> http://www.vanityfair.com/business/features/2011/11/michael-lewis-201111
>From the article:
The richest society the world has ever seen has grown rich by
devising better and better ways to give people what they want. The
effect on the brain of lots of instant gratification is something
like the effect on the right hand of cutting off the left: the
more the lizard core is used the more dominant it becomes. "What
we're doing is minimizing the use of the part of the brain that
lizards don't have," says Whybrow. "We've created physiological
dysfunction. We have lost the ability to self-regulate, at all
levels of the society. The $5 million you get paid at Goldman
Sachs if you do whatever they ask you to do -- that is the
chocolate cake upgraded."
The succession of financial bubbles, and the amassing of personal
and public debt, Whybrow views as simply an expression of the
lizard-brained way of life. A color-coded map of American personal
indebtedness could be laid on top of the Centers for Disease
Control's color-coded map that illustrates the fantastic rise in
rates of obesity across the United States since 1985 without
disturbing the general pattern. The boom in trading activity in
individual stock portfolios; the spread of legalized gambling; the
rise of drug and alcohol addiction -- it is all of a
piece. Everywhere you turn you see Americans sacrifice their
long-term interests for short-term rewards.
Um, right. What does that do to the theory -- no, lets say the notion
-- of "rational expectations"?
http://www.theglobeandmail.com/news/politics/economics-has-met-the-enemy-and-it-is-economics/article2202027/singlepage/
...both these theories tend to ignore what John Maynard Keynes
called the "animal spirits" -- playing down human irrationality,
inefficiency, venality and ignorance. Those are qualities that are
hard to plug into a mathematical equation that purports to model
human behaviour.
These models also have failed to take into account the profound
changes wrought by globalization, and the growing importance of
banks, hedge funds and other financial institutions. Yet they have
successfully provided a "scientific" cover for an anti-regulatory
political agenda that is popular on Wall Street and in some
Washington political circles.
(Ira Basen, G&M Saturday, 15 October 2011, p. F-1 ff.)
and further down, quoting Paul Krugman,
The economics profession went astray because economists, as a group,
mistook beauty for truth...The central cause of the profession's
failure was the desire for an all-encompassing, intellectually elegant
approach that gave economists a chance to show off their mathematical
prowess.
[This quotation is truncated (up to the elipsis) in the on-line
version. I'm quoting from the print copy.]
- Mike
--
Michael Spencer Nova Scotia, Canada .~.
/V\
[email protected] /( )\
http://home.tallships.ca/mspencer/ ^^-^^
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