The two headlines are quite related in that they are both a result of massive wealth transfers from working people to multi-national corporations and the military industrial complex Dwight warned us about.

But funny enough the business papers will talk about Exxon's profits as if they are a result of hard work and free market economics.

Exxon Mobil Profit Sets Record Again; $40.6 billion in net income

Couple of todays headlines.

U.S. Economy Unexpectedly Sheds 17,000 Jobs

and

U.S. Economy Unexpectedly Sheds 17,000 Jobs

Who is right is a very good question.

But Russ' post implies that we should not even try to "micromanage" the economy through monetary policy. After all, the economy way too "complex".

I agree that there are reasons to dislike most (not all) counter-cyclical fiscal policies, but that was not what Russ was saying. He simply said the economy is too complex so we shouldn't try any "micromanagement" what so ever.

I don't see why complexity of the macroeconomy should, by itself, dissuade from trying to smooth the business cycle. The human body is also a very complex system that we poorly understand, yet we attempt to manage it all the time through the use of pharmaceuticals and a variety of medical procedures.

The answer is in comparing the empirical success of medicine vs. politics. Medicine tends to discard treatments that don't work, while our political leaders continue to think fiscal policy will do something.

Let's see, 3 months from now (a "quarter") I'm going to get an extra few hundred bucks. A) It's not enough for me to have much stimulus effect (I'll probably just make my credit card company unhappy by paying off the balance). B) It's awfully slow in coming. Who the hell knows what will happen in the meantime–it's likely to hit an economy that's already rebounded, in part due to the Fed's interest rate cuts. Fortunately it won't have much effect, or it could, at that point, cause the economy to overheat and result in inflation.

About all it will do is increase the deficit. Hooray.

So far, so good.

That's nothing. The Washington Redskins have picked 16 ot the last 17 presidential victors.

I don't see why complexity of the macroeconomy should, by itself, dissuade from trying to smooth the business cycle.

The human body is also a very complex system that we poorly understand, yet we attempt to manage it all the time through the use of pharmaceuticals and a variety of medical procedures.

These "medical interventions" do not always work and can have unintended consequences on a person's health, but the vast majority of people are willing to take the risk. Even Robin Hanson goes to the doctor on occasion. Why? Because he, like the rest of us, percieve that these interventions can sometimes help more than they harm.

So the argument you REALLY have to make isn't that the economy is complex (duh), it's that the prescribed "medicine" in this situation will hurt more than it helps. Are you able to make that argument?

While the Wall Street Journal got rid of the column, I always remember checking in on the "dartboard" where industry "experts" went up against stocks picked by putting the broad sheet on a dartboard. It's always fun to see randomness beating the pants off of professionals.