To Doug French ....
it was worth reading your entire article (all very good) to see this one sentence:
"To judge the value of mathematical economics one must assess the assumptions embedded into the myriad of equations that these mainstream prognosticators manipulate to produce their forecasts."
By now, I suspect we have all heard the phrase: "garbage in, garbage out". The equations may be flawless, but the inputs are wrong. The result will be perfectly wrong answers.
Much of the time, the inputs are intentionally wrong. An example is the fudging of numbers by politicians as they submit data to the Congressional Budget Committee for analysis of proposed legislation.
President Obama's mostly forgotten jobs package would reportedly create 1.9 million new jobs, a one-percentage-point drop in the unemployment rate, and goose GDP by two percentage points. That was the prediction of Mark Zandi, chief economist of Moody's Analytics. You see, he has a model. He did a simulation, and presto — 1.9 million jobs!
Zandi practices what one of my undergraduate economics professors told our class: "Predict often. That way, when you occasionally get lucky, you can take credit for it."
But the Moody's man is on a cold streak. Zandi has predicted the bottom of the housing market every...
"Manipulate" is definitely the correct word to describe how politicians bastardize numbers.