“You’re Not an Economist”

I hear that one a lot.  And rightfully so.  I am not a trained or formal PhD economist.  Sure, I graduated with an undergrad Finance degree and have worked in the belly of the economic beast for a long time, but how could I possibly be smart enough or trained enough to understand how the economy functions or how “real” economists work?  Good question.  There’s a high probability that I am totally unqualified to discuss half the things I discuss.  I am extremely open to criticism.  I certainly don’t pretend to know everything.

Then again, did you also know that Adam Smith, JM Keynes, Karl Marx and Wynne Godley also had no formal economics training?   Maybe you did.  In which case I am sure you’re probably open-minded enough to know that you don’t necessarily have to have trained in a formal economics program to understand the complexities of economics and make contributions.  Better yet, this might even support the thinking that people from outside the formal economics profession actually approach the world of economics in a way that makes them equally if not more qualified to discuss it.

Of course, none of us are Smith, Keynes, Marx or Godley, but you get the point.  Trying to discredit someone who isn’t a “trained” economist is not an attempt to discredit someone based on the merit of their work, but on the credentials that potentially mean nothing.  It’s like going up to 20 year old Bill Gates and shrugging him off for having no computer science degree.

Anyhow, I am mostly just bookmarking this for the next person who decides to come along and try to discredit me because I didn’t spend 7 years of my life getting a PhD and instead decided to spend 7 years in the real economy actually experiencing how an economy works….A lot of my arguments are wrong and my work might be completely flawed.  But that’s a judgement on the quality of my work, not necessarily the quality of my formal education.  

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Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

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  • d

    Most economists I’ve read are just short of brain-dead. A waste of potentially productive individuals.

  • Malmo

    Your not being a trained economist is a strength not a weakness.

  • Barry Lainof

    Don’t let the trolls get you down. Although I disagree with most of your analysis on the economy, I read your opinions daily in order to balance my bias against the Fed policy of easy credit, buying mortgage backed bonds not at current market prices or better yet not at a discount. I know “banks create money” not the Fed ; ) – but the Fed makes it almost risk free to to take a dollar, lend out 20 plus dollars and pay minimal interest for that privilege. I’d take that deal any day. Keep writing please, my day is better for your efforts. BTW there is always the Univesity of Phoenix ; )

  • Guest

    Neither did Paul McCulley

  • LVG

    A undergrad econ degree from Georgetown is better than a PhD from half of the programs out there. Don’t let em tear you down like that.

  • LRM

    Piled Higher and Deeper with a BS specialty, enough of those already. The flock at the Fed with cred said no house bubble. That is all you need to know.

  • http://www.concertedaction.com Ramanan

    Thankfully not necessary to study economics and in fact damaging.

    The great James Tobin – although neoclassical but still good – called the IS/LM “trained intuition”. Imagine how constrained one’s thinking becomes with such trained intuitions.

  • Tim

    “You’re not an economist,” is more of a compliment than an insult in a vacuum without further context. :-p

  • http://www.fanbrowser.com/ Cowpoke

    Thank Goodness your not or not many people would be here. Economist just seem to Drone On &ON&ON…. saying BIG words that really are nothing more than a verbal escape routes from differing outcomes.
    Kinda like the weather man 50% Chance of Rain………

  • GLG34

    Trained economists are like scientists who can’t actually perform real-world experiments to prove their theories and rarely have the real-world experience to formulate rational theories to begin with. In other words, most of them are just political theorists who can’t prove anything and don’t have the experience to even understand it in the first place.

    I don’t know why anyone still places their faith in the hands of these people.

  • http://brown-blog-5.blogspot.com/ Tom Brown

    Sometimes it seems Cullen is proud to make that point. ;)

  • El Viejo

    Not all, but a lot of Phds I’ve worked around liked to pontificate and rest on their laurels.

    I’ll take an undergrad from the school of hard knocks(my alma mater) over a Phd from a diploma mill. The truly experienced are more likely to know how things really work and not just a bunch of theory.

    Been told I’m not a “real” engineer cause I’m not a PE. I’m really more of a programmer than an engineer, but I have replaced engineers. At my last job I replaced two. I had to earn respect on every project often on a daily basis and not through seniority or politics

    These days people want results.

  • fin

    I’m a phD and at least half of my friends are phD. However, I don’t see any reason it automatically connect to good insight, open mind, or healthy common sense.

    we say phD=permanent head damage, it is just partly a joke…

    And I totally agree this is not your weakness but a strong point…

  • CuriousLurker

    I’ve been around the block enough times to know that “titles/degrees” don’t necessarily reflect working knowledge. Besides, when a person doesn’t know enough to effectively debate the message, they usually resort to attacking the messenger.

