Wednesday, 9 March 2011
Professors Mishkin, Crafts & Besley and the shiteness of economics
I mind once being at this academic thingy where there was an American academic running a course who was hoping to get tenure at an American University. Fortunately, one of the other bods, a Professor, running a different course was in a position to influence the bods who would decide whether the original blerk got tenure. It was the kind of situation I’m sure a social anthropologist could have got a thesis out of. For the rest of us all we saw was some poor bloke humiliating and degrading himself as he licked this Professor’s arse. Thankfully, the Professor was too up herself to realise what was going on.
The broader lesson of all this is that senior academics have a significant influence on who gets to be an academic and as a result what ideas, approaches and subject matter make it into the academic canon and/or undergraduate and postgraduate prospectuses. Bearing that in mind I’ve added some edited stuff from the generally good Inside Job documentary cos it shows the terribly senior academic economist Professor Frederic Mishkin being stitched up like an utter kipper (and I’ve added a video to a blog post, woo hoo!). Setting aside the various forum comments now appearing across the globe describing Mishkin as a “douche” and a “wanker” (just google his name fer fuck sake), what this hapless (but wealthy!) joke figure makes abso-fucking-lutely clear is that economists were never, ever just passive observers of the credit crunch. Rather it seems whenever they could they grasped the opportunity to become active, fiver grasping participants in it all, whoring themselves, their institutions and their discipline.
This is the real context for the various navel gazing things subsequently written by economists about the credit crunch and economics. Before getting in to that though it’s probably worth highlighting a quick fact of life – Mishkin was paid loads to do research except while economists may be paid to do so, they aren't actually trained to conduct research. Instead, for economists data is primarily a given (or to quote Mishkin "you go with the information you have")to be squeezed into wanky formulae whereas for most other social scientists data gathering and source criticism - i.e. who created this data, how, why and what does that mean in terms of what it says and how I can use it - is all basic stuff they’re trained to address. Anyhoo that was a digression to highlight how paying any economist to do any research is a fucking joke for the most part from the outset; you're essentially paying them to attach their name and credibility to whatever it is your trying to sell. But, aye back to Mishkin as illustrating a broader phenomenon that provides a useful context for the relatively recent spate of economist navel gazing.
To be fair there’s a quaint aspect to some of the shite economists have come out with since the credit crunch crunched. Like when the Queen asked why economists had failed to see it coming, a hastily convened seminar at the British Academy chock full of the great and the good discussed the matter to the point where the terribly august Professor Tim Besley, formerly a member of the Bank of England’s wise and powerful monetary policy committee, was able to write a response to the queen’s admirably straightforward question; it was, he wrote in July 2009, "a failure of the collective imagination of many bright people both in this country and internationally, to understand the risks to the system as a whole".
More recently, the not quite as eminent Professor Nick Crafts felt confident enough to claim “Two cheers for economists are in order. They were complacent before the financial crisis, but they did know enough to limit its impact so that the outcome was the Great Recession and not a Great Depression”.
Yeah right. In my book Prof Crafts and Besley are talking self-serving shite. Like lets get academic and pedantic on Prof Crafts ass fer a second – there is no agreed definition of a depression and its only happened once the past 100 plus years so how the fuck does fuckferbrains know we’re no in another one? Eh? That aside Professor Crafts seems to be following the following ceteris paribus formulae – economists failed to anticipate the credit crunch, but having learned the lessons of the past, made sure an even worse outcome was avoided. Hence, for Professor Crafts Ben Bernanke, Chairmen of the US Federal Reserve, is a key example because he was and is “a scholar who has made seminal contributions to research on” the Great depression” and blessed with this knowledge saw to it that the following happened; “Aggressive policy responses prevented a collapse of the banking system and injected fiscal and monetary stimulus, which limited the downturn”.
The problem for poor Professor Crafts and Besley though is the following; as the examples of Ben Bernanke and "Douche" Mishkin make utterly fucking clear leading economists were well paid, active, influential participants who helped generate the conditions, mindset and regulations that led to the credit crunch, which is damaging the economic lives of millions of people. They were NEVER, EVER just passive observers who happened to be looking the wrong way. Rather, they were consultants, advisors, boosters, expert witnesses, regulators, cheer leaders, op-ed spewers, ideologues, mascots, ornaments, warm up acts and so on and so on for all the shite that led up to the credit crunch we're still living with. And yeah, yeah you can cite someone like Nouriel Roubini as an example of an economist that warned against it all, except his star only rose because he was an exception to this rule. Plus, none of this is even taking into account the fact that however many of the bankers and financiers who fucked shit up were taught by these fuckers and influenced by their prejudices in the first place.
You could of course argue that this simply reflects how terribly “gauche” our American cousins are and thank god for good Queen Bess and so on, except that would be to ignore the fact douches like Frederic Mishkin decide who gets tenure from pools of international candidates and sit on the editorial boards of international journals i.e. they influence the content and practice of economics here, there and everywhere. It would also be to ignore people like say Professor David Miles, former Professor at Imperial college London, former Morgan Stanley UK Chief economist, former producer of government reports and current member of the Bank of England’s monetary policy committee and all his CV says about how Britain and the USA aren’t necessarily as different as we’d like to assume (to be honest in the meantime Professor Miles actually produces some interesting shit).
So yeah it would be nice to join Prof Crafts in his cheering given his article is essentially making a claim for more economic history, a discipline he is a justifiably acknowledged expert in and which has helped out in policy-setting terms. But, without a greater degree of self-awareness, modesty and awareness of the actual context he can go and fuck himself, that or do the eminent economic historian's usual shit of writing some piss company history that pays enough to buy a new conservatory.
As for "Douche" Mishkin, the Iceland booster, the Serious Fraud Office decision today to arrest however many bods in relation to some Icelandic bank is a fucking joke. Oooh, oh like the worst case scenario here is some billionaires might get fined a couple hundred grand in 7 years time after millions of taxpayer fivers get pissed away on lawyers. Christ shit is totally fucked up.