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Forum Post: Economic Wizards Unveiled

Posted 6 years ago on May 18, 2016, 10:17 a.m. EST by agkaiser (2515) from Fredericksburg, TX
This content is user submitted and not an official statement

Long ago communities of humans hunted and gathered successfully for a quarter of a million years or more. Individual private property consisted of hearth, perhaps individual family shelters, clothing, tools, weapons and other personal property. The land and resources were held in common. The transition by some to pastoral economies changed the fundamental notions of private property little if any.

When settled agrarian communities invented civilization starting ten thousand years or so in our past, it was deemed better to hold less in common and more private property, especially land and resources. The last commons communities, even agricultural ones, didn't fall into the hands of ruling elites until the feudal lords grabbed the Northern European People's land and freeheld common resources about a 1000 years ago.

We've been mostly very religious people for a very long time. Ruling elites have ordinarily claimed the moral high ground based on theological precepts. The theoclassical approach of post modern economists and the dogma of capitalism are no exception to the story of the past ten thousand years. Neither is the growing concentration of property [land, resources, wealth and money] with a shrinking percentage of the population. But billionaire acquisitions and CEO extortions are called growth of GDP in the grotesque theoeconomics of Ayn Rand and Milton Friedman. The narcissism and megalomania of Donald Trump are typical examples of the lowest common denominator of morality and scruples that libertarian influence has wrought.

Bill Black, the author of "The Best Way to Rob a Bank is to Own One" and an associate professor of economics and law at the University of Missouri-Kansas City, takes issue with the theoeconomists, like Mankiw and his ten principles, that dominate what is called thought today:

"... Economists are unique among scientists in the frequency, severity, and persistence of their errors...." http://www.nakedcapitalism.com/2016/05/bill-black-greg-mankiws-unprincipled-economics-indoctrination.html can be also seen at: http://neweconomicperspectives.org/



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[-] 1 points by Shule (2638) 6 years ago

One needs to be carefull as there is such a thing as good (sound) economics, and bad (unsound economics), and unfortunately all we ever see these days is bad economics. But of course, the staple brand of economics currently being taught in our schools, i.e. Freedman et. al. is that what is used by the ultra-rich to get ultra-richer by robbing the poor and making them more poor. Most unfortunate is that the ultra-rich call the shots these days. We've all become so entangled with their mighty buck, that if one wants to graduate, get a job, and keep a job in economics (or any paying job) one must sing the song from whose hand one is fed.

But that is to not say there is no such thing as good economiics. People like Veblin, Keynes, Galbraith, et. al. put forth some very reasonable theories that got the world out of a lot of trouble back some very many moons ago. Unfortunately, those lines of economic thought seem to have all but disappeared, and these days in this part of the world, one will not get very far touting those kinds of theories which make sense socially.

Scary to me is there are so many other academic disciplines that are also going the "corporate route." They turn common sense upside down for the benefit of those elite in power at the expense of common folk. "Systems Engineering" with its "top down" thinking is another one. And then what ever happened to the discipline of Journalism?

[-] 1 points by grapes (5232) 6 years ago

"Systems Engineering" and "the discipline of journalism" have all gone down the marketing and sales path. It's the Whore-locust. You only need to see how the mainstream media cater to Mx. Cheese. It's funky, isn't it?

[-] 1 points by agkaiser (2515) from Fredericksburg, TX 6 years ago

The means/rationalizations, as you say, are certainly degenerating. The end, concentration of wealth by any means deemed good or evil that are used, is my focus.

[-] 1 points by grapes (5232) 6 years ago

The following is a caricature of what happened with an incestuous eelite tribe.

The compensation committee of the board of directors sets performance goal for the chief executive officer. Through his chief financial officer, he discovers that the upcoming quarter's revenue will have a shortfall. He decides to cut costs to fatten the bottomline so he'll get the performance bonus.

In order to provide "cover" for eliminating the support function, he calls up his college-frat buddy who is now a professor of economics in a prestigious university to commission a study to justify his conclusion for action. The professor takes his graduate students to conduct an on-site investigation and study of the relevance of the support function. They create the report with the indicated conclusion. The support function's people are fired. The company pays for the travel, lodging, meals, study, and report of the professor and the graduate students. The chief executive officer realizes the cost saving and gets the "performance" bonus.

What will happen later when the cumulative effect of not having the support function materializes? Who gets all-expenses-paid vacation? Who gets the performance bonus? Who gets the pink slips?

When the trusty and sturdy, but boring and no-fun, board director from outside asks in the board meeting why the support has been lacking, out comes that prestigious report that has cost the company an arm and a leg. When the board director steams, the other directors throw some cold water to calm things down. Oh yes, the other board directors are connected to the chief executive officer in different ways. Do you know how one gets onto a board? Connection. What's the secret to great pay as a chief executive officer? Pack the compensation committee with families and buddies.

