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shared by Benno Hansen on 15 Jul 09 - Cached

the character of neoliberal economics is essentially religious
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neoclassical economics appears scientific. This is because it deploys huge quantities of complex mathematics, giving it the veneer of being what it has long hoped to be, a kind of social physics.
- Benno Hansen on 15 Jul 09
  
  APPEARS scientific isn't
  
  <div class="cArrow"> </div><div class="cContentInner">APPEARS scientific isn't</div>
  
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Neoclassical economics looks like physics because the equations were those of physics. Its history is a history of problematic borrowings from the natural sciences, leading to a mathematical sophistication increasingly divorced from reality.
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...4 more annotations...
Equations prove free markets work, but only in a sterile world of mathematical abstraction that relies on ridiculous assumptions such as perfectly competitive markets.
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Once economics loses its status as science, its religious aspects become more obvious.
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neoliberalism as practised by Greenspan and his ilk as making capitalism a religion, the market a god and economics a form of theology
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free markets needed their own Richard Dawkins
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shared by Benno Hansen on 01 Sep 10 - Cached

A leading economist has likened the nation's acceptance of free-market capitalism to that of the brainwashed characters in the film The Matrix, unwitting pawns in a fake reality.
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aims to disprove what he sees as economic myths, including the idea that people are paid what they are worth, that the "trickle down" effect of increasing wealth among the rich helps the poor, and that education makes countries more prosperous.
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"Another myth that needs to be busted is the idea that we can discuss economics without any moral implications,"
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...3 more annotations...
free-market capitalism has left the global economy more unstable
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"In conventional economic theory, it is thought that we are born as perfectly formed, rational, self-serving agents. But where you work and what kind of work you do are important in determining your character."
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the effects of not having equality of outcome are felt by the next generation
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shared by Benno Hansen on 24 Sep 09 - Cached

shared by Benno Hansen on 17 May 09 - Cached

Nationalise the banks, limit the rewards to those who work in what he calls the “utility” part of the system and have a completely uninsured second leg that can take all the risks it wants and lose its shirt
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You can’t have capitalism without punishment
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shared by Benno Hansen on 18 Jan 10 - Cached

Liberal analysts, by contrast, are more likely to focus on the way Greenspan's aversion to regulation transformed pell-mell innovation in financial products and excessive bank leverage into lethal phenomena.
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Paul Krugman, who noted in one interview: "Regulation didn't keep up with the system."
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excessive reliance on mathematical models like the VAR and the dread Gaussian copula function, which led to the underpricing of unpredictable forms of risk
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...8 more annotations...
"Financial innovation + inadequate regulation = recipe for disaster is also the favored explanation of Greenspan's successor, Ben Bernanke
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fallacies of free-market fundamentalists
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after the West won the Cold War, capitalism could go naked
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globalization spread the toxicity from one country's mortgage market to the rest of the world
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the free market itself is to blame for the recent troubles
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most libertarians and Wall Street Journal editorial page contributors continue to insist that government caused the whole ordeal
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the economy fell prey to recurring delusions about risk and bubbles
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Conservative economists—ever worried about inflation—tend to fault Greenspan for keeping interest rates too low between 2003 and 2005 as the real estate and credit bubbles inflated.
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shared by Benno Hansen on 17 Jul 09 - Cached

In the public mind an arrogant profession has been humbled.
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Paul Krugman, winner of the Nobel prize in economics in 2008, argued that much of the past 30 years of macroeconomics was “spectacularly useless at best, and positively harmful at worst.”
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Barry Eichengreen, a prominent American economic historian, says the crisis has “cast into doubt much of what we thought we knew about economics.”
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macroeconomics and financial economics—are now, rightly, being severely re-examined
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No economic theory suggests you should value mortgage derivatives on the basis that house prices would always rise.
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Macroeconomists also had a blindspot: their standard models assumed that capital markets work perfectly.
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everybody needs to work harder on understanding asset bubbles and what happens when they burst
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shared by Benno Hansen on 17 May 09 - Cached

The same people who did not see the financial crisis coming are still in charge.
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The financial system needs to be more robust against "black swans." This will require living with less debt.
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We need to eliminate the socialization of risk, privatization of profits.
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...2 more annotations...
We should get out of the mentality that we need to build debt on top of housing to drive the economy.
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We need to invest in real (productive) physical and human capital
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