The problem with economics (and economists) is that all their ideas are predicated on the idea that humans are rational. But anyone who has ever talked to another human knows that we are not rational.
That’s what gave rise to “behavioral economics.” Which is when economics when it runs into real life.
It’s with that idea in mind that I present to you this great post by Jason Cohen on A Smart Bear.
The Serengeti Plain: Fallacies that aren’t fallacies [A Smart Bear] – “Economists claim that “maximizing expected value” is what logical people do. It doesn’t bother those same economists that they cannot predict any major metrics of the economy or markets, while constantly issuing memos excusing their models for getting it wrong for the 74th time in a row. All while calling everyone else irrational.”
Enjoy!