There is no such thing as objective thinking without emotional coloring. In the underbelly of the Prefrontal cortex just behind the eyes is tissue called the Orbitalfrontal Cortex. When it is injured, we become cold and distant and the formerly responsible person suddenly starts doing irresponsible things.
This illustrates the crucial importance of emotions in decision making. The Orbital-frontal Cortex is connected to the brain stem and amygdala two brain areas that generate emotions. A significant part of our prefrontal cortex is involved in emotion. See pages 18-20 and further chapters in the book How We Decide by Jonah Lehrer.
That is why I trust a Paul Krugman’s intuitive thinking because it can handle the complexity of economics. The best scientists rely on this to make significant breakthroughs. Einstein conceived of his theories before he and others proved it mathematically and via experiments.
Mathematicians make assumptions to build their economic models, but they do a poor job in assessing human emotional factors acting decisively in what we all do. Just like great poker players and stock market traders, it is not strictly mathematical.
Yes, computer programs cannot think as we saw recently. It is becoming more apparent that the Chicago School with all their Nobel Prizes in economics came up with a flawed economic model based on the theory that all humans make decisions to optimize their wealth.
Jim Kawakami, October 17, 2010, http://jimboguy.blogspot.com
The X Factor of Economics: People David Segal, NY Times Oct 16, 2010, http://www.nytimes.com/2010/10/17/weekinreview/17segal.html?src=me&ref=general Economists — they certainly are a contentious bunch.
The latest evidence came last week, in the form of the minutes of the latest meeting of the Federal Open Market Committee, the brain trust that establishes monetary policy. The committee, we learned, is divided on a seemingly straightforward question: Should the Fed take action to goose the economy now, or wait, watch and perhaps goose later?
Similar debates have attended virtually every element of the government’s efforts to turn the country’s fortunes around — even the parts that have been unfolding for more than a year. You might assume, for instance, that there would be a broad consensus about whether the $787 billion stimulus, passed in early 2009, worked.
But generally speaking, economists who thought it was a good idea at the time think it worked, and economists who thought otherwise beg to differ. And both sides make their cases with plenty of hard numbers.
Let’s leave aside the merits of these arguments and ask a question so basic it will sound naïve: Why do economists argue at all? Given that Fed members and economists are looking at the same data, and given the reams of evidence accumulated over decades — not to mention a few centuries of great minds, great theories and thick books that preceded this crisis — why isn’t a right answer self-evident?
George Bernard Shaw once said, “If all economists were laid end to end they would not reach a conclusion.” How come? What prevents economics from yielding answers the way that physics, chemistry and biology do? ... http://www.nytimes.com/2010/10/17/weekinreview/17segal.html?src=me&ref=general
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