What utter self-serv­ing dri­vel, Brad Delong!

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I can scarcely believe what Brad Delong has dared to pub­lish on Project Syn­di­cate today:

We econ­o­mists who are steeped in eco­nomic and finan­cial his­tory – and aware of the his­tory of eco­nomic thought con­cern­ing finan­cial crises and their effects – have rea­son to be proud of our analy­ses over the past five years. We under­stood where we were head­ing, because we knew where we had been.

In par­tic­u­lar, we under­stood that the rapid run-up of house prices, cou­pled with the exten­sion of lever­age, posed macro­eco­nomic dan­gers. We rec­og­nized that large bub­ble-dri­ven losses in assets held by lever­aged finan­cial insti­tu­tions would cause a pan­icked flight to safety, and that pre­vent­ing a deep depres­sion required active offi­cial inter­ven­tion as a lender of last resort.…

So the big les­son is sim­ple: trust those who work in the tra­di­tion of Wal­ter Bage­hot, Hyman Min­sky, and Charles Kindle­berger. That means trust­ing econ­o­mists like Paul Krug­man, Paul Romer, Gary Gor­ton, Car­men Rein­hart, Ken Rogoff, Raghu­ram Rajan, Larry Sum­mers, Barry Eichen­green, Olivier Blan­chard, and their peers. Just as they got the recent past right, so they are the ones most likely to get the dis­tri­b­u­tion of pos­si­ble futures right.

What utter hubris and dri­vel!

Where to begin? For starters, “the last five years” includes June 2007–just before the com­mence­ment of the finan­cial cri­sis. But this time, peo­ple like Wynne God­ley, Ann Pet­ti­fors, Ran­dall Wray, Nouriel Roubini, Dean Baker, Peter Schiff and I had spent years warn­ing that a huge cri­sis was com­ing, and had a vari­ety of debt-based expla­na­tions as to why it was inevitable. By then, God­ley, Wray and I and many other Post Key­ne­sian econ­o­mists had spent decades imbib­ing and devel­op­ing the work of Hyman Min­sky.

To my knowl­edge, of Delong’s mot­ley crew, only Raghu­ram Rajan was in print with any warn­ings of an immi­nent cri­sis before it began. Blan­chard deserves to win an award for one of the world’s worst-timed papers when in August 12, 2008–one year after the cri­sis began–he pub­lished a work­ing paper which crowed that “the state of macro is good”. Krug­man, who Delong crowns as first amongst equals in those work­ing “in the tra­di­tion of Wal­ter Bage­hot, Hyman Min­sky, and Charles Kindle­berger” first read Min­sky in May 2009–and noted that he didn’t really see what all the fuss was about:

So I’m actu­ally read­ing Hyman Minsky’s mag­num opus, here in Seoul. … I have to say that the Pla­tonic ideal of Min­sky is a lot bet­ter than the real­ity.

There’s a deep insight in there; both the con­cept of finan­cial fragility and his insight, way ahead of any­one else, that as the mem­ory of the Depres­sion faded the sys­tem was in fact becom­ing more frag­ile. But that insight takes up part of Chap­ter 9. The rest is a long slog through turgid writ­ing, Kaleck­ian income dis­tri­b­u­tion the­ory (which I don’t think has any­thing to do with the fun­da­men­tal point), and more.

To be fair, it took me sev­eral decades before I learned to appre­ci­ate Keynes in the orig­i­nal. Maybe a reread will make me see the depths of Minsky’s insight across the board. Or maybe not.

This was hardly amaz­ing to those of us who had started to read Min­sky a bit ear­lier than 2009–such as me for exam­ple (I first read Minsky’s real mag­num opus, John May­nard Keynes, in 1987). Those of us with a bit more expo­sure to Min­sky knew that Sta­bi­liz­ing an Unsta­ble Econ­omy was not Minsky’s best book–and I com­mented on Krugman’s blog that he should put it aside and read Can “It” Hap­pen Again? when he got back from Seoul.

The only excuse for the cant Delong has spewed forth today is that, as with Krug­man and oth­ers in the self-described “New Key­ne­sian” camp, he per­ceives him­self as being at the left end of the eco­nomic spec­trum, with the only com­pe­ti­tion being from the far right rep­re­sented by the purist Chicago ver­sion of Neo­clas­si­cal eco­nom­ics. Since the Neo­clas­si­cal left sup­ports deficit spend­ing dur­ing a Depres­sion, while the right sup­ports aus­ter­ity, to Delong it’s game over, and the Neo­clas­si­cal left is right.

