Forum Home
PC World Chat
Thread ID: 107133	2010-02-05 07:55:00	The Dynamite Prize in Economics	zqwerty (97)	PC World Chat

Post ID	Timestamp	Content	User
855611	2010-02-05 07:55:00	Here is a list of the originators of the idiotic theories that New Zealand governments have been following for the last 25 years, just read what I have copied from here (www.metafilter.com) and don't bother with the link if you have limited attention span. Check especially the Alan Greenspan paragraph where I have italicized. Fischer Black and Myron Scholes: They jointly developed the Black-Scholes model which led to the explosive growth of financial derivatives. The importance given to their hypothetical calculation of derivative prices was baneful not just because it was bogus, but also because it meant that relevant and often urgent real-world economic research was widely neglected by the profession. Eugene Fama: His “efficient market theory” provided the moral umbrella for all sorts of greed, predatory behaviour and incompetent corporate management. It also provided the rationale for deregulation. And his theory’s widespread acceptance meant that “discussion of investor irrationality, of bubbles, of destructive speculation had virtually disappeared from academic discourse.” In these three ways Fama’s work created the environment which made possible the GFC. Milton Friedman: He propagated the delusion, through his misunderstanding of the scientific method, that an economy can be accurately modeled using counterfactual propositions about its nature. This, together with his simplistic model of money, encouraged the development of the financial theories with unrealistic assumptions that facilitated the GFC. In short, he opened the door for everyone subsequently to theorize without fear of having to be attached to reality. Alan Greenspan: As Chairman of the Federal Reserve System from 1987 to 2006, he both led the over expansion of money and credit that created the bubble that burst and aggressively promoted the view that financial markets are naturally efficient and in no need of regulation. Before a Congressional committee on 28 October 2008 Greenspan confessed that his theoretical beliefs of 40 years were now proven to be without foundation, hence his total confusion and failure at his job. Assar Lindbeck: By working to make the Riksbank Prize in Economic Sciences (“Nobel Prize in Economics”) almost exclusively a prize for neoclassical economists, this Swedish economist has contributed significantly to the conversion of the economics profession and of world public opinion to market fundamentalism. Robert Lucas: His development of the rational expectations hypothesis, which defined rationality as the capacity to accurately predict the future, both served to maintain Friedman’s proposition that monetary factors do not affect the real economy and, in the name of “rigor”, distanced economics even further from reality than Friedman had thought possible. Richard Portes: As Secretary-General of the Royal Economic Society from 1992-2008, he helped suppress worries expressed by non-mainstream economists about developments in the financial sector. In 2007 he wrote a Report for the Icelandic Chamber of Commerce giving a clean bill of health to Icelandic banks only a few months before they collapsed. When investigators called attention to the real state of Icelandic banking, he wrote a series of letters to the Financial Times defending the soundness of Icelandic banks and imputing professional incompetence to those who doubted it. Edward Prescott and Finn Kydland: For jointly developing and popularizing “Real Business Cycle” theory, which by omitting the role of credit greatly diminished the economics profession’s understanding of dynamic macroeconomic processes. Paul Samuelson: Through his textbook Economics: An Introductory Analysis (19 English language editions and translated into 40 languages), he popularized neoclassical economics, contributing more than any other economist to its diffusion and thereby to the deregulation of financial markets which made possible the GFC. Larry Summers: As US Secretary of the Treasury (formerly an economist at Harvard and the World Bank), he worked successfully for the repeal of the Glass-Steagall Act, which since the Great Crash of 1929 had kept deposit banking separate from casino banking. He also worked with Greenspan and Wall Street interests to torpedo efforts to regulate derivatives.	zqwerty (97)
855612	2010-02-05 08:25:00	I must say,I never thought that the top thinkers of the day,would get it so wrong and that greed would play such a large part in the downfall of the economic system. Lot of rethinking going on.	Cicero (40)
855613	2010-02-05 08:40:00	(snip) Milton Friedman: He propagated the delusion, through his misunderstanding of the scientific method, that an economy can be accurately modeled using counterfactual propositions about its nature. This, together with his simplistic model of money, encouraged the development of the financial theories with unrealistic assumptions that facilitated the GFC. In short, he opened the door for everyone subsequently to theorize without fear of having to be attached to reality. (snip) I was amused at a meeting a year or so ago to hear a University of Canterbury scientist scathingly dismiss economists' claims that economics is a science and that they use scientific methodology. His scorn was palpable - even the notion that economics could be a science was laughable. Perhaps that is why Friedman so appeals to intellectual pygmies like Thatcher, Reagan, Douglas, Richardson and Kerr... His simplistic analysis brings economics down to their level. Their greed is "justified" by a so-called scientific theory and they can sleep straight in bed at night.	John H (8)
