Robert Lucas, one of the greatest macroeconomists of his generation, and his followers are “making ancient and basic analytical errors all over the place”. Harvard’s Robert Barro, another towering figure in the discipline, is “making truly boneheaded arguments”. The past 30 years of macroeconomics training at American and British universities were a “costly waste of time”.Podcasts and slides for Krugman's Lionel Robbins lectures.
To the uninitiated, economics has always been a dismal science. But all these attacks come from within the guild: from Brad DeLong of the University of California, Berkeley; Paul Krugman of Princeton and the New York Times; and Willem Buiter of the London School of Economics (LSE), respectively. The macroeconomic crisis of the past two years is also provoking a crisis of confidence in macroeconomics. In the last of his Lionel Robbins lectures at the LSE on June 10th, Mr Krugman feared that most macroeconomics of the past 30 years was “spectacularly useless at best, and positively harmful at worst”.
More precisely, I feel that genuine productivity should be rewarded. Value creation should be rewarded. Not "shareholder value," but real value; as in the difference between raw materials and a finished product, or between someone who is sick and someone who is healthy, or between a blank page and a sonnet...like earlier this year simon johnson was saying: "the American financial industry gained political power by amassing a kind of cultural capital—a belief system." this is now being put to the test (on a number of fronts) as andrew sullivan concludes in The Rotten Core:
I view the financial system as part of the "gears" of society, like (say) garbage collection. There is nothing wrong with being a garbage collector; it is a necessary function. But they will never be paid as much as the top innovators and producers. Neither should those in the financial sector, in my opinion.
That we, as a society, give so much of our wealth to people for doing approximately nothing represents a serious market failure, in my view.
Obama is, in some ways, a test-case.hopefully, then, we all can pass...
He was elected on a clear platform of reform and change; and yet the only real achievement Washington has allowed him so far is a massive stimulus package to prevent a Second Great Depression (and even on that emergency measure, no Republicans would support him). On that he succeeded. But that wasn't reform; it was a crash landing after one of the worst administrations in America's history.
Real reform - tackling health care costs and access, finding a way to head off massive changes in the world's climate, ending torture as the lynchpin of the war on terror, getting out of Iraq, preventing an Israeli-led Third World War in the Middle East, and reforming entitlements and defense spending to prevent 21st century America from becoming 17th Century Spain: these are being resisted by those who have power and do not want to relinquish it - except to their own families and cronies.
Nepotism is part of the problem; media corruption is also part; the total uselessness of the Democratic party and the nihilism of the Republicans doesn't help. But something is rotten in America at this moment in time; and those of us who supported Obama to try and change this decay and decline should use this fall to get off our butts and fight for change.
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I have taken many an economics course in my life and my fundamental problem with economics goes back to a professor in college who argued with me that a lower priced hamburger at McDonalds will always win out over a slightly more expensive chicken sandwich at Wendy's, regardless if I wanted the chicken or not. In his world, the models of elasticity of demand and supply+demand curves ruled all. He made little space for that major fudge-factor known as...humanity.
posted by tgrundke at 8:07 PM on September 3, 2009 [2 favorites]