As reg­u­lar read­ers of this blog know, I argue that the dom­i­nant school of thought in eco­nom­ics, “Neo­clas­si­cal eco­nom­ics”, is not only inca­pable of explain­ing this cri­sis, but actu­al­ly helped con­tribute to it by its delud­ed analy­ses of finance and mon­ey.

I wrote Debunk­ing Eco­nom­ics eight years ago to explain why Neo­clas­si­cal eco­nom­ics was inher­ent­ly flawed and should be aban­doned. In that book I was mere­ly col­lat­ing the many com­pelling cri­tiques that have been devel­oped by econ­o­mists of this the­o­ry over the years, that this school of thought has blithe­ly ignored (I unex­pect­ed­ly added one of my own, cri­tiquing the the­o­ry of the firm, and also dis­cussed flaws in con­ven­tion­al Marx­i­an eco­nom­ics, but that’s by the bye here).

Front­line is run­ning a spe­cial on the finan­cial cri­sis:

http://www.pbs.org/wgbh/pages/frontline/meltdown/

It should make inter­est­ing view­ing. It will be avail­able from 9pm New York time on Feb­ru­ary 17th–which I think means mid­day or there­abouts on the 20th, Syd­ney time.

I’m off to work with the CSIRO for a few days on mod­el­ling, and I may not be able to keep up with blog com­ments as well as I’d like to.

I’ve also had a cor­re­spon­dent who is pre­vent­ed from post­ing to the blog by a too-strict Inter­net cen­sor­ing pol­i­cy in the coun­try he’s cur­rent­ly in. I sug­gest­ed that per­haps some­one on the blog would be will­ing to “shad­ow” for him: i.e., sign on to the blog with an addi­tion­al alias, and copy any emails from him as posts to the site.

The cal­en­dar wid­get that I’ve added the the site recent­ly (see the left hand side bar below the login sec­tion) is great, but has an annoy­ing bug: it gets the date right, but the day of the week wrong.

My guess is that this reflects if US ori­gins, and the author has set it up on US time only. Since the USA is a day behind Aus­tralia, while the actu­al cal­en­dar is cor­rect, all the days are shown as the day before in the text pop­ups.

So today’s talks (on THURSDAY Feb­ru­ary 12th) are shown as tak­ing place on Wednes­day Feb­ru­ary 12th when you click on the date.

I’ve recent­ly added a Cal­en­dar wid­get to the blog–just below the login wid­get on the left hand side.

I will use it to main­tain a cal­en­dar of upcom­ing pub­lic events–and also con­fer­ences where I am speaking–as well as media cov­er­age, if I get enough notice of it. The wid­get is very well designed–days coloured red to indi­cate an activ­i­ty; hov­er over a high­light­ed day to see a sum­ma­ry; click on the date to get full details.

The first event there is a dis­cus­sion about the cri­sis on the Sky News Pro­gram “On the Record”, at 8am this morn­ing.

There’s an inter­est­ing post on the Atlantic by Jim Manzi, Stim­u­lus pre­dic­tions: put up or shut up, that calls on econ­o­mists who are mak­ing pre­dic­tions about what Oba­ma’s stim­u­lus pack­age will or won’t do to present their mod­els on which these pre­dic­tions are based.

In part, he says:

Today Tonight’s James Thomas put togeth­er “Chang­ing Times”, an excel­lent pro­gram on what a Depres­sion is like, and the dan­ger that we may be fac­ing one today.

The cen­tre­piece of the sto­ry was an inter­view with Eric Aarons, who at almost 90, lived through the Great Depres­sion. His rec­ol­lec­tions frame an item that includes archival footage of the then Labor Par­ty Prime Min­is­ter Scullin describ­ing the tur­moil of 1929 with the words “Aus­tralia is fac­ing today the gravest finan­cial cri­sis in its his­to­ry”.

Plus ca change…

If you haven’t seen Chang­ing Times yet, please do so.

“Economists are the forgotten guilty men

Academics — and their mad theories — are to blame for the financial crisis. They too deserve to be hauled into the dock”

So begins Ana­tole Kalet­sky’s essay in The Times for Feb­ru­ary 5 2009. He is spot on. Eco­nom­ic the­o­ry played a direct role in this cri­sis, by legit­imis­ing the dereg­u­la­tion of finance and encour­ag­ing the prof­li­gate lend­ing of finan­cial insti­tu­tions. There is much more that is wrong with the the­o­ry that dom­i­nates aca­d­e­m­ic economics–known as “neo­clas­si­cal economics”–enough to fill sev­er­al books. My Debunk­ing Eco­nom­ics : the naked emper­or of the social sci­ences was one such book; in it I tried to explain all the tech­ni­cal flaws in eco­nom­ic the­o­ry to a non-math­e­mat­i­cal audi­ence.

The Today Tonight seg­ment has been delayed till this evening (Wednes­day Feb­ru­ary 4th)–which is a pity in a way because I will also be speak­ing at a pub­lic forum tonight at Cir­cu­lar Quay organ­ised by the Prop­er­ty Knowl­edge Forum: An excerpt from the pro­mo­tion­al fly­er:

ARE WE HEADING FOR A DEPRESSION?

When will the bot­tom hit? Are we in store for 40% drops in prop­er­ty or has the recov­ery already begun?