Details: Written by: Kamran Mofid; Published: 16 September 2013; Hits: 6964

I was delighted to hear that today after months of contentious public debate Larry Summers has finally withdrawn his name from consideration to become the next chairman of the Federal Reserve.

Why am I happy for this? Because he is a very guilty economist! Let me explain:

On 12 February 2010 I wrote an article under the title of “Global Financial Collapse: The Guilty Economists who destroyed the world and the Economics itself”. Let me quote a passage or two from that article:

It is accepted fact that the economics profession through its teachings, pronouncements and policy recommendations facilitated the GFC (Global Financial Collapse). We also know that danger signs became visible long before the event and that some economists (those with their eyes on the real-world) gave public warnings which if acted upon would have averted the human disaster.

With other learned professions entrusted with public confidence, such as medicine and engineering, it is inconceivable that their professional bodies would not at the very least censure members who had successfully persuaded governments and public opinion to ignore elementary safety measures, so causing epidemics and widespread building collapses.

To date, however, the world’s major economics associations have declined to censure the major facilitators of the GFC or even to publicly identify them. This silence, this indifference to causing human suffering, constitutes grave moral failure. It also gives license to economists to continue to indulge in axiom-happy behaviour. Nor has the economics establishment offered recognition to those economists who were not taken in by fads and fashion and whose competence, if listened to, would have prevented the collapse.

These two silences reveal a continuing moral crisis within the economics profession.”

Anyhow, I was pleased to note that the “Real-World Economics Review” had nominated 10 most guilty economists for the Ignoble Prize for Economics, to be awarded to the three economists who contributed most to enabling the Global Financial Collapse (GFC). Amongst those nominated was, yes, Larry Summers:

“As US Secretary of the Treasury (formerly an economist at Harvard and the World Bank), Larry Summers worked successfully for the repeal of the Glass-Steagall Act, which since the Great Crash of 1929 had kept deposit banking separate from casino banking. He also worked with Greenspan and Wall Street interests to torpedo efforts to regulate derivatives.” (See the entire list of nominees below).

After much deliberation, dialogue and comments there was a vote. More than 7,500 people voted—most of whom were economists themselves from the 11,000 subscribers to the “Real-World Economics Review” With a maximum of three votes per voter, a total of 18,531 votes were cast. The poll was conducted by PollDaddy. Cookies were used to prevent repeat voting. And then the winners were annonunced:

Alan Greenspan (5,061 votes): As Chairman of the Federal Reserve System from 1987 to 2006, Alan Greenspan both led the over expansion of money and credit that created the bubble that burst and aggressively promoted the view that financial markets are naturally efficient and in no need of regulation.

Milton Friedman (3,349 votes): Friedman propagated the delusion, through his misunderstanding of the scientific method, that an economy can be accurately modeled using counterfactual propositions about its nature. This, together with his simplistic model of money, encouraged the development of fantasy-based theories of economics and finance that facilitated the Global Financial Collapse.

Larry Summers (3,023 votes): As US Secretary of the Treasury (formerly an economist at Harvard and the World Bank), Summers worked successfully for the repeal of the Glass-Steagall Act, which since the Great Crash of 1929 had kept deposit banking separate from casino banking. He also helped Greenspan and Wall Street torpedo efforts to regulate derivatives.

Given the above, Yes, today is a good day. Larry Summers is not to lead the Fed. However, the Big Question is: Given the American ways of rewarding the Guilty Economists, again and again, will there ever be a chance for a good economist for the common good to lead the Fed? Let us hope for a miracle!

See below the list of the 10 nominees for the Ignoble Prize for Economics (The Prize name was latter on changed to Dynamite Prize in Economics):

Dossiers of short-listed of nominees for the Ignoble Prize for Economics

Fischer Black and Myron Scholes

They jointly developed the Black-Scholes model which led to the explosive growth of financial derivatives. The importance given to their hypothetical calculation of derivative prices was baneful not just because it was bogus, but also because it meant that relevant and often urgent real-world economic research was widely neglected by the profession. Eugene Fama His “efficient market theory” provided the moral umbrella for all sorts of greed, predatory behaviour and incompetent corporate management. It also provided the rationale for deregulation. And his theory’s widespread acceptance meant that “discussion of investor irrationality, of bubbles, of destructive speculation had virtually disappeared from academic discourse.” In these three ways Fama’s work created the environment which made possible the GFC.

