The Myopic Worlds of Faith-Based Economics

[Joanne98]

Jason Rines posted William Black’s (best known as author of The Best Way To Rob A Bank Is To Own One), “Theoclassical Law and Economics Makes the Law an Ass”, an attack against “faith-based versions of economics” which Black wrote in response to an Yves Smith (Naked Capitalism) blog discussing “The Continued Stealth Takeover of the Courts”. Yves observes that today’s CEOs have revived the robber baron practice of buying judges to declare their illegal activities ‘legal’.

Black raises the issue of “ignorance”, how a field of inquiry such as the appropriate role of law and regulation in economic policy (Black’s field of “Law and Economics”) can be and is being hijacked by interest groups who teach their limited, self-interested perspective as “the facts”. Then, proving the adage that a little knowledge is a dangerous thing, newly minted acolytes tally forth brimful of faith in their newly acquired ‘economic truths’. A truly “scientific” economics would test its theories against actual outcomes in real world economies to see if theory matches reality, which is science’s way of proving or disproving theories, but faith-based belief sees only whatever scraps of evidence support its preordained ‘truths’. There is none so blind as he who will not see, which makes true believers impervious to evidence, but broad, objective education can cure innocent ignorance and the credulity it creates.

Unfortunately very few people seem to have been exposed to anything like 'comparative economic theory', so when they are taught or indoctrinated with Austrianism or Friedmanism or Keynesianism or even classical theory they think they are learning "economics". In fact they are learning one of many competing versions of economic theory, each of which serves a specific interest group within an economic system. But because students are not aware of the other schools of thought they believe they are learning "the truth", especially when the biased version they are exposed to is taught as "scientific fact".

That is how you create true believers in faith-based economic theory, like Ronald Reagan's supply side economics and its infamous "trickle down" effect, now called voodoo economics (partly because the only thing that trickled down to the masses was massive debts and loss of their former good jobs), that began America's long devolution from a relatively economically egalitarian society to one of extreme wealth at the top and a disappearing middle class; from the world's largest creditor nation to the world's largest debtor nation.

http://ragingdebate.com/economy/the-myopic-worlds-of-faith-based-economics

[fasttense]

1. Economics is both a political and financial system.

Because a government must impose some kind of structure on greed and self-interest.

Simply passing a law that prevents people from stealing their neighbor's property is establishing an economic system. Setting up courts to determine who stole and who owns is regulating that financial system. Now if those courts only allow for the rights of those born to wealth, then you have a political system.

So, there can never be anything resembling a supposed "free" market because from the start there are regulation against theft. Without them we would not have a society, but then we don't have free markets either.

[Hawkowl]

2. The administration is practicing Economic creationism

The constant deference to Wall Street and private financial institutions, coupled with this insane belief that if only people and businesses were more confident, then the economy would pick up, is horrifying. I hear from Democrats I like and respect spew such nonsense.

You can't be confident without a job, without healthcare, without food, without a FUTURE. Provide these things first and then you get an economy.