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You are here: Home / Economics / C.R.E.A.M. / His brilliant career

His brilliant career

by DougJ|  October 5, 201011:43 pm| 66 Comments

This post is in: C.R.E.A.M., Pink Himalayan Salt

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Via CrookedTimber, a rather remarkable article on how many prominent economists will say anything for a buck. The “undeniably brilliant” Larry Summers:

Over the past decade, Summers continued to advocate financial deregulation, both as president of Harvard and as a University Professor after being forced out of the presidency. During this time, Summers became wealthy through consulting and speaking engagements with financial firms. Between 2001 and his entry into the Obama administration, he made more than $20-million from the financial-services industry. (His 2009 federal financial-disclosure form listed his net worth as $17-million to $39-million.)

[….]

In 2005, at the annual Jackson Hole, Wyo., conference of the world’s leading central bankers, the chief economist of the International Monetary Fund, Raghuram Rajan, presented a brilliant paper that constituted the first prominent warning of the coming crisis. Rajan pointed out that the structure of financial-sector compensation, in combination with complex financial products, gave bankers huge cash incentives to take risks with other people’s money, while imposing no penalties for any subsequent losses. Rajan warned that this bonus culture rewarded bankers for actions that could destroy their own institutions, or even the entire system, and that this could generate a “full-blown financial crisis” and a “catastrophic meltdown.”

When Rajan finished speaking, Summers rose up from the audience and attacked him, calling him a “Luddite,” dismissing his concerns, and warning that increased regulation would reduce the productivity of the financial sector.

But he’s not necessarily even the worst example:

This is now, literally, a billion-dollar industry. The Law and Economics Consulting Group, started 22 years ago by professors at the University of California at Berkeley (David Teece in the business school, Thomas Jorde in the law school, and the economists Richard Gilbert and Gordon Rausser), is now a $300-million publicly held company. Others specializing in the sale (or rental) of academic expertise include Competition Policy (now Compass Lexecon), started by Richard Gilbert and Daniel Rubinfeld, both of whom served as chief economist of the Justice Department’s Antitrust Division in the Clinton administration; the Analysis Group; and Charles River Associates.

[…..]

Frederic Mishkin, a professor at the Columbia Business School, and a member of the Federal Reserve Board from 2006 to 2008. He was paid $124,000 by the Icelandic Chamber of Commerce to write a paper praising its regulatory and banking systems, two years before the Icelandic banks’ Ponzi scheme collapsed, causing $100-billion in losses. His 2006 federal financial-disclosure form listed his net worth as $6-million to $17-million.

It’s a simple system: take some economic idea that some wealthy interest likes, pay a well-known economist to shill for it, pretty soon Megan McArdle and Charles Lane are telling us “serious people think that there should be no financial regulation and the rich should pay no taxes”.

Perhaps the wonder is that this doesn’t happen more in, say, the sciences. There are almost no climate scientists willing to shill for Koch et al. I don’t know if this is because scientists are more honest than economists or if it’s because it’s harder to hide large amounts of bribe money in areas other than finance.

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66Comments

  1. 1.

    Mr. Furious

    October 5, 2010 at 11:50 pm

    The fact that Larry Summers had a fucking desk with his name on it in the Obama Administration is one of the single most annoying/disappointing things about the last two years. There’s no possible way that anything good for anyone except people like him came from having him involved in any part of the recovery.

  2. 2.

    The Moar You Know

    October 5, 2010 at 11:50 pm

    I don’t know if this is because scientists are more honest than economists or if it’s harder to hide large amounts of bribe money in areas other than finance.

    It’s because economics is a belief system, as opposed to science, which, unlike economics, requires one to test a hypothesis and obtain reproducible results before declaring a theory as proven.

  3. 3.

    Martin

    October 5, 2010 at 11:51 pm

    Is it just me, or has every DougJ post since he was promoted to business and economics editor gotten the C.R.E.A.M. tag?

    Not that it’s necessarily wrong, because I’d slap it on every media criticism post given that people still think that for-profit journalism is some kind of social service, but I usually spot the tag before DougJs name now.

  4. 4.

    DougJ is the business and economics editor for Balloon Juice.

