IT’S THE ECONOMISTS, STUPID.
Posted by PrestoPundit on 09/18/2008
Who’s to blame for the current crisis? As much even as the politicians, it’s the economists who are to blame for the financial crack up — most especially the brain dead macroeconomists who play mathematical games for a living but who have no understanding when it comes to the time / value structure of the economy and the boom and bust cycle this structure can occation when the Fed pushes interest rates below the natural rate. Want to see how dumb they are? Watch one time Fed board member and current Princeton economist Alan Blinder attempt to explain what went wrong with the economy. Essentially Blinder blames it all on “irrational exuberance”, and he indicated all of what has happened has continually caught him by surprise, which would be merely a pathetic joke if Blinder hadn’t played an active role in creating the current crisis. And to top it all off, Blinder is the author of one of the most influential textbooks on monetary policy published in the last 30 years — i.e his views have informed the views of the “thinking class” on macroeconomics as much as anyone over the last three decades. And the current financial crisis is a great tribute to all of the false understanding Blinder has helped pass on to the current generation.
Side note: notice the mathematical notation behind Blinder’s colleague Harrison Hong — the great cargo cult totem of “science” the economists clutch as they stammer to comprehend and explain an unfolding train of events which surprises them with each new movement in the market.
BONUS: Listen to some former Fed governors argue for a new Herbert Hoover / Bush the 1st style RFC / RTC to put a “floor” on the housing market — and bail out the finance industry.