Milton Friedman

He propagated the delusion, through his misunderstanding of the scientific method, that an economy can be accurately modeled using counterfactual propositions about its nature. This, together with his simplistic model of money, encouraged the development of the financial theories with unrealistic assumptions that facilitated the GFC. In short, he opened the door for everyone subsequently to theorize without fear of having to be attached to reality.

Alan Greenspan

As Chairman of the Federal Reserve System from 1987 to 2006, he both led the over expansion of money and credit that created the bubble that burst and aggressively promoted the view that financial markets are naturally efficient and in no need of regulation. Before a Congressional committee on 28 October 2008 Greenspan confessed that his theoretical beliefs of 40 years were now proven to be without foundation, hence his total confusion and failure at his job.

Assar Lindbeck

By working to make the Riksbank Prize in Economic Sciences (“Nobel Prize in Economics”) almost exclusively a prize for neoclassical economists, this Swedish economist has contributed significantly to the conversion of the economics profession and of world public opinion to market fundamentalism.

Robert Lucas

His development of the rational expectations hypothesis, which defined rationality as the capacity to accurately predict the future, both served to maintain Friedman's proposition that monetary factors do not affect the real economy and, in the name of “rigor”, distanced economics even further from reality than Friedman had thought possible.

Richard Portes

As Secretary-General of the Royal Economic Society from 1992-2008, he helped suppress worries expressed by non-mainstream economists about developments in the financial sector. In 2007 he wrote a Report for the Icelandic Chamber of Commerce giving a clean bill of health to Icelandic banks only a few months before they collapsed. When investigators called attention to the real state of Icelandic banking, he wrote a series of letters to the Financial Times defending the soundness of Icelandic banks and imputing professional incompetence to those who doubted it.

Edward Prescott and Finn Kydland

For jointly developing and popularizing “Real Business Cycle” theory, which by omitting the role of credit greatly diminished the economics profession’s understanding of dynamic macroeconomic processes.

Paul Samuelson

Through his textbook Economics: An Introductory Analysis (19 English language editions and translated into 40 languages), he popularized neoclassical economics, contributing more than any other economist to its diffusion and thereby to the deregulation of financial markets which made possible the GFC.

Larry Summers

As US Secretary of the Treasury (formerly an economist at Harvard and the World Bank), he worked successfully for the repeal of the Glass-Steagall Act, which since the Great Crash of 1929 had kept deposit banking separate from casino banking. He also worked with Greenspan and Wall Street interests to torpedo efforts to regulate derivatives.

Global Financial Collapse: The Guilty Economists who destroyed the world and the Economics itself

http://www.gcgi.info/news/87--global-financial-collapse-the-guilty-economists-who-destroyed-the-world-and-the-economics-itself

Greenspan, Friedman and Summers win Dynamite Prize in Economics

http://rwer.wordpress.com/2010/02/22/greenspan-friedman-and-summers-win-dynamite-prize-in-economics/

Economists are the forgotten guilty men

Academics - and their mad theories - are to blame for the financial crisis. They too deserve to be hauled into the dock

Anatole Kaletsky

From The Times

February 5, 2009

http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article5663091.ece

Who taught them greed is good?

To what extent are business schools' MBA courses responsible for the global financial crash?

Peter Walker, The Observer, Sunday 8 March 2009

http://www.guardian.co.uk/business/2009/mar/08/credit-crunch-mbas/print

I blame the Queen for this crisis

The man hired to lead the Royal Economic Society rejected any challenge to a blind orthodoxy that helped to cause catastrophe

“I found these economists guilty of providing not only the Queen, prime ministers and chancellors, but also the citizenry – including millions of investors – with dangerously misleading guidance.”- Ann Pettifor

http://www.theguardian.com/commentisfree/2009/feb/26/recession-economy-capitalism

In Praise of the Economic Students at the Sorbonne: The Class of 2000

http://www.gcgi.info/blog/392-in-praise-of-the-economic-students-at-the-sorbonne-the-class-of-2000

The Times, 8 March 2011

Ethics boys

Sir, Around 1991 I offered the London School of Economics a grant of £1 million to set up a Chair in Business Ethics. John Ashworth, at that time the Director of the LSE, encouraged the idea but had to write to me to say, regretfully, that the faculty had rejected the offer as it saw no correlation between ethics and economics. Quite.