    October 5, 2010 at 11:54 pm

    @Martin:

    I noticed that John and mistermix were using it a lot and, when I thought about it, I decided that nearly every post I write should have it as a tag.

  5. 5.

    BGinCHI

    October 5, 2010 at 11:56 pm

    So when are the forces of darkness going to come calling for me to shill for “Shakespeare against the taxman” or something? Or I could write a devastating poem about the horrors of collective action. Or a short story about the wonders of individuality.

    Fuck.

    All those advanced degrees for nothing.

    Ooh, how about a commercial: fade in on a candidate in trouble…I am not Immanuel Kant. I am you.

  6. 6.

    freelancer (itouch)

    October 5, 2010 at 11:56 pm

    Perhaps the wonder is that this doesn’t happen more in, say, the sciences. There are almost no climate scientists willing to shill for Koch et al. I don’t know if this is because scientists are more honest than economists or if it’s because it’s harder to hide large amounts of bribe money in areas other than finance.

    Science takes active measures to eliminate bias, human, or otherwise. It is the interrogation of the reality of the Universe, there’s no room within its construction for an investigator whose methodology and interrogation technique is knowingly flawed. Those that do are not called scientists, but pseudoscientists. Economics is an entirely human construct, not a natural one.

  7. 7.

    Martin

    October 5, 2010 at 11:57 pm

    @The Moar You Know: This. Times a million.

    It’s not that social sciences have no scientific merit – they do, but people have that pesky free will thing that you can insert as a cosmological constant into any evidence backed theory to make it turn out however you want, and the presence of that constant can only be argued as a matter of opinion.

  8. 8.

    DougJ is the business and economics editor for Balloon Juice.

    October 5, 2010 at 11:57 pm

    @BGinCHI:

    I am not Immanuel Kant.

    Why not? Is it because of the meatballs?

  9. 9.

    freelancer (itouch)

    October 5, 2010 at 11:59 pm

    @The Moar You Know:

    High Five!

  10. 10.

    RAM

    October 5, 2010 at 11:59 pm

    “It’s a simple system: take some economic idea that some wealthy interest likes, pay a well-known economist to shill for it, pretty soon Megan McArdle and Charles Lane are telling us ‘serious people think that there should be no financial regulation and the rich should pay no taxes.'”

    And don’t forget a vital component: Get the New York Times to write an edit praising the demise of regulation.

  11. 11.

    Anne Laurie

    October 6, 2010 at 12:01 am

    Perhaps the wonder is that this doesn’t happen more in, say, the sciences.

    No, the wonder is that so many otherwise intelligent people consider this form of economics a “science”. As practiced by people like Larry Summers, it’s a friggin’ religion, a way for people in charge of the money supply to pretend that their impulses are as immutable and inescapable as gravity or evolution. Right now, economics hasn’t progressed much past physics in the age of Newton — the distinction between “how money works” and “how people who can afford to pay economics would like to believe money works” is still being untangled. Or, by people like Summers, re-tangled for their own purposes!

  12. 12.

    burnspbesq

    October 6, 2010 at 12:03 am

    This is absurd. Do either you or the guy at crooked timber have any fucking clue how LECG, Compass, Lexecon, and similar firms make their money? Since you obviously don’t, I will tell you.

    They make their money primarily by providing expert witness services to parties in private litigation.

    I don’t know what bizarre parallel universe you all live in, but in the real world there is nothing morally or ethically wrong with that.

    Summers may or may not be a different story, but the exercise of 20/20 hindsight regarding remarks made five years ago is hardly compelling proof.

    P.S. to The Moar You Know. You can take your condescension about economics and shove it so far up your ass that the invisible hand won’t be able to pull it out.

  13. 13.

    BGinCHI

    October 6, 2010 at 12:04 am

    The @DougJ is the business and economics editor for Balloon Juice.: The categorical imperative clearly states that you should not be a meatball that you would not eat. And, thus, eating yourself would break the O’Donnell prime directive.

    It’s all just so confusing.

    Maybe we’re better off with Hegel. O’Donnell as the manifestation of World Historical Spirit. Spirits, witches, Hegel was kind of vague on that shit.

  14. 14.

