I came away feeling unsatisfied, is there a bigger cultural thing going on here?
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Quick edit: I also dislike the persistent narrative of 'guaranteed' placement for certain degrees and occupations. This assumes a stagnant market and skill-set that does not at all hold for current-day markets.
Schools are questioning basic financial aid now. If Trump follows through on eliminating ED, no one is confident that there's a plan for any of the essential services and payments. . . Because there's never really been a plan for anything else.
Higher education is scared right now.
A. The bottom half of PhD Economists are not being trained in the data science/Big Data side of analysis increasingly needed
B. There is less demand for Theory-sided Economists over computationally trained ones
Speaking as someone who has attended 3 economics Ph.D. defenses in the past two years.
"The whole damn field is turning into a bunch of Data Monkeys"
Referring to the rise of CS and DS minded economists in the field. His top student was a computer science major...
It was called statistics
The whole profession was basically centered around putting a dollar amount on risk.
For example, lets say I give you a chance of either taking $1k now, or playing a game where you have 1 in 10 chance to win $200k. What would you do? The right answer is "sell" the risk to someone. For example, on the average, if I "buy" the game from 10 people, at a price of $10k each, I can realistically win twice what I spend.
Repeat that over x number of steps and more complex games, and that is what the PhDs worked on in terms of pricing.
For most of the time it worked ok. In a few instances (most notably the Gaussian Copula that was a large reason for the subprime house market crisis in 2007) it didn't.
The problem is that now, its impossible to predict whether orange man is going to throw a hissy fit and cause the market to go up or down, or if large investors are going to artificially prop up stock like they did with Tesla.
Shortly before this debt time-bomb went off, Trump magically showed up tweeting in support of the company and alluded to a deal getting pulled off with GM. [] Of course, this ended up being spun off as Lordstown motors, a company that has failed horribly, including Hindenburg Research publishing a video of one of the few trucks they had literally catching on fire on the road while the CEO was simultaneously claiming they had hundreds of millions of dollars in solid orders (later fined by the SEC for that and barred from being an executive of a company for N years).
I still don't understand how Trump magically got involved with this penny stock at the 11th hour, but I can tell you I feel something very fishy happened there.
https://www.cnbc.com/2019/05/08/trump-tweet-sends-penny-stoc...
As the article indicates, a huge portion of the market for hiring PhDs is directly or indirectly dependent on federal funding. Universities are freezing hiring and reducing PhD cohort sizes, institutions like the IMF and World Bank are in crisis, and US government agencies have been reducing staff sizes. There was hope that the tech industry would provide another big source of jobs for PhD economists, but that hasn't panned out.
Source: the article, and my wife works in the UChicago economics department.
Very few outside academia are interested in vector autoregression models of inflation, DSGE or identification strategies.
Traditional macroeconomic data and all the models that complemented it is technical debt.
For the unaware - graduate level Economics is nothing like pop Economics, it's essentially an applied math degree. But the math in question is extremely wonky. Mostly using Convex Set Theory and Brouwer Fixed Point Theorem from topology to prove the existence, uniqueness, and stability of a general equilibrium solution for a "market" of price-quantity commodity pairs. The assumptions needed to make it work are literally absurd.
The most reliable model was the dead simple IS–LM, which is based on observations. But you don't really need a lot of math for it, so it's boring.
As a result, researchers keep trying to generalize the microeconomic behavior of people to derive macroeconomic laws. Like we do with the ideal gas laws. And this produces reams of beautiful math that you can investigate and tweak endlessly. But it doesn't seem to have a lot of predictive power.
For example, I do health systems research in an academic medical center. I work with a health economics research unit that doesn’t mint PhDs, but does hire at all stages of the academic career, and there’s been a lot of mobility for their “alums” - just not in traditional Econ departments.
There are many careers like this, including management consulting and high finance. The hope is that AI flips the script and democratizes these important functions in society
Yes, I was unprecise to the point of being wrong.