    I second what Barry said above, “…my day is better because of your efforts”.

  • adarutoeiga

    Ideally you should train as an economist, get a PhD then pratice in the real word to rebut most of what you’ve learned…

  • http://exertia.wordpress.com exertia
  • InvestorX

    So you were not brainwashed.

    Actually at some point of one’s career, nobody asks anymore what you have studied.

    I see so many successful and obscenely well paid hedge fund managers with a BS in literature or history or…

  • Nils

    I can get you a degree from the University of Nigeria if it helps.

  • Kobayachi

    Here is a video worth watching: http://www.youtube.com/watch?v=JQuHSQXxsjM
    Kyle Bass said it best: most economists are simply intellectually dishonest nowadays.

  • But What Do I Know?

    Amen. Keep doing what you’re doing, CR. . .

  • http://dismalecon.blogspot.ca DismalEconomist

    I have a masters in economics and can say that outside of the work I did on my thesis and a couple of good macro professors (who still weren’t money and banking experts, just good motivators) the rest of the information learned in that degree was trivial for everyday work and the real economy. I’ve learned far more from sites like yours and reading good books than I ever did from formal education. All I can say in support of a traditional degree is that it helps train your brain to tackle complexity. As long as you remain skeptical of what’s being taught and ask lots of questions you can come out the other end feeling enlightened. If all you do is scribble notes in your book you’re missing out on the best part of the education experience.

  • YouCanOnlyDreamAboutBurma

    Yeah Kyle Bas, like we should listen to that guy…

  • pupcakes

    People give undue weight to credentials. People with credentials are wrong all the time and I’ve seen people with formal training or degrees who have no idea what to do and put what they’ve learned to practical use once they get in the work world. I fight against this in my workplace all the time, where managers unfairly discount some of our best and brightest employees because they don’t have an MBA or law degree or CFA or whatever and are quick to hire people with formal qualifications but no real world experience and no clue of how to do the actual job.

    Unless you’re in a career where the specialized education is neccesary (e.g. STEM), formal credentials should be only one of many considerations we use when evaluating people. Unfortunately some people haven’t cottoned onto this yet.

  • Knives Nelson

    Well I’ve been referring to you as my “favorite economist” for about 4 years now. But thinking about it– you regularly confess to not knowing all the answers. You’re way too humble to be a real economist…

  • Kyle F.

    It seems to me that the value of an advanced degree is the opportunity to achieve clarity in one’s thinking. As a philosophy undergrad, I experienced the necessity of nuanced thinking because of real-world complexity. As C.S. Lewis said,

    “After all, real things are not simple. They look simple, but they are not. The table I am sitting at looks simple: but ask a scientist to tell you what it is really made of—all about the atoms and how the light waves rebound from them and hit my eye and what they do to the optic nerve and what it does to my brain—and, of course, you find that what we call ‘seeing a table’ lands you in mysteries and complications which you can hardly get to the end of.”

    It seems to me that the PhD found it more expedient for him/her to achieve this discipline of thinking by entering a program where accountability, training, and collaboration existed. It’s like someone joining a boot camp to stay physically fit, sometimes people don’t have the emotional margin to discipline themselves.

    “You wasted $150,000 on an education you coulda got for $1.50 in late fees at the public library.”

    If one actively and publicly engages issues whether through reading, writing, teaching, and today blogging, they very well may be achieving the same level of clear thinking one might get through a PhD program.

    If one’s approach to a degree or designation is to “show what you know”, their critiques should be viewed with suspicion. Alternatively, if one’s approach is to contribute to a higher level of understanding of real-world issues, then arguments should stand on their own merits.

    Keep up the good work, the openness, and the willingness to publicly make assertions that will be criticized and disregarded. It will make you a clearer thinker.

  • Kobayachi

    The video is from Mark Blyth actually. He’s view is that economists are just there to intellectually back up some stupid ideas so that rich guys can get richer.
    What’s your problem with Kyle Bass? He’s not an ideology peddling economist as far as I know.

  • Sigi

    I’m wondering why you even react to such comments. Haters gonna hate.

    You write one of the most informed financial blogs on the Internet. The haters can shove it.

  • Shorehaven

    Cullen,

    Your blog is much better than most economists’. Too many (probably most) of them have their economic opinions and theories shaped by their politics. I sense your politics are shaped by your economic opinions. Keep up the good work.