    Omnes Omnibus

    October 6, 2010 at 12:04 am

    @BGinCHI: This, from Marlowe’s The Jew of Malta, just begs to be used in excusing some upcoming right-wing sex scandal:

    FRIAR BARNARDINE. Thou hast committed–
    __
    BARABAS. Fornication: but that was in another country;
    And besides, the wench is dead.

  15. 15.

    Jim in Chicago

    October 6, 2010 at 12:08 am

    Paul Krugman sure seems to practice economics like a science. Some of the posts on his blog really get into the weeds. He also regularly shows where his more, shall we say “malleable” colleagues go astray in their models or application of theory. But, of course, he’s “shrill.”

  16. 16.

    BGinCHI

    October 6, 2010 at 12:08 am

    @Omnes Omnibus: Hey, I’m just after teaching Arden of Faversham and The Spanish Tragedy.

    Marlowe oh so savage.

    A whole thread on Early Modern Drama memes? Yes.

    But. Until I get Favre money I’m withholding. Nope, not coming to camp. Get your own damn ideas. We gotta stick together.

  17. 17.

    Bob Loblaw

    October 6, 2010 at 12:11 am

    @burnspbesq:

    You’re really starting to get worried here, aren’t you? Don’t fret, counselor, the Bolsheviks aren’t actually at the gates.

    This is America. Your wealth and status are secure.

    Oh, and freshwater economics are absolutely a theology.

  18. 18.

    El Cid

    October 6, 2010 at 12:12 am

    Criticizing any of this makes you an anti-rational firebagger, I’m pretty sure. There’s no way anyone could have known that deregulating [or more relevantly, taking no action or stand whatsoever with regard to the reward structure of firms] financial affairs could have had serious negative effects, and anyone who argued, no matter how much the evidence, that it seemed pretty likely to, were a bunch of people who didn’t know what they were talking about and have no idea how the world works.

  19. 19.

    Omnes Omnibus

    October 6, 2010 at 12:13 am

    @BGinCHI: I don’t think I could keep up on such a thread. A man’s got to know his limitations.

  20. 20.

    Ailuridae

    October 6, 2010 at 12:15 am

    @burnspbesq:

    Often times regardless of how prominent they are they are willing to shill just about anything. Or how else do you explain the absurdity of this incident?

  21. 21.

    BGinCHI

    October 6, 2010 at 12:18 am

    @Omnes Omnibus:

    From Shax’s King John:

    K. John. Death.
    Hub. My lord?
    K. John. A grave.
    Hub. He shall not live.
    K. John. Enough.

    Now that’s a line of IA.

  22. 22.

    WyldPirate

    October 6, 2010 at 12:21 am

    @The Moar You Know:

    It’s because economics is a belief system, as opposed to science, which, unlike economics, requires one to test a hypothesis and obtain reproducible results before declaring a theory as proven.

    This, except for a pretty major “quibble”.

    First, a scientific theory is never “proven”. Rather, the hypotheses that were tested that led to the formulation of the theory in question were not falsified.

    A scientific theory is a mechanistic explanation for a natural phenomenon. Hypothesis testing provides the underpinning for proposing the theory. Theories can always be overturned or modified based on new info or a crucial hypothesis falsification that falsifies the hypothesis and requires the scientific community to modify or discard the theory.

    For example, the theory of biological evolution could be overturned by finding a anatomically modern human in the same geological context as a T. rex.

    There is fraud in science, particularly where big money is involved (ie medicine). The peer review in science is far more withering than most other disciplines. Frauds are harder to pass off.

  23. 23.

    DougJ is the business and economics editor for Balloon Juice.

    October 6, 2010 at 12:23 am

    @burnspbesq:

    How about the guy who wrote the stuff about how great the Icelandic banks are?

  24. 24.

    Omnes Omnibus

    October 6, 2010 at 12:24 am

    @DougJ is the business and economics editor for Balloon Juice.: Not all expert witnesses are good at what they do or even competent.

  25. 25.

    Bob Loblaw

    October 6, 2010 at 12:25 am

    @DougJ is the business and economics editor for Balloon Juice.:

    He’s a patriot and a hero and a producer of wealth. I think he deserves a capital gains tax cut for his troubles.

  26. 26.

    Jasper

    October 6, 2010 at 12:28 am

    @burnspbesq:

    Summers may or may not be a different story, but the exercise of 20/20 hindsight regarding remarks made five years ago is hardly compelling proof.

