Bill, an excellent point. One of the great academic travesties of the past 30 years has been the total evisceration of qualitative economists from university economics departments. It's almost impossible to find a qualitative economist under the age of 50 on a college campus, let alone one seeking tenure. When I mentioned Hyman Minsky to an economics professor that I had for a class, he simply smiled, looked at me with a bit of disbelief, and told me that I probably wouldn't get very far following in the footsteps of Minsky. But, I asked.... what if Minsky was right?
I tried to have a conversation about the economy, about the investment bust in progress, with a recent Ph.D econ grad at work. I got a blank stare when I mentioned the moral hazard engendered by Greenspan's relentless effort to stave off deflation from 1997 forward. I wondered, what are they teaching you guys??
No wonder Doug Noland is getting his Ph.D. at University of Melbourne, or something.
Without the ability to form conceptual frameworks, and look beyond the data to call a cyclical turning point, one will be stuck with predicting yesterday's recessions and yesterday's recovery's at best.
We have forgotten to consider even the basics of business cycle theory. But don't worry, this will change. Econometrics will also be deflated by the bear market. At the bottom, every economist will be a business cycle analyst, and it will be a reputable field of study once again. Academia has its fashions also. In economics, they are driven by the business cycle. During the 70s stagflation, for example, everyone wanted to be a resource economist.
I think that the "behavioral finance" theories of Robert Shiller, Andrew Lo, etc. are a promising replacement for the current academic econ regime. |
