Archive for the Economics Nobel Category

Domestic Economic Terrorism and National Security (Nov. 23, 2009)

Posted in Bailout/Bribe, Economics, Economics Nobel, Education on November 23, 2009 by e-commentary.org

. . .

“Their secret badge gives them away.  They sport the tell-tale ‘White Bling-Bling’ – the porcelain American flag on their blue serge suits.”

“And are themselves among the most vocal boosters of the ‘war on terror.’”

“They really are the economic terrorists.  And irony is not their strong suit.  I never fail to be amazed that the economic terrorists are roaming freely within our borders.  Their economic shenanigans produce absolutely no real economic, financial and/or fiscal benefit of any kind for anyone but themselves.”

“Look at it from their perspective.  They acquire a thriving company created and developed by others over years or decades, loot any funds for themselves, vest it with unbearable debt, fire the employees and ramble on to the next victim.  You have to admit that they are doing something.”

“There is no justification, no explanation, no rationale, and no excuse for their activities.  They steal from the public and ultimately loot the public fisc.  Can you name three individuals who have legitimately made a fortune in the last decade?”

“By name?”

“The robber barons of old actually produced something.  They produced a railroad or a newspaper or a steel plant and then endowed a university and a foundation.  Today’s economic terrorists are above the law because they own those who make the laws and those who interpret and enforce the laws.  The profitable universities exist to vet and supply obedient new recruits.  The Nobel Committee awards their mathematical sophistry.  The federal government rewards and bribes and bails out the players at every turn.  Everything is working against us.”

“And there is nothing you can do about it.  Nothing.”

“There are at least six major cavils with their exploits.  These economic terrorists threaten the efforts of generations of Americans who worked and sacrificed to:

form a more perfect Union,

establish Justice,

insure domestic Tranquility,

provide for the common defense,

promote the general Welfare, and

secure the Blessings of Liberty to ourselves and our Posterity.”

“And thwart the pursuit of happiness.”

“That too.  Willfully destroying the American economy is also willfully destroying America.  That is a threat to American security.  That is treason.”

. . .

[See the “e-ssay” dated Nov. 27, 2006 entitled “Higher Education Tomorrow” discussing the pipeline of privileged kids pouring into I (investment) banking, the “e-ssay” dated Feb. 23, 2009 entitled “Close the Harvard Business School,” the “e-ssay” dated Oct. 6, 2009 entitled “Skip the Nobel in Economics?,” and the “e-ssay” dated Feb. 9, 2009 entitled “1000 AUSAs” suggesting that a return to the rule of law or a turn to the rule of law is warranted.  That will require the courts to issue many warrants.  The other “e-ssays” collected under the “Categories” for “Economics” and “Federal Reserve” among others provide additional pieces of the puzzle.]

Take it easy Thursday.

Bumper stickers of the week:

Support the “War on Terror”: Indict an Economic Terrorist

Better to know the judge and to own the lawmakers than to know the law and adhere to it.

Skip the Nobel in Economics? (Oct. 6, 2009)

Posted in Awards / Incentives, Economics, Economics Nobel on October 6, 2009 by e-commentary.org

Nobel Prizes are announced in the next week.  This may be the year not to award the Sveriges Riksbank Prize in Economic Science in Memory of Alfred Nobel.  Okay, there may be some deserving recipients.  Maybe.  However, the discipline and the profession are failing.

Macroeconomic models are founded on fallacious assumptions about “rational” behavior and thus their conclusions are unfounded.  An individual is greedy but not rational in a predictable way.  Few individuals act in a “self-interested” way which is adequately defined as gilded greed undergirded by thought, reflection and calculation.

The “quants” on Wall Street may be quaint.  They are the economists who purported to be able to assess and manage and even eliminate risk using complex and inscrutable formulas.  There is always risk; the only question is who assumes the risk and suffers the downside.  Asserting and rewarding the proposition that “2 + 2 = 5” does not mean that “2 + 2 = 5.”  The quants and their kin were engaged in fraud perpetrated with numbers and formulas rather than with letters and syntax.  The Nobel Committee rewarded their efforts; the government rewarded their failures.

Someone interested in pursuing a Piled higher & Deeper (Ph.D.) in economics must buy into the established orthodoxy of a school and a school of thought.  Someone matriculating at a university is endorsing a worldview that is not based on an accurate view of the world.  The free-for-all culture in economics departments does not promote or provoke unrestrained free thought.  Economics departments are profit maximizing; they will produce whatever is rewarded.

Or they should give it to someone who knows something about economics and has conveyed a few sound ideas.

Bumper sticker of the week:

If all economists were laid end to end, they would reach the wrong conclusions.

1000 AUSAs (February 9, 2009)

Posted in Bailout/Bribe, Crime/Punishment, Economics, Economics Nobel, Law on February 9, 2009 by e-commentary.org

Some commentators are suggesting that the current economic crisis is a result of amnesia.  Too many years have passed since the failure of Long-Term Capital Management, a business that pursued a short term business scam, they say.  LTCM followed an economic formula developed among others by Robert Merton and Myron Scholes who both won the Nobel Prize in Economic Sciences in 1997.  They won for “a new method to determine the value of derivatives.”  Derivatives are a steal for those who do the stealing and costly for the taxpayers who ultimately bail them out.  Their “value” to society:  pricey.  Does the Nobel Committee ever revoke its prize?

The problem, so the thinking goes, is that everyone simply forgot.  No one needs to remember.  Business types respond to current incentives and disincentives not to moral intoning or calls to virtue.  The message being sent today is simple and straight forward:  Crime pays.  Not only the criminal act itself but the cost of remedying the criminal act.

The Justice Department should hire 1000 new Assistant United States Attorneys (AUSAs) to prosecute the massive fraud that has been perpetrated on Wall Street for the last half dozen years.  This is not some undigested populist anger.  Without the restoration of the rule of law, the economic culture of the country will continue to rot.

Bumper sticker of the week:

Crime pays in the US of A.