Saturday, January 21, 2012

"The crisis raises legitimate questions about the system itself"

Mohamed El-Arian - the chief executive of a major global investment firm, PIMCO - asks some serious questions about the  capitalist system itself, HERE @ Financial Times: "four years into the crisis, little has been done to repair the damage coherently and comprehensively and to safeguard the real victims, let alone counter the risk of further costly dislocations."

Economists at Sea...

Economist Robert Johnson suggests some ways to salvage the reputation and relevance of his profession in the wake of multiple economic crises and an increasing sense that the "experts" have been either bought off or are clueless:
As the Oscar-winning documentary Inside Job illustrated, there is a very lucrative market for false visions of financial-market behavior that legitimate the desires of participants to be unshackled and make more money. But good policy prescriptions are public goods that represent the social good and not just the concentrated financial interests. Unfortunately, as economists beginning with the work of Adam Smith have repeatedly shown, public goods are under­provided in the marketplace. In addition, the reputation of the economics profession is itself a collective good, and those who have tarnished it are not adequately penalized for the damage they do to their fellow professionals when they accept large sums of money in return for marketing a perspective that benefits vested interests.

These are problems that some within economics have been aware of for a long time, but the discipline as a whole has been unable to address them. The onus is on the profession to face these challenges and help lead society off the rocks.

How to Save Economics