The real­ity is that there is an entire other dimen­sion of econ­o­mists who have known for decades that both extremes of the Neo­clas­si­cal eco­nomic axis were nei­ther left nor right, but plain bloody wrong. We also knew that our crit­i­cisms of the Neo­clas­si­cals had no chance of being lis­tened to by the pub­lic until a major cri­sis hit, and we also expected that this cri­sis would do noth­ing to alter their own beliefs. Delong’s delu­sional mut­ter­ings today con­firm it.

I some­times get accused of being harsh when I argue that eco­nom­ics will only progress from the delu­sion of Neo­clas­si­cal eco­nom­ics into a more empir­i­cally based and real­is­tic dis­ci­pline the way that Max Planck observed that physics made the move from Maxwell to Ein­stein: “one funeral at a time”. I doubt that I’ll cop that crit­i­cism any more after Brad’s effort today.

About Steve Keen

I am Professor of Economics and Head of Economics, History and Politics at Kingston University London, and a long time critic of conventional economic thought. As well as attacking mainstream thought in Debunking Economics, I am also developing an alternative dynamic approach to economic modelling. The key issue I am tackling here is the prospect for a debt-deflation on the back of the enormous private debts accumulated globally, and our very low rate of inflation.
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  • You don’t know the his­tory of eco­nomic thought well enough RJ. Revi­sion­ism like this is what derailed Keynes in the first place, with Hicks’s so-called book review in 1937 com­pletely scut­tling Keynes’s attempt to shift eco­nom­ics away from Wal­rasian gen­eral equi­lib­rium towards a mon­e­tary the­ory. I’m not going to let that hap­pen again–and revi­sion­ism like this, claim­ing the cloak of Min­sky for avowedly Wal­rasian thinkers, is part of the same process in our times. It’s not ego, it’s knowl­edge of a long his­tory of the devel­op­ment of eco­nomic the­ory.

  • RJ

    Damien Mearns
    June 30, 2012 at 9:29 pm | # 

    Profit = Fixed Assets + Pri­vate Debt + Gov­ern­ment Debt + Debt of For­eign­ers.”

    Or maybe

    Profit = Net Fixed Assets + Pri­vate Debt + Gov­ern­ment Debt + trade sur­plus (- trade deficit).”

  • imper­ma­nence

    Intel­lec­tu­als need to under­stand that there is no right, although there is cer­tainly a greater wrong.

    Although under­stand­ing the lim­its of what can be known is always a great start­ing point, eco­nom­ics has been politi­cized light-years beyond any other pro­fes­sional field because of its amor­phous nature.

    Since nobody can be exactly right, how easy it is to be wrong for fun and profit!

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  • Steve Hum­mel

    @Steve Keen,

    I com­pletely agree with you that the his­tory of eco­nomic thought is rife with revisionism.…and worse. I chal­lenge you to inves­ti­gate Dou­glas based on his actual ECONOMIC AND ACCOUNTING writ­ings (and not on his irrel­e­vant to the for­mer, per­haps cul­tur­ally derived opin­ions) I and Dou­glas, in a very sim­i­lar way that you indeed are mar­gin­al­ized by the cur­rently con­nected and overly ortho­dox, were “dis­pensed with” by a few here as a cur­rency crank and as some­one unaware of the “valid­ity” of the quan­tity the­ory of money and the veloc­ity of its circulation.…the first of which is com­pletely untrue and the sec­ond of which is only an apparency cloak­ing the deeper and more embed­ded and rel­e­vant cost account­ing cycle of money.

    You don’t even need to agree with the above the­o­ries actu­ally, but with your (wise) call for a mod­ern debt jubilee there is a nascent recog­ni­tion of the ACTUAL mech­a­nisms for the solu­tions to our cri­sis and to the sta­bi­liza­tion of the econ­omy in perpetuity.…which just hap­pen to be Douglas’s exact means of solv­ing the under­ly­ing prob­lems. Now the re-dis­cov­er­ing of this fact and the re-habil­i­ta­tion of Douglas’s stature would indeed be a tri­umph of his­tor­i­cal research over ortho­doxy and other human foibles. All you have is the truth and bro­ken straws to build the future against the self inter­ests of every elite.….but the truth is a mighty anvil.