Lord Kalms, House of Lords

The Roots of Economics -- And Why it has Gone So Wrong

by Kamran Mofid

This article is Chapter 4 of Promoting the Common Good: Bringing Economics & Theology Together Again by Marcus Braybrooke & Kamran Mofid, a dialogue between a theologian and an economist. Published by Shepherad-Walwyn (Publishers), 2005. Used by Permission.

http://lass.purduecal.edu/cca/jgcg/downloads/PromotingTheCommonGood.pdf

Details: Written by: Kamran Mofid; Published: 11 September 2013; Hits: 3150

“Once the West set out to conquer the world. Those days have gone for ever”

An article by Andreas Whittam Smith, first published in The Independent, Tuesday 10 September 2013

Andreas Whittam Smith was a financial journalist until 1985 when he led the team that founded The Independent. The paper’s first editor (1986-1994), he has subsequently been the president of the British Board of Film Classification (1998-2002) and chairman of the Financial Ombudsman Service (1998-2003).

I began to read this aricle with great interest. The more I read it, the more I thought that I should bring it to the attention of many more readers, especially on the day like this: 11 September 2013, the 40^th Anniversary of the Chilean 9/11*.

I very much encourage you to read it. An excellent historical account and analysis of imperialism, its consequences and how the West’s farcical reaction to the Syria crisis, goes a long way to sound the defeat of immoral and inhumane imperialism. I have copied the original article below:

“Now, 600 years after the first European colony of the modern era was established by Portugal on the North African coast, an extraordinary question arises. Does the reluctance of Western electorates to support a policy of punishing Syria for alleged use of chemical weapons mark the end of what began all that time ago and has continued ever since? For the notion of the US Navy firing cruise missiles into a Middle-East nation from vessels in the Mediterranean to “teach it a lesson” is pure Western imperialism. And we don’t seem to want to do it any longer.

The story in outline is well known. Portugal and then Spain started the process. Vasco da Gama, the Portuguese explorer, reached India in 1498. And as the Portuguese pushed further east, seeking valuable spices, they established fortified trading posts along the coasts of their habitual routes. Spain focused on the Americas and the search for gold and silver, which it found in great quantity. Unlike Portugal, Spain sent out large numbers of settlers, soldiers and administrators. Notoriously, the Europeans also brought infectious diseases against which the indigenous peoples had no natural protection.

Already, at this early period, three of the enduring features of colonial expansion were present: trade, the extraction of wealth, and a condescending disregard for the local populations. And there was a fourth feature, religion. The Portuguese had vainly searched for the Christian kingdom of Prester John that was supposed to exist somewhere in the Orient. And alongside Spanish soldiers there travelled Christian missionaries. Work on the first cathedral in the Americas began in 1514. That was the first stage.

In the second stage, England, France and Holland got into the business. During the 16th and 17th centuries, they began to establish overseas trading posts outside the areas dominated by Spain. They explored what is now the US and Canada. They also seized some of the larger islands of the Caribbean such as Barbados and Martinique. Martinique, conquered in 1635, is still a French possession. The emphasis on trade remained.

But the cultivation and export of valuable crops became more important – tobacco, cotton and sugar. Tragically, the labour-intensive nature of the last named led directly to the Atlantic slave trade, with 10 to 12 million Africans transported across the ocean. Religion still played a role, but in a different guise – the desire to escape the Old Continent’s religious restrictions and set up godly communities far away from the authority of Canterbury and Rome.

Then we come to the first round of defeats. In stage three, 1770 to 1830, what had been achieved was overturned. For the European powers were all but expelled from the Americas, leaving only the Canadian provinces in British hands. The American War of Independence was won in 1783 when Britain recognised the United States of America as an independent, sovereign state. In the same 60-year period, the Spanish and the Portuguese were also driven out. Napoleon’s invasion of Spain and Portugal had sundered the ties between the two mother countries and their central and South American colonies. By 1831 they were gone.

