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Did the Fed Economist Slam Bloggers for the Same Reason that Fundamentalist Priests Slammed the Printing Press?
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Kartik Athreya of the Richmond Federal Reserve Bank argues
that bloggers are stupid, and that only PhD economists have a right to
say anything about economics policy.
This distinction is a little
ridiculous, given that many
of the world’s top PhD economics professors are bloggers.
And
it must be noted that the Fed ignores any PhD economist who exercises
any scintilla of independence.
For
example, all
of the PhD economists who say the economy won't recover unless we
break up the giant banks are ignored (even if they happen to be former
Federal Reserve chairmen or Fed Bank presidents).
And
well-known PhD economist James Galbraith is ignored when he argues
that - because fraud caused the economic crisis - economists should
move into the background, and "criminologists to the forefront".
And
of course, the PhD economists calling for a complete audit of the Fed
or - heaven forbid - a challenge to Fed powers, are ignored.
In
fact, as I pointed
out in December, most economists don't exercise any independent
thinking because economists are trained
to ignore reality:
As I have repeatedly noted,
mainstream economists and financial advisors have been using faulty and
unrealistic models for years. See this,
this,
this,
this,
this
and this.
And
I have pointed out numerous times that economists and advisors have a
financial incentive to use
faulty models. For example, I pointed
out last month:The decision to use faulty
models was an economic and political choice,
because it benefited the economists and those who hired them.For
example, the elites get wealthy during booms and they get wealthy
during busts. Therefore, the boom-and-bust cycle benefits them
enormously, as they can trade both ways.Specifically, as Simon
Johnson, William K. Black and others point
out, the big boys make bucketloads of money during the booms using
fraudulent schemes and knowing that many borrowers will default. Then,
during the bust, they know the government will bail
them out, and they will be able to buy up competitors for cheap
and consolidate power. They may also bet against the
same products they are selling during the boom (more here),
knowing that they'll make a killing when it busts.But
economists have pretended
there is no such thing as a bubble. Indeed, BIS slammed
the Fed and other central banks for blowing bubbles and then using
"gimmicks and palliatives" afterwards.It is not like economists
weren't warning about booms and busts. Nobel prize winner Hayek and
others were, but were ignored because it was "inconvenient" to discuss
this "impolite" issue.Likewise, the entire Federal Reserve model
is faulty,
benefiting the banks themselves but not the public.However, as
Huffington Post notes:The
Federal Reserve, through its extensive network of consultants,
visiting scholars, alumni and staff economists, so thoroughly dominates
the field of economics that real criticism of the central bank has
become a career liability for members of the profession, an
investigation by the Huffington Post has found.
This dominance
helps explain how, even after the Fed failed to foresee the greatest
economic collapse since the Great Depression, the central bank has
largely escaped criticism from academic economists. In the Fed's
thrall, the economists missed it, too.
"The Fed has a lock on
the economics world," says Joshua Rosner, a Wall Street analyst who
correctly called the meltdown. "There is no room for other views, which
I guess is why economists got it so wrong."The
problems of a massive debt overhang were also thoroughly documented by
Minsky, but mainstream economists pretended that debt doesn't matter.And
- even now - mainstream economists are STILL willfully ignoring things
like massive
leverage, hoping that the economy can be pumped back up to
super-leveraged house-of-cards levels.As the Wall Street Journal
article notes:
As they did in the two revolutions in
economic thought of the past century, economists are rediscovering relevant work.It
is only "rediscovered" because it was out of favor, and it was only
out of favor because it was seen as unnecessarily crimping profits by,
for example, arguing for more moderation during boom times.The
powers-that-be do not like economists
who say "Boys, if you don't slow down, that bubble is going to get too
big and pop right in your face". They don't want to hear that they can't make endless money using
crazy levels of leverage and 30-to-1 levels of fractional reserve
banking, and credit derivatives. And of course, they don't want to hear that the Federal Reserve
is a big part of the problem.Indeed, the Journal and the
economists it quotes seem to be in no hurry whatsoever to change things:
The
quest is bringing financial economists -- long viewed by some as a
curiosity mostly relevant to Wall Street -- together with
macroeconomists. Some believe a viable solution will emerge within a
couple of years; others say it could take decades.Saturday,
PhD economist Michael Hudson made
