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Anonymous Coward writes:
"http://www.theguardian.com/commentisfree/2014/mar/ 18/truth-money-iou-bank-of-england-austerity
Back in the 1930s, Henry Ford is supposed to have remarked that it was a good thing that most Americans didn't know how banking really works, because if they did, 'there'd be a revolution before tomorrow morning.'
Last week, something remarkable happened. The Bank of England let the cat out of the bag. In a paper called "Money Creation in the Modern Economy", co-authored by three economists from the Bank's Monetary Analysis Directorate, they stated outright that most common assumptions of how banking works are simply wrong, and that the kind of populist, heterodox positions more ordinarily associated with groups such as Occupy Wall Street are correct. In doing so, they have effectively thrown the entire theoretical basis for austerity out of the window."
(Score: 5, Interesting) by microtodd on Tuesday March 25 2014, @08:11AM
I was going to reply to your comment and say, with all respect, that there must be more to this. I can't believe that someone "prestigious" or whatever in the industry published a paper that's in an "introduction to monetary theory" textbook and it somehow trickles all the way up. There must be some subtle new "thing" posited in the paper.
However, after some pondering, I had two thoughts.
1) We just saw [dev.soylentnews.org] a SoylentArticle discussing how most academic papers are crap
2) I recall, when the US gov't was considering the huge bank bailout a few years back, a bunch of PhD economists took out an ad in a paper declaring it was a terrible idea and would ruin everything. Then a few days later an different bunch of PhD economists took out an ad in a paper declaring this was a great idea and just what was needed to keep everything from being ruined. It was that moment I realized that most economists must not have a clue. Maybe they understand a lot of theories and math models, but seems like its of very little pragmatic value.
link [wsj.com]
So yeah, maybe you're right.
Sidenote: David Graeber is the professor of Anthropology (of all things) at the London school of Econ. What's the connection between anthropology and economics? This is an honest question. History of money/bartering? How money affects social system? Must be fun to sit around and think about cool stuff like this all the time.
Here's some references for my Point #2, BTW:
http://www.bloomberg.com/apps/news?pid=newsarchive &sid=aNKGD.bJwmRA [bloomberg.com]
http://www.washingtonpost.com/blogs/wonkblog/post/ economists-overwhelmingly-believe-the-bank-bailout -helped-ordinary-americans/2012/03/08/gIQAFH7ZzR_b log.html [washingtonpost.com]
Also also, the URL tag is broken in Soylent's slashcode.
(Score: 1) by Dr Ippy on Tuesday March 25 2014, @06:56PM
(Score: 2) by frojack on Wednesday March 26 2014, @02:58AM
The London School of Economics (LSE) is a college/university with a name that has mostly historical significance. It teaches far more than economics, just as MIT teaches far more than Technology.
It seems to one of the common training schools for those going into government in Great Britain, and not only those in economic fields.
As to why an Anthropology professor is acting all surprised and mildly outraged about Banking's role in fiscal management, instead of walking across the campus and talking to those trained in the field, I have no clue.
While your first set of Economists protested the bail out on their on volition and beliefs, I rather suspect the second set were leaned on heavily to come up with a counter-opinion.
Discussion should abhor vacuity, as space does a vacuum.