What had begun as a spontaneous process in which traders, adventurers and fortune hunters, with priests and pastors alongside, had set sail across the seas to seek their fortunes mutated into imperialism, which is a state supported enterprise. After defeat in the Americas, the attention of European nations turned to Africa and Asia. Indeed, the apogee of empire building was reached between 1870 and the outbreak of the First World War. This is the fourth stage. Competition between the European powers generated the “scramble for Africa”. This was done partly to satisfy commercial aspirations for ready supplies of raw materials such as copper, cotton, rubber, palm oil, cocoa, diamonds, tea and tin. The acquisition of colonies also became a matter of national prestige, with Germany and Italy late entrants into the race.

Religious considerations played a part as always. Some Christian churches launched missionary projects to save the “heathen”. This was the period when notions of racial superiority flourished in Western Europe, even in so-called respectable society. In 1899, for instance, Rudyard Kipling wrote a poem entitled The White Man’s Burden: “Take up the White Man’s burden/ Send forth the best ye breed/ Go send your sons to exile/ To serve your captives’ need/ To wait in heavy harness/ On fluttered folk and wild/Your new-caught, sullen peoples/Half devil and half child”.

From 1914 onwards, however, imperialism came under increasing pressure and moved towards fresh defeats in the field. Two world wars within 35 years exhausted Britain and France. Independence movements gathered strength. And the fact that troops from the colonies fought side by side with Britain and France in war – in the cause of freedom! – served to undermine the notion of white supremacy.

To begin with, however, the imperial powers carried on as before. So while the First World War was raging, the French and the British governments arrogantly agreed how to carve up the Middle East should the Ottoman Empire collapse – as in fact it did. A year later (1917), the British Foreign Secretary of the time, Lord Balfour, told the Zionist Federation of Great Britain and Ireland that the Government viewed “with favour the establishment in Palestine of a national home for the Jewish people, and will use their best endeavors to facilitate the achievement of this object”. Then after 1918, the new League of Nations gave France control of Syria and Lebanon, while the British were granted the mandates for Iraq and Palestine. The imperial instinct, had proved to be deeply rooted and has only slowly lost its strength.

While Britain wound down its empire without serious incident after the Second World War, the French fought bitter battles in Indochina (1946 -54) and in Algeria (1954-62) to delay the process. They did not succeed. The British declined to mount rearguard actions. The European powers, having been defeated in the Americas 150 years earlier, now they found themselves driven out of Africa and Asia.

Meanwhile the two countries were completely overshadowed by the United States, which, while not an imperial power, acted as if it were in its self-appointed role as leader of the free world. So for many years, the US, the UK and France paid for the expensive navies, armies and air forces that are required if power is to be projected far from home. In other words, they maintained the equipment and trappings of imperial nations.

Except that Nemesis, or the spirit of divine retribution, was waiting to punish them for their arrogance. Afghanistan and Iraq turn out to be the final disasters. The British surrender at Yorktown in 1781, the French defeats in Indochina and Algeria, and finally the ignominious withdrawals by the US and its allies from Afghanistan and Iraq, these have done for colonialism and its more virulent form, imperialism. There can be no going back. No US president, no UK prime minister, no French president is ever again going to ask Congress, Parliament or National Assembly to approve the invasion of a another country, even by airpower alone. After 600 years, that is over. Never again.”

See the original article:

http://www.independent.co.uk/voices/comment/once-the-west-set-out-to-conquer-the-world-those-days-have-gone-for-ever-8807245.html

http://www.gcgi.info/blog/464-forty-years-on-remembering-911-1973

For a good understanding of “White Men” treatment of others, I highly recommend Rudyard Kipling’s “The White Man's Burden”, where he justifies the colonisation of other peoples by the “White Men” because these races are more primitive, they are suffering and need the white men to help their societies profit. Through this description, we can see how diabolical Kipling’s word choice is. Kipling describes the white men as being noble and generous when they are actually just seeking their own profit and/or being racist in their conquering.

“The White Man's Burden”

Take up the White Man's burden--
Send forth the best ye breed--
Go bind your sons to exile
To serve your captives' need;
To wait in heavy harness,
On fluttered folk and wild--
Your new-caught, sullen peoples,
Half-devil and half-child.

Take up the White Man's burden--
In patience to abide,
To veil the threat of terror
And check the show of pride;
By open speech and simple,
An hundred times made plain
To seek another's profit,
And work another's gain.

