Economists Gone Wild - Shamans and Quacks not Data Proven Scientists

By pjain      Published Aug. 29, 2020, 1:46 a.m. in blog Geo-Politics   

Economists Gone Wild - Problems in Free Market Academics a Failure

Problem: Governments got Emasculated

Friedman says that only ethical companies should be allowed to do business - that is the role of proper government.

But that is easier said than done.

US Economic Theory Failures and Solutions

CEO Excess Pay

Company Buybacks - Lack of Investment in Business

No dividends! All Earnings siphoned away!

Lobbyists influence and blind Government.


The lifespan was cut dramatically under secret promotion of opiods under lobbyists that allowed mass marketing starting under GWBush and continued under Obama for 16 years!

  1. GFC deregulation from "free market" and no consequences. The very reason that Milton promotes his - ends up deregulation as Rubin, Summers et al did in last days of Clinton's regime - ending up i n maximal 2008 Financial Crash! But NO ONE got prosecuted or went to jail, except poor Madoff who took too much money from influential rich Jews!

Global Intervention, Regime Change and Destroying Nations in name of Globalism

60,000 killed by Operation Condor financed by USA under Johnson, Nixon, Ford, Carter, Reagan

The United States government provided planning, coordinating, training on torture,[16] technical support and supplied military aid to the Juntas during the Johnson, Nixon, Ford, Carter, and the Reagan administrations.[2] Such support was frequently routed through the CIA.

A United States-backed campaign of political repression and state terror involving intelligence operations and assassination of opponents, officially and formally implemented in November 1975 by the right-wing dictatorships of the Southern Cone of South America.

FAIL: Chile Miracle backfired - Free Market Economies used to Justify Regime Change

Allende Policies and Report Card

In 1971, the first year of Popular Unity Government - GNP increased 9%, Industrial Production rose 11%, Agriculture +6%, Unemployment fell from 8% to 4% Inflation in prior regime fell rapidly from 35% to 22%.

In 1972 price of copper, which represented almost 80 percent of Chile’s export earnings, fell to its lowest level in thirty years

Inspite of several problems (see below) the Chilean economy continued to improve throughout 1972 under Allende.

Overall between 1970 and 1973, the working classes had access to food and clothing, to health care, housing and education to an extent unknown before. These achievements were never threatened or diminished, even during the most difficult and dramatic moments of the government’s last year in power. The priorities which the Popular Unity had established in its program of social transformations were largely reached.

Right Wing Violence supported by USA Regime Change

  • 1972, Backlash foreign intervention esp. from USA under "free market" Friedmanisms. Vital lines of credit and financing coming from multinational lending institutions and from the private banks and the government of the United States were severed (the exception being aid to the military).

  • 1972 the Chilean Congress, controlled by the opposi­tion, approved measures which escalated government expenditure without revenue or tax raising - this directly boosted inflation.

  • 1972 Right wing Capitalists (supported by usual suspects of US/CIA, etc) started to foment violence to overthrow Allenda report card This included the illegal hoarding of goods by the rich; creation of a vast black market; blowing up industrial plants, electrical installations and pipe lines; paralysis of the transportation system and, in general, attempts to disrupt the entire economy in such a way as to create the conditions needed to justify the military coup.

  • We can't listen to workers! The growing participation of the workers and peasants in the decision-making process, which accompanied the economic progress of the preceding two years, began to threaten seriously the privileges of traditional ruling groups and pro­voked in them more violent resistance.

  • By 1973, Chile was experiencing the full effects of the most destructive and sophisticated conspiracy in Latin American history. Reactionary forces, supported feverishly by their friends abroad, developed a broad and systematic campaign of sabotage and terror, which was intensified when the government gained in the March Congressional elections.


==== Keynesian economics - print baby print

Keynesian economics are various macroeconomic theories about how, in the short run – and especially during recessions – economic output is strongly influenced by aggregate demand. In the Keynesian view, aggregate demand does not necessarily equal the productive capacity of the economy; instead, it is influenced by a host of factors and sometimes behaves erratically, affecting production, employment, and inflation.

Milton Friedman and Chicago school of economics

Thesis 1 : Stockholders are the only stakeholder that matter

Friedman said the role of companies is to engage in activities designed to increase profits.

Companies need a path to profitability or they have no reason, or ability, to exist. Serving shareholders is shorthand for saying companies should avoid emotional or nostalgic decisions. In other words, sometimes a 100-year-old widget company needs to stop making widgets, or sell to a competitor, even if it hurts.

Thesis 2: Labor Unions, Role of Workers is to PRODUCE and SHUT UP!

As shown in Chile, Allende got the growing participation of the workers and peasants in the nation's decision-making process, which accompanied the economic progress from 1971 to 1972. But this began to threaten seriously the privileges of traditional ruling groups, Capitalists and "representatives" and puppets of Western interests. This caused the Right Wing financed by US to more and more violent resistance.

Thesis 3: Indirect Social Good - akin to Trickle down

Companies CAN also contribute social good. The private sector creates jobs, delivers paychecks and generates wealth for the many Americans who own stocks and mutual funds, either directly or via their pension or retirement accounts. That goal incentivizes CEOs to invest in employees and communities, and take other actions that INDIRECTLY could be hopefully socially responsible. Yet those actions also support the companies’ profitability because they help retain employees, attract customers and develop markets.

Friedman’s larger point was that the private sector has a different function than government has. Companies exist to maximize profits. Whatever good they contribute emanates from that mission.

