Well said. In 1929 the then famous economist pronounced that the stock market was going to be stable at its high level.
Many years ago as a graduate student I argued with the mathematical economists that they have perfected ever more precise ways of measuring hypothetical curves. Their answer is that one day we will have the data to show those curves and our measuring tools will come into their own. I gave up on them and wrote my PhD. on a critique of economic theory. (Imperfect and Monopolistic Competition in Historical Perspective) http://en.wikipedia.org/wiki/Irving_Fisher "Fisher was perhaps the first celebrity economist, but his reputation during his lifetime was irreparably harmed by his public statements, just prior to the Wall Street Crash of 1929, claiming that the stock market had reached "a permanently high plateau." -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of Mike Spencer Sent: Monday, November 14, 2011 3:24 AM To: [email protected] Subject: [Futurework] Re: FW: California & Bust > 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/ ^^-^^ _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework _______________________________________________ Futurework mailing list [email protected] https://lists.uwaterloo.ca/mailman/listinfo/futurework