Take up the White Man's burden--
The savage wars of peace--
Fill full the mouth of Famine
And bid the sickness cease;
And when your goal is nearest
The end for others sought,
Watch sloth and heathen Folly
Bring all your hopes to nought.

Take up the White Man's burden--
No tawdry rule of kings,
But toil of serf and sweeper--
The tale of common things.
The ports ye shall not enter,
The roads ye shall not tread,
Go mark them with your living,
And mark them with your dead.

Take up the White Man's burden--
And reap his old reward:
The blame of those ye better,
The hate of those ye guard--
The cry of hosts ye humour
(Ah, slowly!) toward the light:--
"Why brought he us from bondage,
Our loved Egyptian night?"

Take up the White Man's burden--
Ye dare not stoop to less--
Nor call too loud on Freedom
To cloke your weariness;
By all ye cry or whisper,
By all ye leave or do,
The silent, sullen peoples
Shall weigh your gods and you.

Take up the White Man's burden--
Have done with childish days--
The lightly proferred laurel,
The easy, ungrudged praise.
Comes now, to search your manhood
Through all the thankless years
Cold, edged with dear-bought wisdom,
The judgment of your peers!

Details: Written by: Kamran Mofid; Published: 09 September 2013; Hits: 4994

Mr. President, Charity Starts at Home. Rebuild America. Don’t start another war

Dear Mr. President,

As a true friend of the US, its people and its noble tradition of democracy, and as a friend who wishes to see America become, once again, a beacon of hope, I wrote an Open Letter to you under the heading of “A Plea for Wisdom and the Common Good”. The letter was written in February 2010, at the time of your announcement concerning your plans for Afghanistan.

Once again I find myself in the same position as 2010, awaiting your decision about another Muslim and Middle Eastern country, this time Syria.

Mr. President, when you were first elected, I, along millions and millions of people around the world, were full of joy and happiness. We all thought that the world will be a much better, fairer and happier place with you at the White House. I am sure you will agree that sadly this is no longer the case.

I so desperately wish to rekindle the admiration I had for you and which I expressed in my letter of 2010 to you, namely that you are a President who cares deeply about international law, who cares deeply about multilateral action, who cares deeply about the United States being a good global citizen in the international community, and who cares deeply about the common good.

Mr. President, please allow me to recall some passages from my 2010 letter, its words and sentiments as valid today as they were in 2010:

“Dear President Obama,

In your speech to the United Nations General Assembly this Autumn, you eloquently stated one of your core beliefs, that while too often peace remains a distant dream: "We can either accept that outcome as inevitable, and tolerate constant and crippling conflict, or we can recognize that the yearning for peace is universal, and reassert our resolve to end conflicts around the world ... For the most powerful weapon in our arsenal is the hope of human beings - the belief that the future belongs to those who would build and not destroy; the confidence that conflicts can end and a new day can begin.

“We share that belief, and urge you to make it your guiding principle in Afghanistan, Iraq and everywhere else that the US is currently militarily involved. We believe that after eight years or more of war we need a whole new approach to conflict resolution and peace building. And we respectfully and prayerfully suggest to you a different strategy that promotes Wisdom and the Common Good by initiating a surge in expenditures in areas such Education, Social Services, Science, Culture and Knowledge, promoting massive humanitarian assistance and sustainable development.

“This sort of investment is not only needed in the US itself to reverse many years of neglect and decline with subsequent loss of global competitiveness, but it is desperately needed in Iraq, Afghanistan and everywhere else. By doing so, you will make the US again a beacon of hope to many, the US as the peace maker and not the US as the war monger. The world is looking to you, so that one day soon we can all say: Yes We Did, Yes We Did, and made the world a better place with you in the White House.”

This now seems history, but once again history is repeating itself.

Mr. President, entering yet another war against a Muslim nation in the Middle East is bound to create more enemies for America. The surest way to encourage future terrorists is to join other nations' conflicts and kill other nations' peoples. The US is still fighting a traditional war in Afghanistan and "drone wars" in Pakistan and Yemen. The U.S. should avoid adding another conflict to the mix. A war of dropping bombs from thousands of feet above with “No Boots on the Ground”, does not project your country as noble or brave. I fear for America. I fear for the world.

