Saturday, August 31, 2013

What The Hell Does This Say About The Difference Between Orthodox Economics and Actual Results?

Commentary by Roger Erickson

Yale economist James Tobin explained that banks don't lend banking reserves 50 years ago.

50 years ago?

Didn't Marriner Eccles & the entire Fed staff make it all implicitly OBVIOUS ~1934?

We had to wait ~30 years for the 1st economist to alert other economists to altered operations?

Be still my beating heart!

And another 50 years for a trickle of economists and economic programs and textbooks to start to notice?

Is the hair standing up on anyone else's neck?

What the hell - INDEED! - does this say about the difference between orthodox economics and actual results? Is the difference between economic theory and operational practice always 100%, not just greater in practice than in theory? And is that by design, or insularity, or insanity ... or all 3?

In economics, progress does NOT occur one funeral at a time! Rather, economics has become immune to reality! Since the forced retirement of Marriner Eccles from the Fed, progress in political economy now requires the death of entire generations of economics textbooks, and Nobel Prize Committees too. Weren't Nobel Prizes supposed to be for practical applications?

When it comes to burning books, maybe we should make an emergency exception for all existing economics text books? Do it as a threat to National Security.

I sincerely hope that the NSA is finally recording THIS commentary!

1 comment:

Roger Erickson said...

best commentary this week

@AAMCommons 8h
"Thank god for artists.
.. Otherwise economists might be able to convince us of rationality."