the same point:I
think that the question that needs to be asked is how the discipline
was untracked and trivialized from its classical flowering? How did it
become marginalized and trivialized, taking for granted the social
structures and dynamics that should be the substance and focal point of
its analysis?...To answer this question,
my book describes the "intellectual engineering" that has turned the
economics discipline into a public relations exercise for the rentier
classes criticized by the classical economists: landlords, bankers and
monopolists. It was largely to counter criticisms of their unearned
income and wealth, after all, that the post-classical reaction aimed to
limit the conceptual "toolbox" of economists to become so unrealistic,
narrow-minded and self-serving to the status quo. It has ended up as
an intellectual ploy to distract attention away from the financial and
property dynamics that are polarizing our world between debtors and
creditors, property owners and renters, while steering politics from
democracy to oligarchy...[As one Nobel prize winning
economist stated,] "In pointing out the consequences of a set of
abstract assumptions, one need not be committed unduly as to the
relation between reality and these assumptions."This attitude did not deter him from
drawing policy conclusions affecting the material world in which real
people live. These conclusions are diametrically opposed to the
empirically successful protectionism by which Britain, the United States
and Germany rose to industrial supremacy.Typical of this
now widespread attitude is the textbook Microeconomics by William
Vickery, winner of the 1997 Nobel Economics Prize:
"Economic
theory proper, indeed, is nothing more than a system of logical
relations between certain sets of assumptions and the conclusions
derived from them... The validity of a theory proper does not depend on
the correspondence or lack of it between the assumptions of the theory
or its conclusions and observations in the real world. A theory as an
internally consistent system is valid if the conclusions follow
logically from its premises, and the fact that neither the premises nor
theconclusions correspond to reality may show that the theory is not
very useful, but does not invalidate it. In any pure theory, all
propositions are essentially tautological, in the sense that the results
are implicit in the assumptions made."Such disdain for empirical verification is
not found in the physical sciences. Its popularity in the social
sciences is sponsored by vested interests. There is always self-interest
behind methodological madness. That is because success requires heavy
subsidies from special interests, who benefit from an erroneous,
misleading or deceptive economic logic. Why promote unrealistic
abstractions, after all, if not to distract attention from reforms aimed
at creating rules that oblige people actually to earn their income
rather than simply extracting it from the rest of the economy?As
I have previously written, mainstream economists and financial
advisors who promote flawed models are not necessarily bad people:I
am not necessarily saying that mainstream economists were
intentionally wrong, or that they lied because it led to promotions or
pleased their Wall Street, Fed or academic bosses.But it is
harder to fight the current and swim upstream then to go with the flow,
and with so many rewards for doing so, there is a strong unconscious
bias towards believing the prevailing myths. Just like regulators who
are too close to their wards often come to adopt their views, many
economists suffered "intellectual capture" by being too closely allied
with Wall Street and the Fed.As Upton Sinclair said:
It
is difficult to get a man to understand something, when his salary
depends upon his not understanding it.
See
this,
this,
this,
this
and this.
Michael
Rivero may have the
hardest-hitting critique of all:
This seems to be a return to
the mindset of the middle ages where only the clergy were allowed to
read and interpret the bible and the laity were presumed incapable of
comprehending the intricacies and subtle nuances of the faith.
And
indeed there is a great deal of similarity between economics and
[fundamentalist version of] religion in that both depend on the
unquestioning faith of the masses that those pretty printed pieces of
paper represent something real, albeit invisible.
But the
advent of the printing press led people to take a closer look at the
actual content of [fundamentalist version of] religion and it has been
revealed not as a complex and sophisticated system but as a mish-mash
of half-baked myths and legends often in contradiction with itself and
used to enrich the church ....The same is true of eocnomics. the
advent of the blog has led people to take a closer look at the actual
content of economics and it has been revealed not as a complex and
sophisticated system but as a mish-mash of half-baked theories and math
often in contradiction with itself and used to enrich the bankers and
conceal their fraud against the public. Athreya is reacting to the
blogs the way [fundamentalist] priests reacted to Gutenberg's Printing
Press.