Just as the demonkrapts and retard-i-can'ts are all good fellow Americans, we are all families and buddies, aren't we? XXOO Breathe-free euros, B3€

[-] 1 points by agkaiser (2515) from Fredericksburg, TX 6 years ago

Yep! In the end we're all poorer with less property that's more encumbered with debt and the officers, the board and the investors not only have theirs but hold the paper on ours.

[-] 1 points by grapes (5232) 6 years ago

Professor: Live high on the hog. Gain academic reputation for bringing in consulting contracts. Bolster the prestige of the princely-srums university. Gain tenure.

CEO: Get "performance" bonus for dumping the unnecessary dead-weight landing gear. Help Frat-boy buddy in academia. Ex-CEO will join academia's new dean before the crash after parachuting. In the middle of the summer night, the little owl on the dollar bill hoots, "It's not what you know. It's who, you know!" Who? Who? Who? Who? Who? (Herr Dummpf's proper education in Novus Ordo Seclorum is required im Gymnasium[Take it off, take it ALL off!])

Outside investors: Profit performance was met with crash landing built in.

Support function people: Fired. Either borrow more to pay for mortgages, be foreclosed, fix that sickly old car, pay for food, utilities or heat, or drop juniors out from college. When truly desperate, go postal - six times "richer" at a fathom below.

Company: EBITDA number stays high for now. Even gains additional income tax deductions (the vacation and veal[a time to steal and a time to deal, a time to seal and a time for veal] expenses, restructuring costs).

Government: Loses income tax. Must fix runway crashes at landing sites eventually. Taxpayers, empty your pockets to save the idiots - this is not a stick-up, this is the altruistic and patriotic 3€ up. "Leave your load with me," says the government, pretending to be a coquette. Government needs humor.

[-] 1 points by agkaiser (2515) from Fredericksburg, TX 6 years ago

see the followup: "Bill Black: Mankiw's Mythical Ten Commandments of Theoclassical Economics"


[-] 1 points by ImNotMe (1488) 6 years ago

''Economists are unusual, but not unique, in their frequency of scoring low in altruism. Part of this is self-selection. Students who choose to study economics score lower in altruism. There also appear to be learning effects. After they major in economics students score even lower in altruism. The ways that economists are unique, or at least statistically unusual, reflect badly on economists and economics. Mankiw is a leading contributor to what makes theoclassical economics so dogmatic, false, and immoral.'' - from end of OP link & ...

''Unlike the Republicans, who always rise above their theoclassical principles when their president is in office and faces a recession, the “New Democrats” are the ones who seem to have drunk the theoclassical Kool-Aid and strive endlessly to create the self-inflicted wound of austerity when they are in power. New Democrats also love to bash Republican presidents for running deficits even when those deficits produced no harmful inflation and helped produce recovery. It is sensible and honest to point out that tax cuts for the wealthy are a far less effective form of stimulus and to present and support superior alternatives such as job guarantee and infrastructure programs. It would be superb if Democrats were to point out that by far the most effective, prompt means of cutting taxes to stimulate the economy in response to a recession is to cease collecting the Social Security taxes for several years. It is not fine to praise Bill Clinton for taking the harmful step of running a budget surplus or to bash Republicans because they – correctly – increased fiscal stimulus (and therefore the short-term deficit) in response to a recession.

''Democrats also need to stop spreading the myth that Bill Clinton was an economic marvel. He was the luckiest president in history in terms of timing. His economic “success” was the product of two of the largest bubbles in history (the dot.com and real estate bubbles). The real estate bubble is the only thing that prevented his dot.com bubble from causing an economic collapse during his term. The real estate bubble was so enormous that it made it easy for the fraudulent CEOs to “roll” (refinance) the fraudulent loans they made, which helped cause the bubble to hyper-inflate. The saying in the trade is “a rolling loan gathers no loss.” This meant that the bubble was Bill Clinton and George Bush’s bubble, but it collapsed on George Bush’s watch so Clinton gets the credit for the high employment produced by the twin bubbles and Bush gets the blame for the massive unemployment that a massive bubble will create when it collapses (if it is not replaced by an even larger bubble).'' - from end of 2nd link, above.

IN compliment of your excellent forum-post, also consider ...

Btw, Prof. William K. Black and Stephanie Kelton are now senior Bernie Sanders Economics advisers.

radix omnium malorum est cupiditas ...

[-] 1 points by agkaiser (2515) from Fredericksburg, TX 6 years ago

Thanks for the Monbiot link!

[-] 1 points by ImNotMe (1488) 6 years ago

''Disposable Americans: The Numbers are Growing'', by Paul Buchheit:

veritas vos liberabit ...

[-] 1 points by ImNotMe (1488) 6 years ago

''Never-Ending Growth Cannot Be Sustained on a Finite Planet'' - an interview with George Monbiot:

spero meliora ...