Look at that classy fucker.

 I know I'm supposed to be doing homework, and internally I promised myself to keep these to at most once a day, but I got a little gem that relates to how I contrast theory and empirics, summed up well by James Heckman (I had to find a picture that made him look the least like Colonel Sanders.).

"When Friedman died, a couple of years ago, we had a symposium for the alumni devoted to the Friedman legacy. I was talking about the permanent income hypothesis; Lucas was talking about rational expectations. We have some bright alums. One woman got up and said, “Look at the evidence on 401k plans and how people misuse them, or don’t use them. Are you really saying that people look ahead and plan ahead rationally?” And Lucas said, “Yes, that’s what the theory of rational expectations says, and that’s part of Friedman’s legacy.” I said, “No, it isn’t. He was much more empirically minded than that.” People took one part of his legacy and forgot the rest. They moved too far away from the data."

For most theorists their theories are true simply because they're true. Which seems like a non-starter way of looking at things. That's what happens when you "get too far away from the data."