    Shorter: hoocoodanode.

  27. 27.

    Martin

    October 6, 2010 at 12:30 am

    @Omnes Omnibus: In most professions, in order to sit as an expert witness you need to be licensed by the state in your profession. That puts you under malpractice statutes.

    It tends to cut down on the incompetency on the stand.

  28. 28.

    Mark S.

    October 6, 2010 at 12:31 am

    @DougJ is the business and economics editor for Balloon Juice.:

    I don’t know what bizarre parallel universe you live in, but in the real world there is nothing morally or ethically wrong with that.

  29. 29.

    Ailuridae

    October 6, 2010 at 12:33 am

    @Omnes Omnibus:

    And many economists are willing to say things for money that fit their larger ideology without looking at the details of specific cases, industries or markets and hope that the sitting judge is too ignorant of economics to exclude their testimony (which is a safe bet).

  30. 30.

    WyldPirate

    October 6, 2010 at 12:35 am

    @burnspbesq:

    macroeconomics isn’t even close to being a science. No controls on the human/societal behavior.

    Stick that up your ass as far as you can and cogitate on it a while, burnspbesq.

  31. 31.

    Omnes Omnibus

    October 6, 2010 at 12:36 am

    @Martin: Not necessarily the case. I am not aware of licensing requirements for economists, yet they can testify as experts.

  32. 32.

    SciVo

    October 6, 2010 at 12:36 am

    Science is inherently self-skeptical. You start with what you believe — your hypothesis — and then take the inverse of that, the null hypothesis, and look for evidence for that. The reason being that we’re subject to literally dozens of cognitive biases, so that if you look for evidence of what you believe then you’ll find it even if it isn’t there. A scientist (whether physical, social, computer or systems) who demonstrates self-credulity — whose skepticism is directed at evidence that contradicts his own beliefs, like Larry Summers, instead of at those beliefs — is doing it wrong. Those pseudo-scientists are no more trustworthy than any non-scientist, but that doesn’t impugn the field as a whole. Some do it right.

  33. 33.

    Ailuridae

    October 6, 2010 at 12:39 am

    @Omnes Omnibus:

    Pretty sure that was Martin’s point and not an oversight.

  34. 34.

    Omnes Omnibus

    October 6, 2010 at 12:42 am

    @Ailuridae: Aha, then we are talking past one another since I interpreted his comment as disagreeing with my general point. Perhaps it is nearing bedtime.

  35. 35.

    James E. Powell

    October 6, 2010 at 12:51 am

    @burnspbesq:

    the exercise of 20/20 hindsight regarding remarks made five years ago is hardly compelling proof.

    Whatever you want to call it, 20/20 hindsight is a valuable method by which to determine whether, five years ago, Summers was bullshitting or merely stupid.

    Similarly, unemployment at around 10% is helps us to determine that Summers insistence on a smaller stimulus package, which required him to disregard the advice of people who had a better track record than he did, was dishonest or stupid.

    In the sciences, a person whose hypotheses are consistently shown to be unfounded does not get promoted. In economics, if one has the right degrees, the right fraternity brothers, and the right line of bullshit that helps the corporate ruling class, they get promoted.

    Like the militarist foreign policy crowd, they never get fired for being wrong, and they frequently get promoted for being wrong. Hell, didn’t Bremer get a Medal of Freedom?

  36. 36.

    Comrade Kevin

    October 6, 2010 at 12:54 am

    @burnspbesq:

    They make their money primarily by providing expert witness services to parties in private litigation.
    I don’t know what bizarre parallel universe you all live in, but in the real world there is nothing morally or ethically wrong with that.

    So, they are paid lots of money to say, in litigation, what their clients want them to.

  37. 37.

    General Stuck

    October 6, 2010 at 12:57 am

    @Omnes Omnibus:

    Perhaps it is nearing bedtime.

    Goodnight Omnibus

    Goodnight Omnibus

    :-)

  38. 38.

    Odie Hugh Manatee

    October 6, 2010 at 1:01 am

    @Omnes Omnibus:

    Agreed. In my experience it seems that many of these ‘expert witnesses’ are just opinions for rent. There are tons of expert opinions out there on just about any imaginable subject. Like many opinions for sale, these opinions are shaped by the desired result/outcome that the client is seeking. In America, everything has a price or is for sale. To play the game, all you need is big cash to buy in or an expert opinion to sell off so you can get your own hands on some of that ‘big cash’.