  • Steve Hum­mel

    Damien,

    Keep men­tally punch­ing with the “mun­dane” accoun­tancy obser­va­tions. Its very effec­tive, and also expresses the truth­ful­ness of the fol­low­ing valid human psy­cho­log­i­cal insight:

    But God has cho­sen the fool­ish things of the world to con­found the wise; and God has cho­sen the weak things of the world to con­found the things which are mighty;” I Cor. 1:27

  • Thanks Steve H, RJ yes you can put it like that (if you include income from assets held abroad as part of the trade deficit). In the National Accounts they have a drill down whereby they have Gov debt split into National and Local Gov and there are other drill downs as well — so you can re-arrange it a bit and show more detail — and yes I mean “Net Assets” — after depre­ci­a­tion when I say just “Assets” — they are tech­ni­cally called “Non Finan­cial Assets” in the Blue Book (Ref “AN Non-finan­cial assets CGDB + “AN Non-finan­cial assets CGES” in Blue Book speak)
    Do a Goolge search for the “Sisy­phus equa­tion” and you can get to see this for­mula match the National Accounts of the UK every year : eg In 2002 in the change in the num­bers was, for the year, :
    The Net Fixed Assets of Busi­ness £48,900 Mil­lion Up
    House­hold Debt was was £361,300 Mil­lion Up
    Gov­ern­ment Debt was £17,600 Mil­lion Up
    For­eign­ers Debt was £16,500 Mil­lion Up
    These num­bers add up to £444,300 Mil­lion

    The Net Retained Profit of Busi­ness in the same year, all accord­ing to the National Accounts Blue Book was : £444,300 Mil­lion — These num­bers are joined at the hip, and they add up to each other every year — because that’s the equa­tion of the econ­omy. As short form of it is : Prof­its of Busi­ness = Fixed assets + Debt of every­one else to the busi­ness (mainly the bank­ing world) — So the way we have it set up is suc­cess­ful busi­ness causes finan­cial cat­a­stro­phe ! — This is not the fault of busi­ness — the finan­cial sys­tem itself is fun­da­men­tally wrong : Money is not an accu­rate rep­re­sen­ta­tion of real­ity. Instead of mov­ing away from 80 years of Keynes being fash­ion­able to 80 years of Min­ski being fash­ion­able can we just add up the num­bers in the National cash reg­is­ter at the end of the day and get that right first ?

  • Brad DeLong

    Blan­chard and Sum­mers (along with Eichen­green and Kindle­berger) taught me Bage­hot-Min­sky-Kindle­berger. And they have been the senior pol­i­cy­mak­ers lead­ing the charge for more expan­sion­ary poli­cies. (And Larry has this nice line about how the best analy­ses of 2007–9 are writ­ten by Bage­hot, Min­sky, and Kindle­berger.) They belong on the list.

  • They might belong on your list of peo­ple who influ­enced you Brad; whether his­tory will judge that they are the ones to turn to for macro­eco­nom­ics in gen­eral is, I think, rather less likely.

    My sug­ges­tion of a sem­i­nar between NK and PK experts on Min­sky remains open.

  • Steve Hum­mel

    Replay­ing your video it’s appar­ent that we must either aban­don cap­i­tal­ism or change the con­sumer finan­cial par­a­digm. The for­mer is a poor option. Marx, even though his cri­tiques of cap­i­tal­ism, pri­mar­ily finance cap­i­tal­ism are quite spot on, is in the end a reac­tionary the­o­rist. Chang­ing the con­sumer finan­cial par­a­digm how­ever is an evo­lu­tion, not a rev­o­lu­tion, of profit mak­ing sys­tems and retains and enables both the indi­vid­ual free­doms and the eco­nomic dynamism of cap­i­tal­ism. If it actu­ally trans­forms cap­i­tal­ism into Distributism.….what’s in a name?

  • Steve Hum­mel

    That was @ Damien by the way.

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  • RJ

    Damien

    Agree. Govt debt increases result not only in non Govt finan­cial asset increases needed for sav­ings.

    But also allows the non Govt sec­tor to make a profit. As a Govt loss (increased debt) always equals a non Govt profit.

