The Ignoble and Noble Prizes for Economics

For Immediate Release

The Real-World Economics Review Blog is holding polls to determine the awarding of two prizes:

The Ignoble Prize for Economics , to be awarded to the three economists who contributed most to enabling the Global Financial Collapse (GFC), and
The Noble Prize for Economics , to be awarded to the three economists who first and most cogently warned of the coming calamity.

It is accepted fact that the economics profession through its teachings, pronouncements and policy recommendations facilitated the GFC. We also know that danger signs became visible long before the event and that some economists (those with their eyes on the real-world) gave public warnings which if acted upon would have averted the human disaster.

With other learned professions entrusted with public confidence, such as medicine and engineering, it is inconceivable that their professional bodies would not at the very least censure members who had successfully persuaded governments and public opinion to ignore elementary safety measures, so causing epidemics and widespread building collapses.

To date, however, the world’s major economics associations have declined to censure the major facilitators of the GFC or even to publicly identify them. This silence, this indifference to causing human suffering, constitutes grave moral failure. It also gives license to economists to continue to indulge in axiom-happy behaviour. Nor has the economics establishment offered recognition to those economists who were not taken in by fads and fashion and whose competence, if listened to, would have prevented the collapse.

These two silences reveal a continuing moral crisis within the economics profession . The Ignoble and Noble Prizes for Economics are being offered as small first steps towards a cure.

Poll Procedures for the Ignoble Prize for Economics

Stage One: Nominations and Evidence

Nominations for both prizes are open to the international community of economists, rather than limited to a closed and secret shop. For each nominated economist an evidence page will be opened on to which people can leave evidential comments. In this way a documented case for (and against) each candidate will be built up.

I don’t know maybe we should have a prize for ignoble ideas. Efficient markets and rational expectations were pretty much baked into the reform and conservative wings of the profession. To single out Fama or Friedman seems odd. What about Krugman? He has authored how many papers with rational expectations sitting TDC? Progressive liberal economists need to take some blame for having played and purged along to get along. Economists, for the majority, were a pretty cozzy lot before the GFC. I am glad that after the GFC (and for one a faux noble) that some decided to break ranks ATF, but they enabled the general ideological climate as much as any putatively right-wing protagonist of the profession.

Ontario Minimum Wage: Classic Arguments Against

I am not going to wade into the debate on whether the scheduled rather modest minimum wage increases in Ontario are a good thing.  I will, however, with pleasure reproduce this comment by a compassionate petty-proprietor over at the Star:

I have a business that has paid our employees $10.50 an hour to care for children with special needs. Three years ago that wage was good (until they graduated from college) but now its going to be minimum wage? What am I supposed to do, pay more to my employees so I don’t lose them or pay more and I end up making as much as my employees? People take the risk to start businesses to have a shot at the bigger things in life. I have a solid business, but the gov’t is screwing it up – spending my money to get themselves re-elected.

Classic, just a classic.

Global Markets Voice Massive Discontent with Conservative Victory

Global markets woke this morning to news of yet another conservative government in Canada.  Having taken note of the incredible damaged caused to capitalism by neoliberal governments, markets across the globe began a broad based sell-off. The DOW was down nearly 8%, the S&P 500 9%, and the FTSE 100 7 %.  Apparently traders viewed the Canadian election as kind of futures market for the likely outcomes of elections in the US and the UK.

Meanwhile in Toronto the TSX was down over 600 points on the news of a Conservative victory.

When Flaherty was asked what he thought of the markets reaction to his governments victory he is fantasized to have said:  “everyone knows the guys that run those markets are bunch of F***ing raving communists.”  When asked if that meant there would be no fiscal stimulus for the broader economy he is fantasized to have said: “look we already spent our wad on the Banks so the real economy can go F**k itself.”  “ungrateful bastards”

Thoughts on financial crises

I have been searching for days to give words to thoughts on the unfolding financial crises and de-regulation or failure to regulate.  The best I can come up with is this video

There can be no doubt a 50 cal. is very efficient. Maybe it is time that rednecks with advanced math skills stopped running the world eh!  I loved the last line: “No we are not doing that anymore.”

Point is cowboys: when you are palying with a 50 cal. sniper riffle standard safety procedure is not to cut off the left hand tail of the distribution.  The more serious it gets the more precaustion one takes.  QED