Thesis 2 : Market Economies should be free

Built Influence as Chicago school of economics

As professor in University of Chicago economist - part of neo-economic Chicago school of economics Several students and young professors who were recruited or mentored by Friedman at Chicago went on to become leading economists, including Gary Becker, Robert Fogel, Thomas Sowell and Robert Lucas Jr.

Got the Nobel Prize for Promoting the Line

  • 1976 Nobel Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the complexity of stabilization policy.


Paul Samuelson and MIT school of Economics

Corrupt Economists Facilitated Corporate Cronies in US Government

Establishment Democrats SOP of Big payments from large Corporations

Like Larry Summers, Clintons and Obamas later on, Geithner their habit of floating in and out of government while taking in six-figure payments from large corporations gives them a powerful incentive to continue to line up their beliefs with those of their benefactors.

  1. Tim Geithner after leaving his Treasury Secretary post in January 2013. Geithner, too, has used his time out of government to enrich himself from corporate largesse. He got $200,000 to speak at a Deutsche Bank conference, and $100,000 from investment banking firm Blackstone and private equity firm Warburg Pincus. Wall Street firms specifically Blackstone and Deutsche Bank have both been in the news for their efforts to “create and sell the first bond backed by home-rental payments,” which the Wall Street Journal warns would be “more risky than well-known securities” but would satisfy “investors…hungry for the high returns.”

  2. Summers followed the common revolving doors practice of giving private paid speeches to big corporations which helped build his $40m+ fortune after Clinton. After years in the Clinton administration, and before joining the Obama administration, he received hundreds of thousands of dollars in speaking fees from financial institutions.

Obama let Strongly bailed out bad actors on Wall Street - Moral Hazard

Later on Larry Summers rewarded his Wall Street benefactors in the Obama White House helping proactively bail out. Summers also strongly shielded them from more intense regulation.

Deregulation pushed in Clinton waning years - triggered 2008 Depression

  1. The Fed under Greenspan lowered interest rates to unprecedented low levels after 2000. This knee-jerk monetary policy was pursued to excessive levels from 5-6% interest levels down to unprecedented low levels.

  2. Clinton, Rubin and Summers Supported repeal of Glass-Steagall, opening up Pandora's Box of bank greed

    Specifically the Graham-Leach-Bliley (GLB) Act repealed four sections of Glass Steagall, but the law still is in effect.

  3. No-Doc "anti-redline" Good intentions vs bad administration - but Government Guarantees. Clinton administration had already passed legislation that amended the CRA putting in place the requirement that banks make no-doc sub-prime mortgage loans to low-income borrowers;

  4. Too Big to fail, moral hazard. Wall Street IBs after Glass-Steagal pursued profits AGGRESSIVELY. Bears and Lehman may not have increased their exposure to sub-prime loans - if they were prevented from mixing banking, CDOs and speculations.

  5. Fannie and Freddie became major players in the sub-prime mortgage market - reassuring CDOs and government

  6. The large NY money center or deposit banks charged to make money by breakdown of walls - by jumping hungrily into the MBS market secured by sub-prime loans,

Rob Rubin 1998+

Rubin opposed regulation of derivatives and championed the repeal of the Glass-Steagall Act, which helped fuel Wall Street abuses that led to the Great Recession.

2002 Andrew Cuomo, head of HUD, pushed Fannie/Freddie to guarantee even sub-prime

In 1993, Cuomo joined the Clinton Administration as Assistant Secretary for Community Planning and Development in the United States Department of Housing and Urban Development. From 1997 to 2001, he served as the U.S. Secretary of Housing and Urban Development.

Thanks to arm-twisting by Andrew Cuomo who pushed Fannie/Freddie to guarantee even sub-prime loans to help his "client" NY deposit banks. In this manner one of the real fathers of the housing crisis could perhaps been Andrew Cuomo.

Thanks to his support of NY Banks, Cuomo has won the hearts of big money sponsors. In 2006, Cuomo was elected Attorney General of New York. Cuomo won the 2010 New York gubernatorial election to become Governor of New York and has been reelected twice.

Later part of the massive botched response to Covid-19 in NY along with the Mayor of NY Bill Blasio who was even worse ending up killing tens of thousands especially those on.

2008 Obama Blunders - too close to Wall Street Patrons

Larry Summers tools of Wall Street

Very Pro Wall Street Interests

  • Supported repeal of Glass-Steagall, opening up Pandora's Box of bank greed
  • supported further deregulation of the financial industry, especially the arcane derivatives that almost imploded our economy

Personality Issues

  • has publicly exhibited an inappropriate attitude towards women (and vacated his position as a result)
  • is currently involved with a lending company whose policies are consistent with the policies that contributed to the 2008 economic disaster
  • Arrogance and hubris is not something that is good for top of financial ladder - indicate that he is a ticking time bomb if he becomes a Fed chairman.

Ben Bernanke

He basically piggy-backed Wall Streets profits on the backs of senior citizens and other savers, claiming there is no inflation, when everywhere a normal consumer looks, prices have risen in double digit percentages over the last 5 years.

Hank Paulson, Treasury 2008 helped his friends at Goldman Sachs

Paulson while at Goldman, oversaw the bank's outsized venture into the types of asset-backed securities that caused so many banks to collapse in 2008. Then, at the Treasury, he crafted a bailout solution that led to his old friends at Goldman receiving over $12 billion from a government rescue of AIG that Goldman otherwise like would never have recouped.

Timothy Geithner

Janet Yellen was a better choice - beat Summers to Fed Chairman under Obama


  • The documentary "Inside Job" itemized but was not successful in derailing the careers of some these shooters.


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