    Yet so many are anti Govt debt increas­ing. Even though for mon­e­tary sov­er­eign Govts it is no more than jour­nal entries

    Unfor­tu­nately most econ­o­mists do not under­stand these basic facts

  • Steve Hum­mel

    I’m call­ing for an inter­na­tional coun­sel for the re-con­sid­er­a­tion of the val­ues our sys­tems are based upon as well as the hier­ar­chies of human thought and expe­ri­ence (and a shit kickin’ inter­na­tional mass move­ment to “encour­age” the same if the call for such an inter­na­tional coun­sel falls on deaf ears). 

    Sci­ence is a won­der­ful and poten­tially beau­ti­ful TOOL of Human­ity, but phi­los­o­phy and the world’s var­i­ous wis­dom tra­di­tions are even more won­der­ful, beau­ti­ful, enlight­en­ing and sys­tem­i­cally and indi­vid­u­ally empow­er­ing than even sci­ence. The crown IS above the brow for actual and pow­er­ful rea­sons.

  • Steve Hum­mel

    Of course “lit­tle ole me” demand­ing this is pre­sump­tu­ous, but the power of mil­lions awak­ened to BOTH their true self inter­ests AND a call to a gen­uine higher pur­pose could actu­ally make the Chi­nese proverb (i.e. wis­dom) “The longest jour­ney begins with the very first step.”.….a work­ing real­ity. Wis­dom, all one needs is faith as in con­fi­dence in it, and the world and its pos­si­bil­i­ties are mag­i­cally trans­formed. I’d say that was a worth­while thing to work toward.

  • Esp Ghia

    This is hilar­i­ous. You guys pre­tend to have a hard-on for Min­sky yet none seem to sub­scribe to MMT?

  • Hi Esp, I’ve had a look at MMT and its not done in book­keep­ing lan­guage, its done in “Uni­ver­sity Eng­lish” so I can’t make much sense of it a it says noth­ing about costs and prices and just takes a few parts of a few bal­ance sheets — “Money” (a part of a Bank’s bal­ance sheet) and Gov­ern­ment Debt and ‘talks’ about them with­out show­ing the effects on every­thing else — it would be great if you could show us a sim­ple worked exam­ple show­ing how it all holds together — a quick Debit- Credit sum­mary of how a sim­ple prod­uct can get made and sold using MMT. This would really move things for­ward.

  • Esp Ghia

    I have only started learn­ing MMT in recent months. Bill Mitchell is Australia’s fore­most expert in the area and has a blog about this. The rea­son I ask the ques­tion is that the MMTers reckon that they are the true Min­skyites and unless you sub­scribe to their views then you don’t really under­stand Min­sky. I will read­ily admit that I am a novice and can­not shed light on this — hence was hop­ing the boffins here could. Thanks for your reply.

  • Hi Steve H — Marx ? No !!! — A total non-starter.
    We need to seri­ously think about things like “How would an advanced Alien Race that had all it’s work done by robots (which is not that far off what we have now) — how would these Aliens get what they wanted ? We need to be look­ing at replac­ing the Finan­cial sys­tem we have with more of a “con­sumer order­ing sys­tem” in order to move more towards what the Aliens must have (well the ones that don’t have a 100% unem­ploy­ment prob­lem any­way).
    Marx — “Labour is the source of all wealth”
    Damien — “Labour is so 15th cen­tury — com­put­erised pro­duc­tion lines make things now-a-days”.
    As a halfway house, if we had some­thing Like “Net Export Finan­cial Sim­u­la­tion” — NEFS where we ‘pre­tended’ (in book­keep­ing terms) to NET Export lots of goods like China does — yet actu­ally not send them abroad for for­eign­ers to enjoy (and pay for on the ‘never never’ — and hence never really pay at all) but to keep them domes­ti­cally and give enough money to the domes­tic peo­ple to buy them — bal­anc­ing the entry by say pre­tend­ing to net export these goods to the planet Mars — and they’ll never pay either) then the ‘econ­omy’ can be as buoy­ant as China’s and we get to keep all the things we make so it is in real terms even richer”.
    You can change the equa­tion :
    Profit = Fixed Assets + Pri­vate Debt + Gov Debt + Foreigner’s Debt
    To
    Profit = Fixed Assets + Pri­vate Debt + Gov Debt + Foreigner’s Debt + ‘Mar­t­ian Debt’
    If China can year upon year give away 40 % of what it makes in exchange for some num­bers in an account some­where – and be ‘rich’ because of it – imag­ine how much richer they would be if they kept these goods for them­selves but still played the same game ‘pre­tend­ing’ to export to Mars so they have enough num­bers ? – and the West could do the same.

