stocks have reached what looks like a permanently high plateau” . […] Professor Fisher made this sanguine statement in October 1929 just before the stock market collapsed by 90% and the Great Depression began.

Source: Burnham, Terry. Mean markets and lizard brains: How to profit from the new science of irrationality. John Wiley & Sons, 2008.

A Graph That Says It All

Source: Christopher W. Mayer. 100 Baggers: Stocks That Return 100-to-1 and How To Find Them. 2015