The Tower of Babel and the Economists

The ancient myth of the Tower of Babel involved the idea of a structure to be built which would enable men to reach to Heaven. But the Good Lord apparently disapproved and caused the men building the tower to use different tongues so no man could understand his neighbor and the edifice was never completed. In fact, the word 'Babel' stems from the Semitic word 'balal' — to confuse. Thus, the Tower of Babel is associated with the 'confusion of tongues.'

The story of the Tower of Babel brings to mind the present day economists and the confusion they generate when they inundate us with their arcane formulas and cabalistic jargon. You all have been exposed to their specialized language such as M1, M2, Keynesian, monetarist, fiscal policy, Federal Reserve policy, supply side, demand side, and no one understands. And when all else fails, the economists fall back on their numbers — statistical data in minute percentage form to prove that inflation isn't as bad as it seems, that real interest rates aren't all that high, that unemployment figures are somewhat illusory, etcetera.

Most people do not understand their abstruse articles, but are probably overwhelmed and in awe of the economists' apparent erudition. It is axiomatic that language, and especially specialized language, confers power. Ask any layman about the power of medical or legal terminology as used by doctors and lawyers, and the aura of omniscience it generates. Whether economics is an art or a science or merely an educated guess is problematic. I only know that they don't know. The record of the last few years with respect to our economy is mute testimony to that. The economists, despite their many learned expositions, have been unable by their various and sundry panaceas to prevent record-high interest rates and concomitant record-high inflation, the highest unemployment in over 40 years.

Aura of wisdom is tarnished by facts

The ordinary individual with little knowledge of the ramifications of the stock market has less business being in it than I had betting on some distant football game.

Sadly, the fallout will negatively impact on many people too poor to have invested and the investment community, made up of highly paid and supposedly knowledgeable financial advisors, all ran for the fire exits. The underlying economic factors could not have changed overnight, but reason no longer prevailed.

The smart money managers just no longer trusted their own judgments and followed each other down the chute like the lemmings they really are. They proved themselves hardly worthy of the trust reposed in them by the investing public, or meriting the inflated million dollar salaries they earn (or rather receive).

Mad Monday was a sad and dramatic spectacle of a cattle stampede and mob psychology in action. The credibility of the stock market cognoscenti was grievously damaged.

Overnight all the hype, hyperbole and uncurbed optimism so prevalent in the pre-October days as the Dow Jones climbed to over 2722 was replaced by an air of pervasive pessimism. In the once august and highly respected stock market, the line between euphoric buying and chaotic selling is indistinct.

Supply side theory just an illusion

I submit that the current drop in inflation and interest rates is due to the recession rather than knowledgeable economic policies. The unemployment figures are rising steadily and no economy can be deemed healthy in the face of record unemployment.

I could cite numerous examples of such flip-flops, contradictions and disarray in economic policy, but what's the use? You get the point, and anything we say won't stem the flood of pontificating pundits inundating us with their portentous tracts replete with incomprehensible vocabulary and coated with a scholarly veneer.

Just remember their past record and take it all with a grain of salt. The learned economists, like the workers on the Tower, also speak with different tongues and sow confusion in their wake.

Tax increase, cut are juxtaposed

A current indication of the disarray of the fiscal system is the recent push by an unruffled President Reagan for the highest tax increase in history — one year after he vigorously fought for the highest tax cut in history. The juxtaposition of these two diametrically opposed positions is egregious testimony to the confusion which reigns in government policy circles.

I submit that the current drop in inflation and interest rates is due to the recession rather than knowledgeable economic policies. The unemployment figures are rising steadily and no economy can be deemed healthy in the face of record unemployment.

I could cite numerous examples of such flip-flops, contradictions and disarray in economic policy, but what's the use? You get the point, and anything we say won't stem the flood of pontificating pundits inundating us with their portentous tracts replete with incomprehensible vocabulary and coated with a scholarly veneer.

Just remember their past record and take it all with a grain of salt. The learned economists, like the workers on the Tower, also speak with different tongues and sow confusion in their wake.