> Eubulides wrote:
>
>> Or we could say that reputation effects are subject to Minsky moments
>> too; reputations are destabilzing and subject to Ponzi processes
>
> We should say it has been used as cover for predation.
>
> Shane
Quite.
Yet I fear my words ain't clear; I was struggling to convey that the reputational effects the profession has served up for it's members was an epistemological Ponzi scheme that ran for decades.
>From Friedman's 1953 essay to the performative aspects of all those
valuation/quant books for MBA's and the finance geeks that get five stars on
Amazon.com; from Stephen Ross' work to the piece last summer in the FT
announcing the utter worthlessness of dynamic stochastic general equilibrium
models --who knew!?!-- and to the recent, scarce, commentary on the utter
lack of attempts to dismantle the groupthink at the AEA conference in SF,
the economics profession is, for now silently, fearful of recognizing the
utter insolvency of methods and the opportunity cost of ignoring not only
Minsky [their current security blanket] but more importantly Leontief
[industrial ecology meeting input-output and material flows analysis with
the attendant policy prescriptions for ecologically sane technological
change will likely prove to be utterly incompatible with capitalism],
Pasinetti and the radical legal theories of the 20th century which
redescribed and explained the market-state dynamics that even a bearded guy
with carbuncles would have appreciated.
Sadly, it's going to be a while before a humility cascade percolates through the profession -- just look at how giddy Larry Summers is-- even as involuntary unemployment begins it's long tragic shift on a fractal we can barely visualize and capitalists are jumping in front of speeding trains...............
Will the protection rackets even recover? Will K Street save Wall Street? Will Warren Buffett give up candy? Fire up the uncertainty furnace.
Oh, and the Black book; "great" stuff. For those who haven't picked it up, I'll write yet again--grab it while it's still available.
Ian