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Ten years after

from David Ruccio

Everyone, it seems, is writing their version of the lessons to be learned after the crash of 2008. And most of them are getting it wrong.

Here, for the record, are some of the lessons I’ve taken from the crash:

  1. What has changed—and, equally significant, what hasn’t—during the past decade?
  2. Mainstream economists got globalization wrong
  3. The policy consensus on economics has not fundamentally changed
  4. Mainstream economics has fallen in the eyes of the public—and for good reason
  5. Little has changed in terms of the teaching of economics
  6. Mainstream economists reject the new populism, which they helped to create
  7. The normal workings of capitalism created, together and over time, the conditions for the most severe set of crises since the first Great Depression
  8. Mainstream economists, for the most part, haven’t even attempted to make sense of the role inequality played in creating the Second Great Depression
  1. Buck
    September 14, 2018 at 3:03 pm

    The points are well taken, but the motive is not well defined. Today, an economist is generally a paid mouthpiece for banksters who have been granted an outrageous gift by corrupt politicos beginning with the Rothschild Illumunati, as depicted on the U.S. dollar. This New WORLD(LY) ORDER replaced clerical principle that was enshrined in most sate constitutions [against usury] with a cartel of sheister thieves who make the Mafia look like choir boys.

  2. September 14, 2018 at 8:20 pm

    David, I am realizing an earlier comment was filtered out for length. Of course, the correction in my previous comment was of myself. Now, I will simply plug one of my own 10-years-after posts briefly. (You don’t mention any examples.) I recall your commitment to a pluralism of approaches at the graduate level. Thanks. Here is the above-mentioned link:
    https://greghannsgen.org/2018/09/09/ten-years-after-crisis-hit-economics-textbooks-ripe-for-composting/
    Greg, Greg Hannsgen’s Economics Blog
    Healthy Vegan Hudson Valley

  3. Edward Ross
    September 15, 2018 at 5:35 am

    In response to David RuccioSeptember 14, 2018
    As I have repeatedly posted, people who had lived through thru the great depression ,,or grew up listening to the older generation account of the great depression, had a better understanding than the ivory tower theorists smugly isolated from the real world. From this observation it was these peoples experience that ,despite their lack of education their concern was what Keynes had warned against in (1933) that “free trade, international mobility of capital and foreign ownership of national assets” was likely to creat a repeat of the great depression.

    From this background I think you have highlighted where the conversation to reform economic theory and policy needs to start. At the same time I strongly believe the conversation needs to begin by listening to the people and answering their concerns. as expressed by Buck.

    Here I acknowledge that it is possible that a large portion of the public may seem uninterested, but in my humble opinion part of their lack of interest is because they do not think any notice will be taken of their concerns. Here I think the concept of Homo Economic us and its ridiculous deterministic assumption that all people will act in a certain manner needs to be rejected on the basic, everyday understanding that ultimately an individual or group could have done otherwise.

    Thus I support your points and add that in my opinion the conversation needs to start by listening to the people. Then examining the history of how we arrived at the present so that we do not repeat the mistakes of the pas,t before engaging in theoretical conversations that are disconnected from the real world.Ted

  4. September 20, 2018 at 1:13 pm

    Economists don’t respond to events like the financial crisis 2007-2008 for primarily two reasons. First, their work is the study and defense of firms and investors. George H.W. Bush once remarked rather off-hand that he couldn’t understand what the purpose of Americans was who weren’t either investors or operators of business firms. His views reflect those of economists. In a private market the primary elements are, per economists investors and firms. Most of the “American public” is neither, except occasionally in some small way. In other words, for economists, and Presidents (and other politicians) like George H.W. Bush, there is no “public” economics. Thus over 90% of economic actions and actors don’t even show up in analyses by professional economists. Worried home owners, Americans borrowing too much or unwisely, workers’ concerns about job security and wages, “gig” economics, etc. are at best secondary interests of economists. Economists tend to believe investors, CEOs, and bank presidents. So, when these actors say all is well, economists generally repeat, “all is well.” For bankers, CEOs, and investors after the crisis turns out all is well. After 10 years many others are still trying to fill the holes left by the crisis of 2007-2008. Secondly, even if economists can perceive such crises in advance, their interest in and ability to address them and their consequences effectively is negligible. Since economists mostly don’t understand the history or consequences of such crises, addressing the crisis is more trial-and-error than tried and tested strategies. Also, I’m on board with all the comments here.

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