>Two things can occur simultaneously (or one after the other) with no obvious connection.<
??? Two things occurring simultaneously is a correlation. Causation is the speculation or the theory that tries to explain why things happened like that.
Causation that is oblivious to correlation is fairytale. Correlation that is devoid of causality is a mystery that demands to be figured out.
You’re missing the context of that phrase. It says of two (or more) concurrently occuring events, correlation does not prove causation. It is trivially true that causation implies correlation, and on the other hand that all correlations involve causation. The phrase, however, says of two (or more) specific events correlation does not equal causation, i.e. there may be no necessary causal link between the events, i.e. that some other event might be the causal factor, and thus greendinjin’s point stands. It ain’t rocket science.
“I can make Wal-Mart raise their prices on corn and they will not sell less corn. I can make Wal-Mart raise their prices on X and they will not sell less X. They can simply lower their price on other items, allowing the customer to buy corn with their savings. Wal-Mart is elastic.”
> two events can occur concurrently with no causal connection whatsoever,
A single time can be coincidence. A happenstance is still a correlation, a mystery, but not one that I really pay much attention too. When you have the same type of correlation happening over and over, you are being foolish to pay it no attention. You are being ridiculous to suggest that it does not matter unless someone you respect has postulated a connection.
i.e. that a mere correlation of events does not prove that the one caused the other; something else might have<
So that this “something else” is the causality. No problem, but correlation demands that someone try to explain the why! Correlation demands causation.
>This is not rocket science.<
What? you want to discuss Einstein now?? and how he missed the import of Michelson-Morley on the speculation of Maxwell? I think for your sake we’ll leave the physics alone for now.
It frustrated me sometimes that the wall on facebook was very restrictive of edits. Now I wish it were true here.
>You’re missing the context of that phrase.<
Don’t tell me what I see or miss; what I understand or don’t. This is unwarranted and insulting speculation on your part. Just try to reiterate my statement so that I can see where my communication is failing.
It is trivially true that causation implies correlation<
No. Not trivial! Not trivial at all! Causation oblivious to correlation is lying propaganda.
there may be no necessary causal link between the events, i.e. that some other event might be the causal factor, <
So how does correlation not imply causation??? Correlation does not mean that you have the causation correct, but there is no way no how to state that causation is not demanded of correlation.
If I think you’ve misunderstood the meaning of the phrase, why oughtn’t I point it out? The fact is, from the insight that correlation is ultimately based on causation it is a non sequitur to then assert that a specific correlation is an instance of causation. So it is still incumbent upon you to prove that there exists some causation; merely stating correlations proves no such thing, and stating that correlation demands causation does not answer the question; it is pure evasion.
The fact is, from the insight that correlation is ultimately based on causation it is a non sequitur to then assert that a specific correlation is an instance of causation.
Correlation is strictly based on observation. It has nothing to do with causality. Causality is the speculation or theory that tries to explain the coincidence. Your statement seems to be a reversal of logic.
>If I think you’ve misunderstood the meaning of the phrase, why oughtn’t I point it out?<
An explanation as to why you comprehend my statements so poorly would be more productive than an accusation of stupidity. If you are really certain that the phrase has been misinterpreted by me, a simple reiteration would be more appropriate than accusing me of being oblivious.
“I can make John raise his wage price and he will be no less employable. His employer can simply lower his prices on other factors, allowing his customers to buy John’s services with their savings. The employer is elastic.”
Not necessarily. Correlation could be a matter of coincidence; any connection could be confounded by other variables; or the data could be inaccurate.
Nothing is perfectly elastic. The demand curve must have a downward slope to it. Perhaps the difference in sales is imperceptibly small when the price of corn is raised $1, or $5, or maybe even $10, but if corn at Wal-Mart increased, say, hundredfold in price, sales would slow down sharply. Likewise, if an advocate for the minimum wage makes the argument that “a higher ‘floor’ will increase wages throughout the economy without any effect on unemployment” it is a useful thought exercise to propose raising the minimum wage, in that case, to $100 or $1000 per hour. If that statement is true, wages across the economy will increase correspondingly without huge unemployment. If this advocate then says “well, it will cause unemployment” then the above statement must be false, or must have significant caveats.
I was quoting my ‘devil’s advocate’ personality.
To me it’s blatantly obvious that you can’t truthfully say, “The minimum wage doesn’t cause unemployment.”
Umm, you had best check your previous statements again. You answered in response to “correlation does not imply causation” that it instead demands it - what is your point then, if any? How does this constitute a response to what greendinjin said? What would the specific causal factors be, then?
What have I not comprehended?
Is this an accurate analogy of Arman’s position? Arman? I prefer analogies and parables to highly arguable, abstract economic concepts.
Correlation could be a matter of coincidence; any connection could be confounded by other variables; or the data could be inaccurate.
Then the other variables are part of the causality. Whatever! Correlation demands causality. Are you so laid back that you have no “why” in you??
Maybe I’m misunderstanding you. It sounded as though in the original context of which you stated that ‘correlation demands causality’, you were saying that since YOU correlated two things then one of those two things MUST have caused the other. And I think he was saying your correlation was in error and not that correlations don’t have a cause, whether accidental or what have you. Am I correct?