Now Mr. President, I am sure you will agree with me that indeed charity starts at home. Last night I watched a BBC documentry “Requiem for Detroit?”. Mr. President, nobody with an eye on justice, humanity and the common good, can watch this documentary without shedding tears for the plight of so many millions in the US. Shattered lives and dreams of so many Americans in Detroit and indeed many other “Detroits” across America is nothing short of tragic and catastrophic. Nobody with a shred of conscience can remain silent.

Mr. President, Watching this documentary has made it crystal clear to me that after so many wars of destruction, death and inhumanity in the Middle East and North Africa, that have not made the US and the world more secure and at peace, it would be futile to waste again the American tax-payers money on the “limited” aerial bombing of Syria. What can this do that your other bombing missions have not?

Mr. President, at this important historical moment, the children in the US, their parents and grand parents need your help more than those in all other countries where the US is at war currently. As I said in my 2010 letter and still hold to today, if you want to tackle a crisis, why not the unemployment crises in the US and globally? Why not look nearer home and tackle healthcare, education, housing, crumpling infrastructure? Let’s become engines of hope and construction. Let’s buils a world fit for the common good.

Mr. President Syria is a tragedy. But it is not America's tragedy. It’s a tragedy for the Syrian people. Your desire to bomb them from above would not mittigate their paiful suffering. Have the bomings in Iraq and Afghanistan mittigated their suffering and pain? Have your drone strikes in countries such as Pakistan, Yemen and elsewhere eased their suffering and pain?

As a just man, I am sure you will agree with me that the answer is a profound NO. Thus, why the rush to do the same in Syria? And if you bomb Syria, will this be your last bombing, or do you have further plans? Iran, perhaps? And then what?

Mr. President, the use of chemical weapons in Syria, whoever it was, is a crime against humanity and international law. The perpetrators must be identified and tried at international courts, assigned to deal with these issues. Unilateral, limited military action and aerial bombardment are not the solution.

So, what is to be done? May I humbly offer a suggestion?

I am a member of the International Coordinating Committee (ICC) of the World Public Forum Dialogue of Civilisations (WPFDC). On 6 September 2013, at our gathering in Vienna, we issued the following resolution concerning the Syrian crisis, which I would like to share with you:

“At its meeting in Vienna on 6 September, 2013, the members of the International Coordinating Committee of the World Public Forum “Dialogue of Civilizations" adopted the following resolution:

“The entire World is deeply concerned about the recent developments in the Syrian crisis. We – members of the global family of WPF “Dialogue of Civilizations” – condemn very firmly the use of chemical weapons by any party involved in this conflict. Their use is prohibited under international law and international conventions adopted following the horrors of the First World War.

“At the same time we oppose equally firmly any unilateral military intervention in Syria in violation of international law and the UN charter.

“The first and most noble task of the international community is to help end the suffering of the Syrian population through diplomatic efforts and political dialogue. To this end we propose an international peace conference on Syria to be convened at the earliest possible time. Such a conference must involve all regional states and actors as well as the members of the UN Security Council. To avoid any further deterioration and to mitigate human suffering, a total arms embargo should be imposed immediately on all sides in the Syrian conflict.

International Coordinating Committee of the WPF “Dialogue of Civilizations”,
Vienna, 6 September, 2013”

Mr. President, there you have it. I hope and pray that in the interest of your own legacy, the real needs of the citizens of your own country, and the long-term interest of the US globally, you will act with consideration for the common good.

Prof. Kamran Mofid

Founder, Globalisation for the Common Good Initiative (GCGI)

Please see:

A Plea for Wisdom and the Common Good

http://www.gcgi.info/news/88-a-plea-for-wisdom-and-the-common-good

Requiem for Detroit: BBC iplayer-

http://www.bbc.co.uk/iplayer/episode/b00rkm3y/Requiem_for_Detroit/

(Available until 1:14AM Wed, 18 Sep 2013)

To see this video outside of the UK:

http://documentaryheaven.com/requiem-for-detroit

Are you interested to learn how to make a documentary? How to tell your story?

Then, see the excellent article by Jean Miller below:

How to Make a Documentary: A Detailed Guide for Visual Creatives and Storytellers

Page 304 of 394

Today’s Good News: Larry Summers withdraws name for Fed chair job