    This is easy book­keep­ing to solve the maths prob­lem, after that the next ques­tion is the con­trol prob­lem — Do you want ‘Gov­ern­ment almighty’ who can make up money and spend it (order you about) as much as they want ? — This is why we need directly elected demo­c­ra­tic banks.

  • mikkel fish­man

    Revi­sion­ism like this is what derailed Keynes in the first place”

    Steve [Keen], I can’t con­vey how much of an effect this real­iza­tion has had on my life. It lit­er­ally caused me to quit acad­e­mia, move to another coun­try and become more at peace with the world.

    How?

    I started becom­ing con­cerned that we were in a Min­sky moment in 2005, although his writ­ings were unknown to me, due to a sys­tems based world view. In this respect, the econ­omy is not the merely cause of our prob­lems, but also a symp­tom of peak every­thing on a phys­i­cal level. In any case, I believed (and still do) that the eco­nomic response would be highly influ­en­tial in the scale of war­fare and envi­ron­men­tal col­lapse soon to befall us.

    Hence aca­d­e­mics that saw clearly were charged with the moral duty to pro­vide the intel­lec­tual base and activists must focus on being ready to spread the mes­sage. And so I became con­sumed with that chal­lenge and fret­ful about my role.

    Yet once the cri­sis hit, there was actu­ally no need! It began pre­dictably enough alright: the gnash­ing of teeth and cow­er­ing in the cor­ner by the levers of power and their frac­tal legions of syco­phants was quite impres­sive.

    And yet on some night that I still pin­point, con­trol was acquired once more. It is as if the Ghosts of Eco­nomic Crises Past vis­ited all the Impor­tant Peo­ple in one fell swoop and made them under­stand the True way for­ward. Let us ignore that they all seemed to have been vis­ited by vastly dif­fer­ent ghosts, for appar­ently ide­o­log­i­cal bat­tling main­tains itself across the spec­tral plane.

    And thus came the Exis­ten­tial cri­sis.

    It became all too appar­ent that the world is not guided by per­cep­tion of cor­rect­ness but humil­ity vs. arro­gance. A hum­bling moment indeed.

    And still I grasped the cliff. The arc of the intel­lec­tual uni­verse is long, but surely it bends towards Truth? Per­haps I was just impa­tient. Per­haps the thought lead­ers just needed time to rec­og­nize what was in front of their face, and if not that, then per­haps the pop­u­lace just needed time for new thought lead­ers to emerge…ones that could only do so with bet­ter Under­stand­ing made avail­able.

    Then I saw you make a ref­er­ence to the bas­tardiza­tion of Keynes. This piqued my curios­ity and I read some of his writ­ings and even more intently on his polit­i­cal bat­tles, par­tic­u­larly about the IMF.

    The weight pulled me from the cliff. 

    Keynes under­stand­ing is one of the purest expres­sions of mod­ern whole sys­tem insight and wis­dom put to paper, per­haps only sec­ond to Marx. And when it comes to imple­men­ta­tion from insight, Keynes wins hands down, for not only is it more aligned with the present nature of Man, but he fought to enshrine it into pol­icy.

    His intel­lect, his inher­ent humil­ity and most of all his human­ity had all con­spired to cre­ate works that are a tran­scen­den­tal expres­sion of the self and a force for Good. These are the mes­sages that I took away from his direct writ­ings and strug­gles. It is not that he had all the Answers, for he gave far more: insight that could allow soci­eties to dynam­i­cally dis­cover them.

    And then I com­pared it to what the label of Key­ne­sian eco­nom­ics had become. I am no econ­o­mist so I can­not have an intel­lec­tual argu­ment ref­er­enc­ing papers, but I did read DeLong’s and Krugman’s blogs (and some of their works) as the bea­cons of the move­ment. DeLong isn’t par­tic­u­larly engag­ing, more like a per­ma­nent sorcerer’s appren­tice that is unable to dif­fer­en­ti­ate the dif­fer­ence between the sacred motions and their actual foun­da­tion. Then a defense of Sum­mers caused a bit of vom­it­ing and I haven’t been to his blog since. 

