Ignorant tossers

Few mainstream economists predicted the global financial crash of 2008 and academics have been accused of acting as cheerleaders for the often labyrinthine financial models behind the crisis.

They’ve just awarded the Nobel to Robert Shiller who did precisely that, forecast the housing crash. At the dot com crash before that.

How fucking mainstream is that?

Now a growing band of university students are plotting a quiet revolution against orthodox free-market teaching, arguing that alternative ways of thinking have been pushed to the margins.

Ignorant tossers. Here’s a hint girls and boys. Your university has something called a “library”. Enter it, read the books in it, educate yourselves. That’s what you’re at university for after all, to get you to the point where you educate yourselves, not have the stuff spoon fed to you.

20 comments on “Ignorant tossers

  1. Interesting that the Guardian admit the dumbing down of these courses. If anyone else said that in another context, they would howl with rage and squeal that this is “the best educated generation in history”.

    Mask slipping a bit.

  2. In an article for the New York Times in 2009, Krugman wrote: “As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth.”

    God, Krugman is an arse. If the mathematics is not beautiful – and the mathematics used in economics is the ugliest of any field I know – then it cannot be true.

    Multiple-choice and maths questions dominate the first two years of economics degrees, which Earle said meant most students stayed away from modules that required reading and essay-writing, such as history of economic thought. …. “As a consequence, economics students never develop the faculties necessary to critically question, evaluate and compare economic theories,

    But still, as lame as economic mathematics is, how can students properly critically question, evaluate and compare economic theories without mathematics? I am no fan of the pathetic efforts of economists to use mathematics, and don’t think they should to be honest, but an essay answer means one set of opinions. Not a proof as such.

  3. Meanwhile Mr Richard Murphy, Tax Expert, Calculator of the True Tax Gap, the Nation’s No.1 Economics Blogger, erstwhile critic of Mathematical Economics and guiding light behind the movement to restore Econimcs to a Moral Philosophy has just instituted “the Post-Numerate Economics Society”.

    Writing today he argued that fresh young minds should be saved from the clutches of what he described as “wholly partial” analysis and “hegemonic thinking”.

    P.S. Mr Worstall, even by his standards Ritchie has had a barnstormer of a day. You must be like a kid in a bloody sweetshop.

  4. Let me take a wild guess – the exciting, alternative ways of thinking about economics these callow students have discovered look a lot like good old-fashioned, tried-and-failed socialist wibble?

    I remember the folks on LewRockwell.com warning people more than 10 years ago about the Greenspan bubble and what the consequences of spiralling public and private debt fuelled by cheap credit would be. I’m not optimistic that these young pups have discovered Hayek, Mises, or Rothbard though.

  5. No one predicted the financial crash. Shiller and others predicted a major correction in the US housing market (I was persuaded in 2004 that they were right, following a talk by Shiller I happened to attend). No one foresaw the effect that would have on the banks. Even John Paulson was surprised at how much money he made.

  6. A few arrogant students beliving they know it all already, I remember people like this from my Uni days. Don;t know where they are now.

  7. This “Math is hard” stuff should stay with Barbie doll.
    Mind you, sociology students have been complaining about it ever since sociology departments were founded.

  8. As a current student at UoM, I’ll defend the post-crash economics group to some extent – so far it’s mainly just been organising events at which non-mainstream economists (or disgruntled mainstream economists) give talks. They have yet to actually get in the way of learning the stuff we’re supposed to be learning. That said, I’m glad my degree will be done by the time they starting changing the syllabus.

    The lectures themselves are pretty mixed. Ha-Joon Chang did one on the different schools of thought which was surprisingly good (aside from his description of Pareto Optimality, which he interpreted as a normative condition – “something can only be justified if it makes no-one worse off.”) On the other hand, I remember one woman coming in and doing an absolute hatchet job on the EMH, claiming (among other things) that it implied all assets are equally liquid.

  9. PaulB,

    How much did we know about what the banks were doing?

    Previous house market crashes didn’t cause collapses because so much of the market was run by building societies who have tight rules about using money markets that tie lending to borrowing. They didn’t do the crazy stuff that Crock did.

    And almost everything about the bank collapse is because of interference by the state. If the public had to make a judgement about a bank being a safe place to put their money, banks would be a great deal more conservative.

  10. In fairness to Ritchie, I’ve actually read the manifesto of the Organization, and if they’re advocating (as I read it superficially) that an economics course which doesn’t feature Keynes is somewhat partial, I’d have to concede they have a point.

    As the excellent reply by Andrew Pearson (#10) points out, they seem to be inviting ‘dissident’ economic thinkers to give lectures rather than going on an 1970s style ‘sit-in’ protest and disrupting other people. Let’s not fall into the anti Free Speech outlook of the likes of Murphy. If these people want to learn about Keynesian economics, then a curriculum should surely allow that?

  11. I don’t know where the idea of UoM not teaching Keynes is from, but I’ll shut it down right now. Keynes is very much part of the macroeconomics teaching – why, only yesterday we had a lecture covering the Keynesian Cross.

  12. Van_Patten

    First: an economics course that doesn’t feature Keynes isn;t an economics course. That is being market-based or anything; it is just failing to deliver an economics course. That said, I would love to know for sure if that is what is really, genuinely, as in factual and non-Richtieworld true, what is happening.

    Second: go and have a look at Ritchie’s blog today. Look at his take on it. I don’t need to gather any more facts about that; i hav read it. Stupid twat.

  13. TimA: That’s not directly true. The banks thought they were being conservative. And if the banks didn’t know the risks, neither would depositors.

    To predict the crisis you would have to know:
    i) that there was a US housing bubble
    ii) that agency effects had reduced the quality of mortgages
    iii) that the value of mortgage CDOs was highly sensitive to the possibility of a US house-price collapse causing widespread mortgage defaults.
    iv) that the models being used didn’t consider the possibility
    v) that banks had massive positions in mortgage CDOs
    vi) that if the risk that banks would sustain fatal losses become too large, interbank liquidity generally would dry up

    No one knew all those things. I could have told you (i) and (iii) and perhaps (vi) if I’d thought about it. My boss’s boss could have told you (v) but probably not (iii). I suppose John Paulson could have told you (i), (ii), (iii), and (iv). What should have happened is that smart mortgage derivative traders should have worked out the same thing as Paulson, and fed that up to the guys responsible for the overall risk, who should have listened to them. But it didn’t.

    I think the lesson is that the system is too complex to be safe. Either we live with occasional crashes, or we make the system simpler. Do you think taking away government deposit guarantees would achieve that?

  14. Lots of people knew something was coming, but the problem was that the market can stay wrong a lot longer than you can stay solvent. Even Paulson had his doubts.

    There is no doubt that if there had been a properly defined bank defaulting procedure, with no bail outs possible, things would have been different.

    And if as a bank customer, you think you are being clever by getting above average rates therefore believing that there is actually a free lunch, you deserve what comes to you eventually.

  15. Just look at the euro, by any reckoning it should have imploded.

    It has not, it will eventually, but what do you do in the meantime?

  16. “How fucking mainstream is that?” Come off it, Tim. Shiller was ostracised by his colleagues at Yale for his views.

  17. Ironman

    You’ll get no argument from me on your definition of Murphy – if anything you’re showing remarkable restraint.

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