The fraud and danger of the Federal Reserve system of
banking stands exposed to the public eye, sans the "benefit" of correct
interpretation by the self-appointed priests of Mammon. The public now
understands that when a private bank issues the public currency at
interest, debt will always exceed the available money supply. The
public now understands that the Federal Reserve is no more Federal than
Federal Express. The public now understands that the Federal Reserve
is a legalized counterfeiting operation, that creates the money they
loan out out of thin air! The public now understands that the Federal
Reserve system of banking, since its creation in 1913, has reduced the
value of a dollar down to about four cents! The public now understands
that the Federal Reserve system is a pyramid scam that only works when
ever larger populations of borrowers can be found, and that once an
entire nation or planet has borrowed to the max, the system must crash
(which is what is happening now).
Just as the [fundamentalist]
priests, stripped of the arcane scriptures and rituals, stand exposed
... so too the economists, stripped of their arcane equations and
theories, stand exposed ....
Karthik Athreya doesn't like that
fact that the public sees the Federal Reserve for what it really is.
- advertisements -
Central banking power elite = dinosaurs
Anti-Ponzi, pro-liberty, anti-central banking citizens = mammals
Internet = Chixulub asteroid
"Did the Fed Economist Slam Bloggers for the Same Reason that Fundamentalist Priests Slammed the Printing Press?"
No. Fundamentalist priests DON'T slam the printing press.So one of your premises is wrong. Fundies embrace the printing press. It is the one of the most effective way to spead the word of God. That the Bible can be printed and read by a regular old guy is powerful ammo for the fundamentalists; because the Bible is pretty much fundamentalist in its content. It pretty much put the old line priests who made their living TELLING you what the Bible says that didn't much care for versions of the Bible in common languages. Somebody might even read it.
I thought that the catholic church was against widespread publishing of the bible in non latin languages as it allowed it to be read and 'interpreted' by individuals rather than it beign required to be interpreted by priests, making the population reliant on the church priesthood for guidance / instructions? I think this is what they are getting at with the reference. It devolves interpretative power and thought to the individual rather than the central authority.
+1 Veddy nice.
Which is why they are doing this:
Obama 'Internet kill switch' plan approved by US Senate panelhttp://news.techworld.com/security/3228198/obama-internet-kill-switch-pl...
WW
A broad based application of an Internet Kill Switch would be a last (and lasting) act of desperation unless it can be selectively applied. Shutting down the Internet stops/slows the economy in a huge way. Bills are now paid and electronic fund transfers are done via the Internet, companies move goods and services by Internet instructions and power companies route power switching instructions via the Internet. This is just a tiny list.
I'm not aware how they could selectively kill only sections. After all, the Internet was designed to work around exactly this type of intervention. I'm wondering if this legislation is being used as a lightening rod to divert attention from other things or subjects?
The net while varied from home pc to home pc is wide ranging, really depends on a small number of root servers that route traffic for the backbones. Effectively shutting down the internet is not hard. Selectively allowing a few IP blocks for gov communication is trivial. Keeping those blocks free from US citizens would be way more than they could ever dream of handling.
These fellows are just one of many and would make wikileaks look like a sunday stroll in your finest:
http://en.wikipedia.org/wiki/L0pht
Fucking with / blackholing DNS would be one very easy way that would stymie the great majority of internet users. Blocking IP ranges within AS would be another, and probably more effective as the ISPs get bigger and fewer.
Has anybody asked Dennis how he feels about that?
Yah, they hab a big power button, but it kill nuttin. Big fake like Warren's buff hairdo.
End game power play, duly noted.
"I'm not aware how they could selectively kill only sections."
The way it's being described in the non-media, and the way they could administer it are two completely different animals.
If you aren't familiar with IXPs (and anyone who is a technoid should familiarize themselves with them) hardware can be utilized, at the packet level, to stop specific types of Web traffic, or traffic from specific sources.
I'll do some research. I really don't know much on this subject so it's time I did. Thanks.
http://en.wikipedia.org/wiki/Internet_exchange_point
I read it, and all I got was ISP is very close sounding to IXP?
e.g.
Q: who's your IXP?
A: What?
Q: I said, who's your IXP?
A: What the fuck are you talking about?
Good point CD.
Old data but pertinent as California would go belly up or belly slam or whatever as they are already belly upped and slammed but losing internet receipts would be a very big, bad deal. If they shut down the internet, I would guess it's time to lock and load.
The government and elite stand to lose much more than a portion of income tax due to the internet. There is a very real possibility that the internet threatens their existence.