855614	2010-02-05 08:47:00	Some gems from my bookmarks: "Greenspan - I was wrong about the economy." www.guardian.co.uk "Death Agony of Thatcherism Deregulated Financial System Model " www.marketoracle.co.uk .....and somewhere, when I can find it, some classic postulating by Don Brash when Reserve Bank Governor in some speech to the BRT how it doesn't matter about getting into deficit because at the end of the day the books can be made to balance.	Terry Porritt (14)
855615	2010-02-05 09:18:00	Thanks for those links Terry	zqwerty (97)
855616	2010-02-05 09:30:00	Ooooh,lots of gloating from the reds. And your perfect system would be?	Cicero (40)
855617	2010-02-05 09:41:00	"Those who know, do not speak. Those who speak, do not know." — The Tao	zqwerty (97)
855618	2010-02-05 09:42:00	Here is a list of the originators of the idiotic theories that New Zealand governments have been following for the last 25 years, just read what I have copied from here (www.metafilter.com) and don't bother with the link if you have limited attention span. Check especially the Alan Greenspan paragraph where I have italicized. Fischer Black and Myron Scholes: They jointly developed the Black-Scholes model which led to the explosive growth of financial derivatives. The importance given to their hypothetical calculation of derivative prices was baneful not just because it was bogus, but also because it meant that relevant and often urgent real-world economic research was widely neglected by the profession. Eugene Fama: His “efficient market theory” provided the moral umbrella for all sorts of greed, predatory behaviour and incompetent corporate management. It also provided the rationale for deregulation. And his theory’s widespread acceptance meant that “discussion of investor irrationality, of bubbles, of destructive speculation had virtually disappeared from academic discourse.” In these three ways Fama’s work created the environment which made possible the GFC. Milton Friedman: He propagated the delusion, through his misunderstanding of the scientific method, that an economy can be accurately modeled using counterfactual propositions about its nature. This, together with his simplistic model of money, encouraged the development of the financial theories with unrealistic assumptions that facilitated the GFC. In short, he opened the door for everyone subsequently to theorize without fear of having to be attached to reality. Alan Greenspan: As Chairman of the Federal Reserve System from 1987 to 2006, he both led the over expansion of money and credit that created the bubble that burst and aggressively promoted the view that financial markets are naturally efficient and in no need of regulation. Before a Congressional committee on 28 October 2008 Greenspan confessed that his theoretical beliefs of 40 years were now proven to be without foundation, hence his total confusion and failure at his job. Assar Lindbeck: By working to make the Riksbank Prize in Economic Sciences (“Nobel Prize in Economics”) almost exclusively a prize for neoclassical economists, this Swedish economist has contributed significantly to the conversion of the economics profession and of world public opinion to market fundamentalism. Robert Lucas: His development of the rational expectations hypothesis, which defined rationality as the capacity to accurately predict the future, both served to maintain Friedman’s proposition that monetary factors do not affect the real economy and, in the name of “rigor”, distanced economics even further from reality than Friedman had thought possible. Richard Portes: As Secretary-General of the Royal Economic Society from 1992-2008, he helped suppress worries expressed by non-mainstream economists about developments in the financial sector. In 2007 he wrote a Report for the Icelandic Chamber of Commerce giving a clean bill of health to Icelandic banks only a few months before they collapsed. When investigators called attention to the real state of Icelandic banking, he wrote a series of letters to the Financial Times defending the soundness of Icelandic banks and imputing professional incompetence to those who doubted it. Edward Prescott and Finn Kydland: For jointly developing and popularizing “Real Business Cycle” theory, which by omitting the role of credit greatly diminished the economics profession’s understanding of dynamic macroeconomic processes. Paul Samuelson: Through his textbook Economics: An Introductory Analysis (19 English language editions and translated into 40 languages), he popularized neoclassical economics, contributing more than any other economist to its diffusion and thereby to the deregulation of financial markets which made possible the GFC. Larry Summers: As US Secretary of the Treasury (formerly an economist at Harvard and the World Bank), he worked successfully for the repeal of the Glass-Steagall Act, which since the Great Crash of 1929 had kept deposit banking separate from casino banking. He also worked with Greenspan and Wall Street interests to torpedo efforts to regulate derivatives. Above list may have its problems when things dont go according to the economic plans. Other way is the sterling economics plans like North Korea and Cuba.	prefect (6291)
855619	2010-02-05 18:39:00	Above list may have its problems when things dont go according to the economic plans. Other way is the sterling economics plans like North Korea and Cuba. Our leftie friends totaly ignore how well our Cuban pals are doing! The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries. Winston Churchill	Cicero (40)
855620	2010-02-06 06:18:00	Typical kneejerk response from Cicero. If you don't like an argument start throwing around terms like leftie. Who said North Korea and Cuba were models to follow? Martynz	martynz (5445)
1 2