Matias Vernengo — The rise of vulgar economics and the end of dissent

And the decline in debate explains why Lucas could say in the early 1980s that: "at research seminars, people don't take Keynesian theorizing seriously anymore; the audience starts to whisper and giggle to one another." And also why if you wanted to publish you basically had to accept the crazy New Classical models. Krugman admitted to that before, as I've already noticed. He argued that: “the only way to get non-crazy macroeconomics published was to wrap sensible assumptions about output and employment in something else, something that involved rational expectations and intertemporal stuff and made the paper respectable.” You must remember, you don't publish, you don't get tenure. So crazy models became the norm.

Krugman also told Bernard Lietaer that discussing the monetary system is a surefire way to get turned out of the club.

Lietaer provided another personal anecdote in support of this unseen lobby theme: A conversation one day with Paul Krugman. Both of them are graduates of MIT, having studied there under the same professors. Krugman asked him, “Didn’t they warn you about not touching the monetary system? If you insist on talking about it, it will kill you academically. It takes a university economist completely out of the system of peer approvals that culminates for a few in the prize given by the central bank of Sweden in honor of Alfred Nobel.” (The System has deftly transformed that award for monetary orthodoxy into one that is popularly conceived as “the Nobel Prize for Economics”.) 

Thus an important aspect of the unseen lobby is an academic taboo. The problem is not that no alternatives to The System have been contemplated by innovative thinkers. The possibility that governments should keep the right of creating money as a sovereign power to be administered through a democratic system has been explored regularly by non-conforming investigators. The existing system is an outgrowth of the idea that money was essentially a coin representing the value in exchange of a precious metal. That is where stories about goldsmiths and lending paper representations of gold in excess of what they actually had come from. “Metallism” is a doctrine that banks should have a reserve of precious metals to back the money (credit) that they issue. A contrasting view that governments have the power to guarantee value to pieces of paper or figures in a book without promising payment in precious metal is called “chartalism” or “cartalism”. A very important observation made by Lietaer in the video lecture is that chartalism has never been academically challenged. In other words, the taboo is effective as an instrument of the unseen lobby. 

Lietaer did add that the academic home of chartalism is the University of Missouri at Kansas City. Professors there do develop its themes and ramifications, but the academic screen of orthodoxy keeps their ideas carefully filtered from the advice received by Presidents and their Councils of Economic Advisers. A reinforcing anecdote relative to the taboo and lobby was related to me by Michael Hudson, one of whose titles is “Distinguished Research Professor of Economics, UMKC”. I once asked him what kinds of challenges he receives from other economists to his views. He replied that he doesn’t get any. “They know I am right, and they concede it, but then go back to business as usual ‘because it’s a job’.” — source

Going along to get along, even when you know that it’s basically bullshit is flat-out spineless hypocrisy.

Naked Keynesianism
The rise of vulgar economics and the end of dissentMatias Vernengo | Associate Professor of Economics, Bucknell University

See also Michael Perelman, The Power of Economics vs. The Economics of Power