Unlike most of you, I am not an academic economist. Rather, I have a practitioner's degree: a masters in Finance from MIT, and work experience in both commercial and investment banking. If I had to put my finger on a single diagnosis, I'd say that the profession has neglected human agency in favor of general equilibrium and perfect competition assumptions in its models. Make no mistake, my education got this wrong too, but I have been forced by events to alter my beliefs.
Consider Goldman Sachs' alumni in both the past and current administrations and the fact that they are known to run their proprietary trading desk for many, many days without incurring a losing day -- something statistically highly improbable. Or, consider the speed and ease with which TARP got passed relative to healthcare reform. These are just a few of many possible examples. Here's an interesting book (http://www.hollings.org/Content/Beter-TheConspiracyAgainstTheDollar.pdf ) by a Washington attorney who worked for many years as General Counsel at the ExImBank (as I recall). In this capacity he saw many deals come together and how the game of global finance was played. Peter Hollings -----Original Message----- From: [email protected] [mailto:[email protected]] On Behalf Of michael perelman Sent: Friday, September 17, 2010 12:22 AM To: Progressive Economics Subject: [Pen-l] Economics Detox Program Cassidy, John. 2009. How Markets Fail: The Logic of Economic Calamities (New York: Farrar, Straus and Giroux). 105: "In 1996, when I set out to research an article for The New Yorker about the state of economics, I came across a lot of unhappiness and criticism. The economics department at Morgan Stanley, for example, was refusing to hire any economics Ph.D.s unless they had experience outside of academe. "We insist on at least a three-to-four-year cleansing experience to neutralize the brainwashing that takes place in these graduate programs," Stephen S. Roach, the firm's chief economist, told me. "Academic economics has taken a very bad turn in the road," Mark Dadd, who was then the top economist at AT&T and the chairman or the National Association for Business Economics, said. "It's very academic, very mathematical, and it really doesn't -- I want to choose my words carefully here: it is nothing like as useful to the business community as it could be." -- Michael Perelman Economics Department California State University Chico, CA 95929 530 898 5321 fax 530 898 5901 http://michaelperelman.wordpress.com _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