    Who says that prostitution is illegal?

  39. 39.

    Origuy

    October 6, 2010 at 1:04 am

    @BGinCHI:

    I am not Immanuel Kant.

    That’s good. He was a real pissant, who was very rarely stable.

  40. 40.

    srv

    October 6, 2010 at 1:05 am

    Summers out, and a much smarter guy who wrote in 2007 is in:

    the mortgage market has become more perfect, not more irresponsible. People tend to make good decisions about their own economic prospects.

    We are so fucked.

  41. 41.

    NobodySpecial

    October 6, 2010 at 1:29 am

    @Mark S.: You mean like the criminal psychologists who manage to, 100% of the time they show up on a prosecution witness list, are able to verify that, yes, said defendant is perfectly sane and it’s fully responsible to fry them in the chair?

    Economics nowadays merely means ‘Figure out what the rich guy who pays your salary wants to hear and tell it to him twice a day’.

  42. 42.

    Martin

    October 6, 2010 at 1:40 am

    @Ailuridae: It was. The public has no real assurance that the person on the stand is truly an ‘expert’ since there is no standard applied to that label. It’s not enough to have a medical degree, to testify as an expert you need to have a medical license.

    ‘Expert witness’ is pretty meaningless without such a standard as there’s no consequence to bullshitting on the stand. If an engineer got up there and made some shit up, there’d be repercussions because engineering (or medicine, etc.) isn’t a discipline of opinion, but one of published and accepted standards. There’s room for opinion there beyond those standards, but you can’t deviate from those standards.

    Economics *should* be able to have at least some such standards, but nothing is codified. We keep having the same goddamn debates over really fundamental issues by leading economists that have been going on for a century.

  43. 43.

    IronyAbounds

    October 6, 2010 at 2:01 am

    For what it’s worth, Summers, in his role as Harvard President, comes across as a real horse’s ass in “The Social Network.” The guy is a serious arrogant dick, and while very smart people may often times lack people skills, I have found that those who fall into the dick category are very likely to be simply that, dicks who are far less intelligent than they think they are.

  44. 44.

    Bob Loblaw

    October 6, 2010 at 2:35 am

    burnspesq wants to congratulate the lawyers involved in this decision for their dedication and hard work on behalf of their clients:

    http://www.guardian.co.uk/world/2010/oct/03/wilson-lucom-panama-court-ruling

    Those fucking slum kids don’t pay no legal fees.

  45. 45.

    Ash Can

    October 6, 2010 at 2:48 am

    OT, but can someone tell me what “C.R.E.A.M.” stands for? I must have been on vacation when it was added to the categories, and for the life of me I can’t figure it out. It’s been bugging me all along.

  46. 46.

    Mark S.

    October 6, 2010 at 2:59 am

    @Ash Can:

    A song I’ve never heard.

  47. 47.

    Ash Can

    October 6, 2010 at 3:07 am

    @Mark S.: Ah ha! Got it. Thanks.

  48. 48.

    NYT

    October 6, 2010 at 3:15 am

    Harvard’s Marty Feldstein was on my TV today saying how he had advised President Obama on tax policy. Obama has appointed him to his Economic Recovery Advisory Board.
    Marty Feldstein who was one of Bush’s top economic advisors.
    Marty Feldstein who was on the board of AIG when they were blowing up the financial world.
    It doesnt matter how much you screw up in their world as long as you screw the right people.

  49. 49.

    sukabi

    October 6, 2010 at 3:24 am

    I don’t know if this is because scientists are more honest than economists or if it’s because it’s harder to hide large amounts of bribe money in areas other than finance.

    I would guess that personal motivations between the 2 groups are completely different…. economists are interested in money and how to best take advantage of the concept… while scientists are interested in finding the truth of how and why something works… it’s easier to convince someone who’s job it is to leverage their knowledge on money to “bend” their views for a $$ payoff, than it would be to convince a scientist to do the same… one is searching for “the truth of a thing” while the other is looking for justifications for their economic theories…

  50. 50.

    mclaren

    October 6, 2010 at 3:26 am

    @burnspbesq:

    You can take your condescension about economics and shove it so far up your ass that the invisible hand won’t be able to pull it out.