    Krug­man on the other hand is mas­ter­ful and has much to teach, so I fol­lowed him for quite a while. That said, he is merely a mas­ter and not a Bud­dha, which is a shame, espe­cially because he can’t admit it. I was turned off not by his incor­rect per­cep­tion of core insights, but his force­ful rejec­tion that he has fur­ther to progress. I’d be sur­prised if he knew how to use dif­fer­en­tial equa­tions for God’s sake! One time I rejoiced at an equa­tion that con­tained dt as a sign he had finally reached the next plane. After being very con­fused by the rest of the post I even­tu­ally real­ized that d and t were two arbi­trary vari­ables that hap­pened to be next to each other and had noth­ing to do with a dif­fer­en­tial at all.

    His small intel­lec­tual set of tools and his pre­pon­der­ance for sym­bolic manip­u­la­tion com­bine to form opin­ions such as “wealth inequal­ity is imma­te­r­ial for eco­nomic growth” which loses many more points than he gains the entirety of his other work, so I tired of him as well.

    These two lumi­nar­ies of “Key­ne­sian” thought besmirch his name and made me fur­ther ques­tion my belief sys­tem. So I dug fur­ther.

    Again prompted by an offhanded com­ment on either Debt Defla­tion or Naked Cap­i­tal­ism, I started to inves­ti­gate Samuel­son and con­tem­po­raries. What I found was atro­cious. They knew Keynes him­self and took up his man­tle, yet then thor­oughly bas­tardized it into a sys­tem of self con­tra­dic­tions. As orga­nized reli­gion is to its prophets, they were to him. They dehu­man­ized it, demor­al­ized it and twisted it into a sys­tem about con­trol and pre­dic­tion. They removed the dynam­i­cism and the jus­tice. No won­der it became such a favorite of politi­cians!

    With that under­stand­ing all pre­ten­sions on my part fell away and I know longer was deluded about the quest of under­stand­ing or com­mu­ni­ca­tion. I took gave every­thing up and took the first step towards Being instead of Know­ing.

    Also, DeLong and Krug­man are not com­plicit, they are vic­tims. My anger towards them dimin­ished and they were merely tragic, caught in the inevitable spi­ral of his­tory.

    The last bas­tion of eco­nomic under­stand­ing that is still pure was in the Min­sky tra­di­tion, which you and Wray, et al. are treat­ing well. So I remain hope­ful.

    Then I saw this post and could not con­tain myself. I thought I was past this, but a part of me is still cap­tured. I haven’t com­mented on a blog in a long time, let alone a point­lessly long screed. You go far too easy on DeLong, espe­cially in the com­ments.

    He teach­ers have given him a twisted under­stand­ing of his foun­da­tion and he doesn’t seem to be able to under­stand this, but that is no crime, it is just sad. Yet he is merely notic­ing the valid­ity in a com­pet­ing the­ory and instead of a mea culpa and humil­ity to become a stu­dent in that tra­di­tion, he is redefin­ing what it means to jus­tify the cur­rent peo­ple in power! That is dis­gust­ing and a rehash of what was done to Keynes, Marx, and all the great philoso­phers and seers in his­tory, which I per­son­ally believe is the major block that pre­vents social Wis­dom. He is now com­plicit, the moment when the abused becomes an abuser and per­pet­u­ates the cycle.

    This isn’t just some intel­lec­tual exer­cise for me, it is one of my core moral and emo­tional foun­da­tions, which is why this has got­ten to be so long. I just hope beyond hope that he and oth­ers like him real­ize what they are doing and step back.

    On the other hand I hope he is right, for if Sum­mers really is a Min­skyian then it is pos­si­ble that he archi­tected our predica­ment in order to run a grand exper­i­ment that would prove the valid­ity of the hypoth­e­sis. Per­haps in a few years he will issue a 1000 page book describ­ing this exper­i­ment and its empir­i­cal results, once and for all prov­ing that eco­nom­ics can be the hard sci­ence that it feigns to be!

  • math­ieu dufresne

    Here’s Scott Sum­ner :

    Do you think the debt to GDP ratio can increase for­ever?”

    Forever’s a long time. I’d have to say no; after 837,455 years some­thing weird would hap­pen.