10 years ago, people would laugh if it was claimed "I learned/found on the internet".. Now it is the source of information for most.
I have personally been awakened and know dozens more like me, and we are all ready to stand against the propoganda and "concensus", due to the internet.
To me, it's not a matter of if, it's a matter of when and the only if is; IF it's too late..
Extremely salient point. The internet has evolved quicker than the pace of govt to control it. It used to be a quaint thing to look something up on the internet, now its passe.
The internet is increasingly coming to be a huge thorn in the side of the Federal govt who would rather you get your news from approved sources like the AP. China was quick to react to the threat and far be it from the USA to be outdone by the Commies.
China dispenses with the chicanery at least, they want state control and fuck you.
The USA has that goddamn constitution to deal with so it will use a crime fighting tack to impose its will, ie the go-to boogey-boo terrorism.
Why its a compelling national interest to protect the citizenry against terrorists so therefore anonyomous surfing is out.
Never mind the porous border with Mexico, the govt only uses terrorist threats selectively and thats ok.
Obamas new instant 50 million voters who go from being wetbacks to legal voters wont give 2 shits about govt control of the internet, or anything else, a voter should consider.
You sort of have managed to answer your own question -- at least partially.
Modified slightly, your second assertion should help point out what I'm getting at:
But it helps to recognize that this sort of ROBUSTNESS is embodied in the network, or network-of-networks to be more precise -- it is an emergent property of the 'many' aspect of the Internet (many networks, many nodes).
This amazing property does nothing to help to a given 'branch' of the internet that has been destroyed or disabled -- rather the magic is that the 'internet' per se 'does not care' about the missing branch. But, you (or anyone) might personally care a lot about certain branches or nodes becoming inaccessible.
KILL SWITCH is a marketing-branding thing...It is nominal.
The real cherry in this legislation IMHO is just the authority and the power of the MEME that they have been promoting for more than a year now -- from POTUS comments denigrating BLOGS in general, hysteria about 'hate' speech on the internet, the notion of Internet facilitating terrorism in multiple ways, Brzezinski's and N. Rockefeller's comments about same...There are more examples.
I'll go way out on a speculative limb. If we do actually see a "KILL SWITCH" event for whatever stated reason, it will last for the entire maximum 4 months dictated in the legislation, and when it is "turned back on" you will be required to utilize some type of affirmative-electronic identification. Said another way, I am speculating that at that time, it will be extremely difficult and legally forbidden to be anonymous on the internet.
(how bizarre is a pre-designated maximum time length on this? is it just me?) Sorry so lengthy.
No, they cannot shut it down. Where's the switch? And how will we all do business? I can't wipe my ass without the OK from HQ over Terminal Services. May as well go to sleep for 4 months. Get real. Operation Mind-Fuck may be convincing Obama, but he looks stupid, like Libre-Man, the oxymoron.
You guys are talking theory, not practice. Things have changed a lot in the infrastructure since the Internet was first created.
All they have to do is to embed a kill switch in every big WAN router out there. Similar to the backdoor that they allow for lawful intercept. That will take out the major routes, no question. As for any surviving routes, those will quickly become so overloaded that they'll effectively be out of action. Think of the biggest DoS in history.
But they're not going to do this. Too much business depends on the Internet, and it's business which rules Washington, not the other way around.
Too much business depends on the Internet, and it's business which rules Washington, not the other way around.
Think China - "business" and "consumers" will have all the access needed, while "subvertives" will not thanks to all traffic being routed through a backbone that is really one big content-sensitive firewall/filter!
They can easily kill Your Access and millions like you too, without hurting business one little bit.
Please forgive me, as I am honestly not trying to be a Nazi here... I love the SM avatar, and usually mostly agree with your posts, but, um...
Isn't it "MAMBO dogfaced in the banana patch?"
Sorry, sorry... Just sayin'...
Rest assured, the Pentagram will be up and porn-operable.
they better not close down my favorite free porn sites! what else am i going to do beside beat off for next couple of years while living in abject poverty?
Get a job, hopefully?
How 'bout a big, bold, terrorist emergency that shuts down everything - for our safety - then selectively allows access to... you guessed it!
Whew... we narrowly avoided complete net devastation! Aren't we lucky. Such a small price to pay...