    And we have a hit! A palpable hit!

    So you whore yourself out for bribes, do you, burnspbesq? Tell us more.

    As one of the most arrogant incompetent ignorami on this forum, you have a long record of screaming crazed lies…but now that you’re shrieking like a stuck pig when other people correctly point out that economics is not a science and has nothing to do with science, we know you’re also deeply involved in whoring yourself out for bribe money by lying out your ass for whatever scammers want to hire a bogus economist.

    Keep screaming those lies, burnspbesq, you’re destroying your own credibility so fast we can hear a sonic boom.

    Yes indeed, burnspbesq, economics is a science…that’s why all those esteemed economists reported that there was no sign of a housing bubble right before the housing market collapsed. Economics is a science, which explains why economists cheered those stunning new highs on the NASDAQ back in late 2000 just before the bottom fell out and the NASDAQ lost 80% of its value. Economics is a science, and that’s why every economist in Washington D.C. now stands around like a deer in a headlight mumbling “We never expected unemployment to get this high this long after the stimulus…”

    If medicine was run like economics, we’d all still be bleeding patients and using leeches on them. If physics was run like economics, we’d all still be studying phlogiston instead of building cyclotrons. If architecture was run like economics, every skyscraper in the world would have collapsed and every architect in the world would be standing around whining, “But no one could possibly have predicted this outcome!”

    Economics differs from scientology only insofar as economics makes less credible assertions about the world. Scientology claims that some alien creature named “Xenu” kidnapped millions of people and blew them up with H-bombs in volcanos 50 million years ago, which seems outlandish, but can’t be positively disproven. By contrast, economics asserts that everyone makes perfectly rational decisions based on their own calculations of personal benefit and no one ever panics or gets greedy and behaves irrationally in the marketplace — an assertion so insane and so foolish and clearly disproven by Kahneman and Tversky’s Noble-prize-winning psychology experiments that the scientology story about Xenu seems credible by comparison.

  51. 51.

    mclaren

    October 6, 2010 at 3:40 am

    @James E. Powell:

    …unemployment at around 10% is helps us to determine that Summers insistence on a smaller stimulus package, which required him to disregard the advice of people who had a better track record than he did, was dishonest or stupid.

    Why choose?

    The evidence shows that Larry Summers is dishonest and stupid.

    Where’s the evidence that Larry Summers is smart? What he says?

    What people say means nothing — let’s look at Summers’ record. He mishandled the conversion of Russia’s economy to the free market, destroying it and wrecking Russia so badly that its life expectancy collapsed down to age 50 and the entire Russian economy got delivered into the hands of 7 oligarchs.

    Then, in 1997, Larry Summers mishandled the Asian currency crisis so badly that he further depressed their economies and extended their economic disintegration.

    In 1998, Larry Summers argued vehemently for removing the Glass-Steagal rules — a move which, as we now know, was a complete disaster because it did what every competent economist knew it would do: enable banks that acted like brokerage houses to leverage themselves into giant risk positions that eventually blew up in their faces. That was in fact the entire point of Glass-Steagal: to prevent banks from turning themselves into casinos and blowing all their money on crazy risky speculative schemes.

    In the 2000s, Larry Summers claimed that financial derivatives like CDOs has reduced risk in the world market, a provably false assertion.

    And in 2005 Summers asserted that there was no danger from financial speculation and that deregulation had increased the growth of the GDP of the American economy and that financial innovation had increased returns for investors, claims which directly contradict the historical record.

    So Larry Summers has been wrong, wrong, wrong, wrong, wrong. Every time Larry Summers has opened his mouth, everything he has said has been false. Provably false. Consistently false. Continually false.

    I don’t know where you come from, but out here in the real world, someone who is constantly and continually and always wrong is not called “smart.” Out here in the real wrold we call someone like that “stupid.”

    Of course, if someone like that persists in making provably false claims year after year, we all call him “dishonest.” So why choose? Is Larry Summers a liar or an idiot? He’s both! Two! Two! Two fools in one!

