Wednesday, 17 October 2012

The worst Nobel Prize ever?

imageGuest post by Keith Weiner

Amidst global economic collapse, *THIS* is what wins the Nobel Prize in Economics?!?

The world is building a tower of debt unprecedented in any prior era. The derivatives tower is estimated to be one quadrillion dollars.  It has taken unprecedented government injection of methamphetamine to "stabilize" things, and every central bank and government knows they dare not reduce the drip or the patient will collapse.

"The economy is recovering,” sayeth the Fed, “and zero interest rates will continue until 2015, and we will buy $40B+ of mortgage bonds per month with no set limit,"  Unemployment goes down only because people drop out of the workforce and onto welfare, disability, or social security when their patience (and savings) run out.

The marginal productivity of debt--how much additional GDP does the next dollar of borrowing buy--has been falling for many decades.

Capital destruction continues to accelerate. Savers are hosed, and let's not even talk about people trying to live on a fixed income!

Keynes' theory, the bedrock of the modern economy, is in a shambles (or ought to be if people could think their way out of a wet paper bag). And the most prestigious prize in economics?

Yeah, let's award that to a couple of guys who have played with a model for central planning when money cannot be used (e.g. organ donations, where buying organs is illegal).



Anonymous Justin Raine said...

hrrummph, beards!

17 Oct 2012, 19:34:00  
Blogger Paul Walker said...

Me thinks a little understanding of what Shapley and Roth have in fact done would help. As a start see Anti-dismal and Offsetting Behaviour

17 Oct 2012, 20:08:00  
Anonymous Anonymous said...

Worst prize ever - Barack ibn Kenya.

Second worst prize - Fourth Reich.

Then there's Chamberlain, Marshall, Hammarskjöld, Pauling, MLK, UNICEF, UNHCR, Sakharov, Amnesty International, Tutu, IPPNW, Dalai Lama, Arafat, Carter, Anan, IAEA, ElBaradei, IPCC...

compared to that, this is chicken feed.

17 Oct 2012, 23:11:00  
Blogger Peter Cresswell said...

@Paul: "Economist defends other economists SHOCK!"

18 Oct 2012, 09:51:00  
Blogger Paul Walker said...

@Cresswell More, economists defend people who save lives, no great shock.

18 Oct 2012, 10:17:00  
Blogger Peter Cresswell said...

@Walker: More, economist ignores point that committee ignores economics in crisis and focusses instead on minutiae.

18 Oct 2012, 11:06:00  
Blogger Paul Walker said...

@Cresswell Saving people's lives doesn't seem like minutiae. And when you look at other areas of market design like the auctioning of radio spectrum by governments all round the world, again hardly minutiae.

And BTW economics is not in crisis. I've yet to see any crisis in the theory of the firm or experimental economics or health economics or public economics or public choice or development economics or environmental economics or industrial organisation or economic history or law and economics or .........

18 Oct 2012, 13:04:00  
Blogger Peter Cresswell said...

@Walker: You seem to have missed the Global Financial Crisis, and the inability of mainstream economists to say anything meaningful about it, either before or after it began.

18 Oct 2012, 16:25:00  
Blogger Eric Crampton said...

Roth has effectively used economic method in politically astute ways to save lives and, more debatably, encourage a culture shift towards that trade in organs be allowed (which would save far more lives).

It isn't the prize I would have given this year. But Roth was very plausibly in the queue for sometime over the next 20 years.

19 Oct 2012, 13:34:00  

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