“Card’s original study of 92 was coincidental to the study by Krugar and Katz in the same year. Krugar and Card came together for the 94 study. How many ways must you be shown? And with the vilification going on, why bother. Why keep showing you the truth when you won’t seem to open your eyes?”
First off, before I go on about this. I want to know what excatly did card and kreuger study? What did they look at…and how did they come to their conclusion? Also note, only 3 studies have been able to contradict the hundreds of other studies. Now, my question is this. What did these 3 economists do differently than the other ones?
“You know some economists, and have read the work of others. Ever encounter one of those 37%. These are sober students of the economy, who have come to a conclusion that refutes their education. Where is their voice? They can’t be heard, because the emotional attachment is against them. Should they speak out, they too will be castigated as Card and Krugar. Notice that Katz is hardly ever mentioned? At least he didn’t have the gall to repeat what he said the first time, like Card and Krugar did. As long as you learn to shut up about what you’ve notice, you can enjoy the support of the establishment.”
Yes, I have actually. And their voice IS heard. Ever hear of Joseph Stiglitz? Paul Krugman? David Card and Alan Kreuger? I have encountered such “economists.” They are heard a lot. Stiglitz has won the nobel prize in economics. Krugman writes for the New York Times..and has appeared on “real time with bill maher” numerous times. You know about Card and Kreuger. To say that these guys have been “hurt” is silly. I mean, how would Stiglitz have won the nobel prize? He says minimum wage is not harmful. Your last statement about the “establishment” is just silly. It shows that you still believe that a majority of economists want the minimum wage abolished. Also note, you can not come to the conclusion that card and kreuger want minimum wage increased. They only found through their results that minimum wage is not harmful…and has caused some benefits. That is it.
“The enactment of these regulations gave zero change to the economic trend. Trade barriers are a red herring. They certainly do not aid an economy, but they are not nearly as detrimental as what you’ve been taught.”
I want to respond to this. Are you saying here that any/all government regulations have no negative effects on the economy? So the smoot-hawley act..which raised tariffs to about 75% I believe…had no negative effect on the economy? Trade barriers I guess do nothing? Or government programs like the WPA, the NRA, and these other things…had no effect on the economy? Neither positive nor negative?
Green, I have used the argument against Arman about raising the minimum wage to $100 or $1000 per hour. He believes that raising it this high will cause “constriction” in the economy. I don’t believe he mentioned unemployment would increase. It is just that people will start to spend less. But I will let him explain it in his own words.
" Yes. But there is still the minimum wage floor. The fact that workers move off entry level strongly indicate that it is of absolutely no detriment to the economy. It does not at all indicate that the floor is not needed."
But isn’t this statement here assuming workers start at minimum wage? For starters, I certainly didn’t start at minimum wage. I started way above minimum wage. Only once in my life, was I ever paid minimum wage. I do not believe that saying they move up means that minimum wage is not harmful.
“Monetary expansion causes inflation, and nothing but. This cannot show GDP growth”
Um…sure it can. You input more money into the economy through “easy credit.” You lower interest rates so you give incentive to people to want to take out more loans. Businesses will also take them out as well. They will invest more and create new jobs…and more expansion. This is spending money. Banks easily make the same amount of profit(or more) because they are getting more transactions…even though at a cheaper cost. It’s the idea of selling low to make a huge profit. Wal-mart has demonstrated this.
“The enactment of the NRA brought an immediate turn around to the GDP and unemployment. Your suggestion that the regulation caused a deepening of the depression is a denial of reality.”
I believe other posters would agree with me if I say that just looking at GDP and unemployment rates is not sufficient enough to determine the health of the economy. GDP can be explained very easily. A country can have a high GDP…yet a majority of its population are poor. I mean, china has a high GDP…yet some are claiming that chinese standard of living isn’t that great. Secondly, unemployment rates. During World War II, unemployment was at 3.2%. But you have to notice that a majority of the work force was in europe fighting a war. The government included soldiers as being “employed.” I don’t see how they are “producing” anything for americans at home…unless you believe killing people is a form of production.
“The local bank’s basic operation is using its credit to create money in its loaning operations. What it pays to the fed for the exchange notes is moot. What it has to pay other banks when their loans get deposited elsewhere dictate what they must earn in interest.”
Um..not really. The fed is just as important as other banks. Because as I said, one of the jobs of the feds is to be a “lender of last resort.” The feds is like the bank’s bank. Banks fill out loans to the feds…and then the bank uses that money to give a loan to another individual.
It sounded as though in the original context of which you stated that ‘correlation demands causality’, you were saying that since YOU correlated two things then one of those two things MUST have caused the other.<
“Caused the other” is speculative. This is what is meant by causality. Correlation is only the observation that this happens and that happens. Clear correlation is that every time this happens you will find that that happens. ‘Why this should be so’ is always speculative and is called causation.
Causation theory, such as “minimum wage causes economic problems” is rendered invalid when you look at a country’s GDP/capita and compare it with the stregnth of that country’s minimum wage or other income prop. Examining the real world with an open mind is prerequisit to postulating causation theory. This is something that Keynes, the founder of macro economics, stupidly avoided, and taught all his students to avoid, and his legacy persists in Economists today, even in Austrian circles.