    Yes, Larry Summer is an ignorant liar and a stupid fool — two great tastes that go great together!

  52. 52.

    Chuck Butcher

    October 6, 2010 at 3:55 am

    If you belong to the right club and persuasively tell the Emperor that yes it is a fine suit you will do well. If it all blows up and people notice that the fat fuck is indeed naked just soldier on as though it never happened. There will be some folks eager to point out the futility of hindsight, especially the kind that looks a ways back into the past (history) to find out what happens when you do things. You’d think the USA had no economic history to listen to some folks.

    But it won’t matter because very serious money needs to be reassured that somebody from the club has their back or they’ll take their ball and go home. They might just do something like spend their free government money for their ends … er, there are reports…

  53. 53.

    Chuck Butcher

    October 6, 2010 at 4:02 am

    @sukabi:

    one is searching for “the truth of a thing” while the other is looking for justifications for their economic theories…

    Oh cripes, please…

    It might have a bit to do with having a whole bunch of other people eagerly gunning for you if you put out something they can bust up with other data or outcomes. If you’re postulating that money is less a motivator for a scientist then I’m … well, dubious, whoredome doesn’t seem to be a very exclusive club.

  54. 54.

    kuvasz

    October 6, 2010 at 6:45 am

    “scientists are more honest than economists”

    Knowing both, I agree.

  55. 55.

    bob h

    October 6, 2010 at 7:00 am

    I don’t know if this is because scientists are more honest than economists or if it’s because it’s harder to hide large amounts of bribe money in areas other than finance.

    As a scientist myself, I can say that intellectual dishonesty of the kind routinely displayed in economics gets ferreted out rather rapidly in science, and that it is not possible to have any sort of career if one practices it.

  56. 56.

    Jim Pharo

    October 6, 2010 at 7:34 am

    What, you never heard of the American Petroleum Institute? I don’t see a ton of evidence to support the idea that scientists are less susceptible to this.

    I know from my own experience that former legal officials (DOJ, judges, academics, etc.) have been taking these bribes for many years — well-known, household names. The difference is one of degree (it’s more widespread), as well as profile (it gets more press). It also seems to be the case that the right is more in need of fake expertise, and has more money, so it’s more prevalent on their side.

  57. 57.

    Southern Beale

    October 6, 2010 at 8:17 am

    The best part about the movie “The Social Network” was where it showed Lawrence Summers to be an arrogant, clueless prick.

  58. 58.

    Michael

    October 6, 2010 at 8:27 am

    The reason this sort of thing doesn’t work in science is that scientists have to back up their claims with reproducable evidence. If they cannot then the scientific community will take away their secret decoder ring and they will lose the only currency that matters in science; credibility.

  59. 59.

    cmorenc

    October 6, 2010 at 8:36 am

    @freelancer (itouch):

    Science takes active measures to eliminate bias, human, or otherwise. It is the interrogation of the reality of the Universe, there’s no room within its construction for an investigator whose methodology and interrogation technique is knowingly flawed. Those that do are not called scientists, but pseudoscientists. Economics is an entirely human construct, not a natural one.

    But…but…but what about all that advanced calculus that Phd economists cram into their learned papers to prove their hypotheses? Math is the cornerstone of science, econ is full of math, therefore econ IS science, smarty pants.

  60. 60.

    RSA

    October 6, 2010 at 8:44 am

    @The Moar You Know:
    __

    It’s because economics is a belief system, as opposed to science, which, unlike economics, requires one to test a hypothesis and obtain reproducible results before declaring a theory as proven.

    Pretty much, as long as we accept WyldPirate’s important “quibble”.

    It’s always bemused me, in listening to people who call economics a science, that there exist so many well-respected economists who hold views directly opposed to other well-respected economists, and despite all of the predictions and explanations about the real world that are offered, no one ever seems to change their mind. Sure, economics is complicated, but you’d think that if economists make a prediction that turns out to be badly wrong, they’ll rethink their basic assumptions. Does that ever happen?

  61. 61.

    jcgrim

    October 6, 2010 at 9:57 am

    Perhaps the wonder is that this doesn’t happen more in, say, the sciences. There are almost no climate scientists willing to shill for Koch et al.

