Steve Keen at GoogleTalks 2012 (video)

[stockholmer]

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John Harvey on Neoclassical Economics causing the Economic Crisis

http://www.debtdeflation.com/blogs/2012/02/06/john-harvey-on-neoclassical-economics-causing-the-economic-crisis/

John T. Harvey is Professor of Economics at Texas Christian University and a leading non-neoclassical economist. He is doing his bit to raise awareness of alternative approaches to economics via a blog that is published by Forbes Magazine. John explains his motivation for establishing this blog as follows:

I am a firm believer that economics can and must be made understandable to the general public, but that our discipline has done a very poor job in this regard. This is particularly true of macro issues, where people quite naturally assume that their personal experiences are analogous to those at the national scale. Very often, this is not the case, with the result that politicians and voters (and some economists) press for policies whose effects are quite the opposite of what was intended. That this is problematic has never been more evident than today. I also try to steer as clear of politics as possible. I want to explain how things work, not what you should believe.

John’s most recent blog entry http://www.forbes.com/sites/johntharvey/2012/02/06/economics-crisis/ takes aim at one of my favourite targets: neoclassical economists and their role in blindly leading the world into the biggest financial crisis since the Great Depression. He notes that “economists were the ones who provided the intellectual justification for the transformation of our economy over the past thirty years”, and shows just how bizarre their ideas are.

When asked what was most important to success as an economist, students ranked these skills in this order:


1. Being smart in the sense of being good at problem solving.
2. Excellence in mathematics.
3. Being very knowledgeable about one particular field.
4. Ability to make connections with prominent professors.
5. Being interested in, and being good at, empirical research.
6. Having a broad knowledge of the economics literature.
7. Having a thorough knowledge of the economy.


snip

[jtuck004]

1. These lines from "Real Genius" come floating back...

"Chris: Yes, Mitch. He cracked, severely.
Mitch: Why?
Chris: He loved his work.
Mitch: Well what’s wrong with that.
Chris: There’s nothing wrong with that, but that’s all he did. He loved solving problems, he loved coming up with the answers. But, he thought that the answers were the answer for everything. Wrong. All Science no Philosophy. So then one day someone tells him that the stuff he’s making was killing people."


But that's what we reward. We tell people that the list at the end of the OP is the recipe for success in life, and that probably holds true in the financial world like no other. Then we piss and moan that they did exactly what we rewarded them for in life and in school, and expect them to act differently.

ha. (Did you ever wonder whether it is malpractice if you don't advise kids that if they want to be something other than indentured servants they should go into finance and fuck the rest of us? Think that's harsh? Since our full employment won't be back until at least 2020 - that's eight years from now, for those of you that are 52 and unemployed - some people around us have worked the last job they will ever have. Now that's harsh.)

Because the government is now staffed with highly-placed people, many of whom were trained by and stand on the side of the investment banks and the wealthy, and are determined to rig the game in their favor (against the long-term best interests of this country), there is likely no regulatory solution possible.

The only real defense to this is for the rest of us to understand and practice gaining control of assets and running them for the long-term, in our own best interests, educating our neighbors as to why, avoiding the temptations of quick profits, and using the power of populism to fight against over-leveraged and short-term-profit motivated corporations.

Good luck with that one.

[stockholmer]

2. you are oh so right, unfortunately

"Because the government is now staffed with highly-placed people, many of whom were trained by and stand on the side of the investment banks and the wealthy, and are determined to rig the game in their favor (against the long-term best interests of this country), there is likely no regulatory solution possible."

[girl gone mad]

3. Thanks for posting this.