I cannot help but disagree with some of the points made in Dylan Hoff’s column “Economics: A fairy tale.”
First, you claim that you do not have a clear understanding of the subject matter that you are criticizing. How can you draw conclusions about studies that you cannot or will not comprehend?
You state: “[A] bald man pushing red buttons to illustrate how accurate his stock option predictions are is serious business.” You are thinking of a financial analyst or perhaps a hedge fund manager. Try going after the finance majors next time.
You claim that economists think that our field is like a hard science. Have you taken an upper level economics class? Economists do not always agree on the same thing. No one can really predict exactly what will happen tomorrow in the markets. If they could, wouldn’t we all be rich?
By the way, no credible economist believes that we should renew the gold standard – unless of course you want to call Sarah Palin an economist.
Finally, you said “the cause of our economic turmoil stems from greedy banks, a housing bubble and mishandled mortgages.” Have you forgotten what went on in the White House before the downgrade? The United States was inches away from the first national default in U.S. history. The U.S. (like everyone else) has bills to pay. When the U.S. has less money than debt, the Obama administration has to choose who does not get paid this month. That could be your tuition payment, corporate subsidies, international aid, etc. With that kind of uncertainty, investors are scared that it could damage their portfolios.
S&P’s downgrade of the U.S. economy was a good decision. Although they did overestimate the U.S. deficit by $2 trillion, they later corrected the error before the downgrade. America’s debt is increasing unsustainably as a share of GDP in contrast to other AAA economies, such as Great Britain who has come up with plans to stabilize that ratio. With the threat of default being used as a gambling chip amongst politicians, S&P made the correct decision to downgrade the U.S. economy.