    It does happen in the sciences. Read “Merchants of Doubt” (2010) by Naomi Oreskes and Erik Conway. They tell the story of a small subgroup of high-level scientists paid by the tobacco industry and the oil industry to mislead the public about the effects of tobacco and climate change.
    Quote from the book :”Doubt is our product,” and the paid experts provided it. Discrediting the EPA opposing independent scientists were all targets of the campaign.

    Many think-tanks have tight connections to industry and government and pay scientists to mislead the compliant press and public with phony facts. The market fundamentalists have perfected their PR by feeding bad research through seemingly independent institutions such as Cato, The Competitive Enterprise Institute, Center fro American Progress (yes, John Podesta’s “progressive” think tank puts out bad science).

    A slogan from one scientific adviser attacking the EPA Superfund: “behind every tree should stand a private…owner.” To prevent overfishing, the same scientist wanted to privatize the oceans.

    I urge everyone to read this book. The same template of doubt is being replicated for any number of critical issues facing our public well being- from climate change to public schools to health care to clean water to clean energy.

  62. 62.

    Lurked

    October 6, 2010 at 10:39 am

    @jcgrim:

    It’s certainly true that there are plenty of think-tank and industry scientists who will say anything, so of course it’s not the case that all scientists are honest and won’t sell themselves. There are also those who let their ideology get in the way of their assessment of facts–for example, I’ve been acquainted with scientists, mostly outside of atmospheric/Earth sciences, who are teabagger types who eagerly swallow the whole “climate scientists are liars” etc. even though it’s an attack on science and even though they should be able to look at the evidence themselves and understand the arguments reasonably well–but they don’t due to ideology.

    That said, I think there is greater intellectual honesty among academic scientists than among academic economists, which is mainly what we are talking about here. Economic theories seem impervious to evidence. Not permitting one’s theory to be falsifiable is highly nonscientific behavior.

  63. 63.

    Brachiator

    October 6, 2010 at 1:16 pm

    @DougJ is the business and economics editor for Balloon Juice.:

    I don’t know if this is because scientists are more honest than economists or if it’s because it’s harder to hide large amounts of bribe money in areas other than finance.

    You have got to be joking.

    At best, science ultimately self-corrects and ferrets out the bullshit, but there are loads of scientists, engineers and others willing to be paid hacks and expert witnesses, and who will also eagerly provide bogus research to provide cover for corporations.

    That said, I think there is greater intellectual honesty among academic scientists than among academic economists, which is mainly what we are talking about here. Economic theories seem impervious to evidence. Not permitting one’s theory to be falsifiable is highly nonscientific behavior.

    I largely agree with this. Worse, some economists make a huge deal over the elegance of their economic models, whether or not these models have anything remotely to do with reality.

  64. 64.

    Nutella

    October 6, 2010 at 1:30 pm

    @Mr. Furious:

    The fact that Larry Summers had a fucking desk with his name on it in the Obama Administration is one of the single most annoying/disappointing things about the last two years.

    Even more infuriating is the fact that Raghuram Rajan does not.

    Apparently he’s a full professor at Univ of Chicago though, which is surprising. Not in the econ department.

  65. 65.

    Nathanael

    October 6, 2010 at 11:02 pm

    It’s because the sciences have established academic standards — ones which include intellectual honesty and respect for reality — and violating them gets you kicked out of respectability, and probably out of your professorship. As has happened to the creationists.

    In economics, there is no such academic standard. Liars and shills can get professorships and keep them, and they’re still invited to economics conferences. The comparable situation would be if Summers and Mishkin were disgraced and unable to get jobs or invitations to universities, and if any attempt by government to employ them led to concerted attacks from academics.

    I’m beginning to think that the *real* economists, the ones who respect empirical evidence, are going to have to invent a new profession name and start a new set of university departments which *have* decent academic standards, because the name of “economics” is tarred.

    I would note that this has happened in the past, to “philosophy” (where a zillion branches went down the rabbit hole, and most of the functional ones split into other departments).

  66. 66.

    Nathanael

    October 6, 2010 at 11:06 pm

    @burnspbesq: Taking money to give expert witness testimony when you’re not an expert, and in fact don’t know jack about the subject you’re testifying on? Yeah, that *is* dishonest and unethical.

    If they weren’t *wrong* about everything, it would be different.

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