June 6, 2012

Economic Determinism

By Don Kirk in Economics, Politics

This is a chart from Professor’s Perry’s blog, Carpe Diem, which is a copy of the chart from today’s Business Insider on-line magazine. The magazine article says that the relationship between trading the S&P 500 Index and trading on a president’s re-election successfully forecasts a president’s re-election 88% of the time, an unusually high correlation.

Traders and their charts are not much better at predicting the future than palm readers or astrologists watching the trajectories of stars and planets. They all have the determinist’s world-view, a view common to one-path scientists, one-solution mathematicians, one-god priests, and importantly, all Left and Right socialist mass murderers of the 20C.

It’s easy to see why determinist’s form their world-view; Hume long ago pointed out the fallacy of perceiving cause and effect. But 88% reliability. That’s too much success to ignore, even if it is clearly not science’s 100%.