A blog about movies and the Sturbridge area, including The Brookfields, Brimfield, Charlton, Holland, Wales, and Spencer as well as adjacent towns.

Monday, April 27, 2009

VINDICATION! The Sturbridge Times Magazine Scoops Business Week

In the April issue of the Sturbridge Times Magazine my monthly column argues for separation of economy and state. My thesis is that the economists as a profession blew it. They were worthless in predicting the course of events. If past is prologue, I doubt they have a the solution. To depart from the vast humility I am justly noted for, I quote myself,

The solution so far has been to throw money at the problem. There have been two schools of thought about what that would do. Supporters have posited that it would re-liquefy the banking system and restart lending. Opponents claimed it would lead to Weimar style inflation. So far neither result has occurred. Deflation has instead happened. Almost none of the Ph.Ds predicted that and no one has lost a sinecure due to the error.

It would have been churlish of moi not to suggest a way out of our crisis,

A radical departure is necessary. Knowing that my country needs me, I have decided to organize The Long Hill Institute of Public Policy (LHIPP). Not lightly do we propose a constitutional amendment.

The doctrine of Separation of Church and State has served us well. The founders knew they would only cause havoc if they tried to choose a state religion. Well, the country has failed to choose the right financial faith. Therefore, we at the LHIPP realize that this must stop and we propose Amendment 28, There shall exist no branch or department of the Federal Government dealing with the economy.

You say chaos will ensue? Sorry, it’s here, begun under one administration and continuing in the current government. The proposal does not mean that the government can’t lay and collect taxes. It just won’t be able to effect a grandiose fiscal policy.

Fully understanding that I am a dilettante, I never expected that anyone would see the failure for what it was. Yet someone did. Business Week Magazine had a front page headline, What Good Are Economists Anyway? Well, I said that myself in so many words and I beat a national publication to the punch.

The author, Peter Coy is the mag’s Economics editor. You know the article is going to be overlong when you read the subtitle, Why they failed to predict the global economic crisis—and why their help is still crucial to a recovery. Okay, the lads, and some lasses botched it and yet they are necessary to cure it. He seems to be saying, if they study harder, then they can solve it. As if their will be some harmonic convergence that will lead us to the economic promised land. It’s a touching faith, but a cargo cult would be less irrational.

No, economists are always going to botch it because there are too many of them and even if some really get it right, not enough, if any, will to matter. I ended my now landmark piece with the following folk tale about the world of economics that I heard years ago. Congress was frustrated by its inability to get to the bottom of our nation’s financial problems. In light of the conflicting advice received, they decided to call in all the economists to testify and try to reach some consensus. At the end of the testimony, the chairman, an old aristocratic, southern senator addressed the last economist, “Suh, we’ve had y’all in here for several weeks and we have not heard any consistent thoughts from you. Can I ask you, are there any in your field who are acknowledged as having a true understandin’ of the subject.” The witness responded, “Yes Senator, there are two. One with the Bank of England and One with the Rothschilds in Paris.” The Senator, delighted responded, “What do they say.?” The witness replied, laconically, “They disagree.”

My only problem now is thinking about what I will say in my acceptance speech when I go to Stockholm to accept the last Nobel Prize in Economics.

To read the original article, click here and then click on the link do download a copy. go to page 16.

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