Here's what actually happened. The market looked pretty normal until November 5th, and then after that things went downhill. First the Fed Board of Governors stopped hiring (some regional banks kept hiring but had their offers explode on Jan 20). Then in January universities which had already done their first round interviews started imposing hiring freezes and cancelling flyouts. At the same time the Federal Government completely stopped hiring with DOGE coming in. Private sector hiring has been down for a few years since the ZIRP era ended so that part isn't new.
In the end I got a postdoc at a pretty good US university and will go on the market again in 2026-2027 with a much stronger portfolio than I had last year. Hopefully that will be enough for me, but I know for many others they may not be so lucky.
BTW one other thing besides what you mentioned is not just the freeze but the firings. FDIC lost 30% of staff, BOG is going to reduce maybe 10%, CFPB is no more, etc. so the market is actually being flooded with senior economists. They won't compete directly with the posts you want but still flood the market.
This all started when the govt began withholding federal funding in an attempt to clamp down on campus protests
If correct thats actually a pretty good ratio. In science you basically don't get a faculty position after the PhD, which lasts 5-7 years. You have to do a postdoc. Used to be 2-3 years, now its more like 5-6. To the extent its rare for any new faculty to be under the age 35.
He was a trader for Citibank and for awhile their highest paid trader. He essentially made a fortune (mostly for the bank but also for himself) by betting that after the 2008 GFC inequality would only increase, that we wouldn't go back to "normal".
He says that the best economists in the world are traders. Why? Because they have this big number over their head, their profit and loss ("P&L") that everyone at the bank can see. It also defines their bonus. All the finance and econ people in college are trying to become traders.
Then you have journalists. Any of them with an econ background have basically failed to become traders. Journalists self-select to reflect the views of their organization, famously articulated by Noam Chomsky in an interview [1].
And then you have Econ PhDs. Their only paths are to go work for academia, to produce more Econ PhDs or to work for think tanks and the like, essentially no different to the journalists. They play the same role medical researchers working for the tobacco did in the 20th century.
You see this with the dominance in Western economics academia of the Austrian School [2], which isn't precisely the same as neoliberalism but the differences are nuanced.
[1]: https://www.youtube.com/watch?v=qvGmBSHFuj0
[2]: https://en.wikipedia.org/wiki/Austrian_school_of_economics
Academia is dominated by Keynesianism.
Of course, with the rampant anti-intellectualism burning a path through our institutions, we're currently doing our best to kill that and make sure we fall behind in every respect.
It has never been a science. You can't run controlled experiments outside of small microeconomic scenarios, so nothing is falsifiable or repeatable. It's all just arguing about correlation and causation.
"WSJ headline: The Governor of California has called the President a "baby" on social media, so psychologists are predicting retaliatory sanctions and job losses by Q2"
cjbgkagh•1h ago
postflopclarity•1h ago
ceejayoz•1h ago
mothballed•1h ago
Consider that Ludwig Von Mises, one of the most famous economists never held a tenure track position. And Milton Friedman won a nobel prize, including a study of monetary history that damned the fed for helping bring on the great depression -- later nobel prize to Bernanke for works that included the great depression held quite different or even opposing views to Friedman.
cjbgkagh•59m ago
I don’t doubt that the economics profession has been shaped by politics but it appears they are and have been rather willing participants.
bee_rider•49m ago
cjbgkagh•39m ago
If I were to make a distinction it would be that Austrian is a Positive Theory and Neo-Keynesian is a Normative theory, and I think it’s fair to say that normative theories are more open to political influence than positive ones.
hapless•18m ago
mothballed•15m ago
nemo44x•45m ago
hapless•20m ago
Even today he would never have a chance at a reputable economics department -- only GMU gives any credence to that kind of witch doctor nonsense.
mothballed•8m ago
cyberax•8m ago
The whole Austrian "school" of economists basically _prides_ itself on not making predictions but using their dogma to explain whatever happens later. They always have an explanation why everything is a result of rational decisions of individuals. And if anything can't be explained by that, it's just because the government interferes with the perfection of markets.