[ExI] The Dynamite Prize in Economics

[Christopher Luebcke]

Couldn't have gone to a better guy.

Frontline just aired a related program called "The Warning", about Brooksley Born's failed (and probably Quixotically hopeless) attempt to regulate the derivatives market. Greenspan and Summers feature prominently, of course. I'm no economist and derivatives baffle me, but it was quite good:

http://www.pbs.org/wgbh/pages/frontline/warning/?utm_campaign=homepage&utm_medium=proglist&utm_source=proglist



________________________________
From: BillK <pharos at gmail.com>
To: Extropy Chat <extropy-chat at lists.extropy.org>
Sent: Mon, February 22, 2010 12:20:06 PM
Subject: [ExI] The Dynamite Prize in Economics

Alan Greenspan has been judged the economist most responsible for
causing the Global Financial Crisis. He and 2nd and 3rd place
finishers Milton Friedman and Larry Summers, have won the first–and
hopefully last—Dynamite Prize in Economics.
They have been judged to be the three economists most responsible for
the Global Financial Crisis. More figuratively, they are the three
economists most responsible for blowing up the global economy.

<http://rwer.wordpress.com/2010/02/22/greenspan-friedman-and-summers-win-dynamite-prize-in-economics/>

Dynamite Prize Citations

Alan Greenspan (5,061 votes): As Chairman of the Federal Reserve
System from 1987 to 2006, Alan Greenspan both led the over expansion
of money and credit that created the bubble that burst and
aggressively promoted the view that financial markets are naturally
efficient and in no need of regulation.

Milton Friedman (3,349 votes): Friedman propagated the delusion,
through his misunderstanding of the scientific method, that an economy
can be accurately modeled using counterfactual propositions about its
nature. This, together with his simplistic model of money, encouraged
the development of fantasy-based theories of economics and finance
that facilitated the Global Financial Collapse.

Larry Summers (3,023 votes):  As US Secretary of the Treasury
(formerly an economist at Harvard and the World Bank), Summers worked
successfully for the repeal of the Glass-Steagall Act, which since the
Great Crash of 1929 had kept deposit banking separate from casino
banking.  He also helped Greenspan and Wall Street torpedo efforts to
regulate derivatives.

The vote totals for the other finalists were:

Fischer Black and Myron Scholes  2,016
Eugene Fama   1,668
Paul Samuelson  1,291
Robert Lucas   912
Richard Portes   433
Edward Prescott and Finn E. Kydland  403
Assar Lindbeck   375

This blog established the prize in response to attempts by economists
to evade responsibility for the crisis by calling it an unpredictable,
“Black Swan” event. In reality, the public perception that economic
theories and policies helped cause the crisis is correct.
--------------------------------------

More info about the misdeeds of these economists can be found at the
voting page (poll now closed).
<http://rwer.wordpress.com/vote-here-for-the-dynamite-prize-in-economics/>

(I voted for Greenspan also! )

BillK
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