    Seri­ously, when peo­ple ask me ques­tions like this I know they are on the wrong track.

    no com­ments…

    http://www.themoneyillusion.com/?p=15116#comments

  • mikkel fish­man

    Steve H

    Sci­ence is a won­der­ful and poten­tially beau­ti­ful TOOL of Human­ity, but phi­los­o­phy and the world’s var­i­ous wis­dom tra­di­tions are even more won­der­ful, beau­ti­ful, enlight­en­ing and sys­tem­i­cally and indi­vid­u­ally empow­er­ing than even sci­ence. ”

    This is a false dichotomy. It’s no acci­dent that Hux­ley, Aldous came from Thomas. Or that Oppen­heimer quoted the Bha­gavad Gita at Trin­ity.

    Sagan’s Comos is as beau­ti­ful as the phys­i­cal one, with a Pale Blue Dot the mod­ern sec­u­lar­ist Ser­mon on the Mount. 

    Although I don’t agree with his guid­ing hypoth­e­sis, George Mobus’ sys­tems thought it highly informed by east­ern phi­los­o­phy and his read­ers would agree that dynamic sys­tems the­ory is a sci­en­tific for­mal­iza­tion of the wis­dom of the Tao and like­minded works.

  • Brad DeLong

    RE: Steve Keen: “Why just 9 names Brad? Was there a word limit that stopped you adding just 2 more ‘Steve Keen’ and ‘Randy Wray’?”

    Ah.

    Now I under­stand why what I write is “utter dri­vel”, “cant”, “spewed forth”, “delu­sional mut­ter­ings”.

    Now I under­stand the extra­or­di­nary venom cou­pled with a com­plete lack of sub­stan­tive crit­i­cisms of any piece of my argu­ment.

    Chill.

    If you call every non-exclu­sive list that doesn’t include you is “utter dri­vel”, you will have to read a lot of utter dri­vel. You will find your­self mocked as a char­ac­ter out of a Monty Python movie. And you will have very lit­tle influ­ence on any­thing.

    My orig­i­nal list was 5: Christy Romer, Gary Gor­ton, Paul Krug­man, Raghu­ram Rajan, and Barry Eichen­green. I stretched it to 9 to be more “broad church”–but 9 is already much too long to include in such a short piece.

    If I were going to stretch it to 20, I would add, in no par­tic­u­lar order: Simon John­son, Jamie Gal­braith, Dean Baker, Maury Obst­feld, Pierre-Olivier Gour­in­chas, Adam Posen, Nouriel Roubini, George Akerlof, Robert Shiller, Michael Wood­ford, and Gauti Eggerts­son.

    But this, too, is a non-exclu­sive list.

  • RickW

    re: Steve Keen
    July 1, 2012 at 2:12 am | #
    You don’t know the his­tory of eco­nomic thought well enough RJ. Revi­sion­ism like this is what derailed Keynes in the first place, with Hicks’s so-called book review in 1937 com­pletely scut­tling Keynes’s attempt to shift eco­nom­ics away from Wal­rasian gen­eral equi­lib­rium towards a mon­e­tary the­ory. I’m not going to let that hap­pen again–and revi­sion­ism like this, claim­ing the cloak of Min­sky for avowedly Wal­rasian thinkers, is part of the same process in our times. It’s not ego, it’s knowl­edge of a long his­tory of the devel­op­ment of eco­nomic the­ory
    End Quote

    Steve
    I can­not add to the elo­quence and pas­sion of Mikkel above but I can also endorse your stand. 

    I agree it is impor­tant aca­d­e­m­i­cally and pro­fes­sion­ally that the insight under­pin­ning your mod­el­ing does not become a half baked com­mon wis­dom that lacks the mathematical/scientific foun­da­tion of your work. 

    A good exam­ple of the now com­mon wis­dom of the impor­tance of pri­vate debt but poorly applied is seen in Krugman’s 2010 paper:
    http://www.princeton.edu/~pkrugman/debt_deleveraging_ge_pk.pdf
    Krug­man did not take a seri­ous inter­est in Min­sky until 2009:
    http://krugman.blogs.nytimes.com/2009/05/19/actually-existing-minsky/
    And then to get on the band­wagon he comes out with a debt model that does not include banks!!!!!!

    I am hope­ful that the day will come when you no longer feel the need to go on the offen­sive but then I agree with your “one funeral at a time” sen­ti­ment.

  • Brad DeLong

    I think it is time to sign off: one can be told only so many times “for eco­nom­ics to progress, you must die”.

    Good­bye.