Meet a wing-nut Nobel Prize Winner

[cthulu2016]

I have long maintained that the entire right-wing economic approach of 1980 to today (generally accepted by the establishment of both parties) has been about restraining inflation, and that policies that do that happen to restrain prospects of betterment for the 99% and in its net-result benefits only the the 1%. Very high inflation in the late 1970s provided the political opportunity for supply-side economics to take root.

If this is boring, please at least skip to the end to read this guy's comments on Obama and Krugman that were made in March, 2009—only weeks after Obama became president.

Okay, let's meet Nobel Prize Laureate Edward C. Prescott, the man who "hammered the final couple of nails in the coffin of Keynesian macroeconomic theory." (What is it about the name Prescott?)

Edward C. Prescott and Finn E. Kydland won the 2004 Nobel Prize in Economic Sciences for two important papers they coauthored that advanced the field of dynamic macroeconomics. As the Royal Swedish Academy of Sciences put it, Prescott and Kydland's work "has not only transformed economic research, but has also profoundly influenced the practice of economic policy in general, and monetary policy in particular."

More to the point, the two papers cited by the Swedish Academy hammered the final couple of nails in the coffin of Keynesian macroeconomic theory by changing the way economists think about the design of economic policy and the causes of business cycles. The first of the two papers singled out by the Swedish Academy, called "Rules Rather Than Discretion: The Inconsistency of Optimal Plans," was published in 1977 in The Journal of Political Economy. The second paper, "Time to Build and Aggregate Fluctuations," appeared in Econometrica in 1982.

...

In the wake of this (1977) research, many central banks around the world have committed themselves to a long-range policy - implicit or explicit - of seeking low inflation. The United States, for instance, has an implicit policy of pursuing low inflation. Since the early 1990s, a number of countries, including New Zealand, Sweden and the United Kingdom, have instituted a policy of inflation targeting - a specific range for inflation that the central bank commits to pursuing. Many of these changes by central banks around the world are the direct or indirect result of Prescott's and Kydland's work in this area

http://knowledge.wharton.upenn.edu/article.cfm?articleid=1082

Okay, big hero. Proved Keynes was an idiot. Blah, blah, blah. Changed how we think about macroeconomics (and wages for working people have been flat ever since)

Would it surprise anyone to know the guy is a wing-nut dumb-ass? That he said that Obama was seeking to depress the economy, that no real economist respects Krugman (who had, at the time, just won the same Nobel prize Prescott won) and the the solution to the economic crisis is tax cuts and eliminating wasteful regulation?

BusinessWeek
March 8, 2009

...But that view is hardly unanimous. In late January The New York Times (NYT) published a full-page ad signed by about 250 economists, including Nobel laureates and other luminaries, slamming the Obama plan and saying, "Notwithstanding reports that all economists are now Keynesians… we the undersigned do not believe that more government spending is a way to improve economic performance."

These days some of the anti-Keynesians barely recognize the Keynesians' existence. In an interview on Mar. 6, one of the signers of the New York Times' open letter, Nobel laureate Edward Prescott of Arizona State University's W.P. Carey School of Business, argued that "no respectable macroeconomist" believes stimulus works. Prescott said 2008 Nobelist Paul Krugman, the Princeton University professor and Times columnist who advocates stimulus, "doesn't command respect in the profession." Prescott argues that what the economy really needs is tax cuts and a commitment to increase productivity, in part by eliminating wasteful regulation. Of Obama, he says: "His policies are designed to depress the economy and are depressing the economy." ...

http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db2009038_985205.htm

[Manifestor_of_Light]

1. Don't you know? Nobel Prizes come in Crackerjack Boxes.

Because Jimmy Carter, Bill Clinton, and Barack Obama all won one.

And Paul Krugman won one too. I actually saw an argument saying that a Nobel Prize in Economics was no big deal because it was "added after the original Nobel Prizes; it wasn't in Alfred Nobel's will."

Whoop-de-doo.

[FarCenter]

5. The real Nobel prizes are the ones in Chemistry, Medicine or Physiology, and Physics

The "Nobel prize" in Economics is actually awarded by the Swedish central bank, and it is was not founded by Nobel.

[Manifestor_of_Light]

2. Oh and another reason not to respect Paul Krugman:

Randi Rhodes has a massive crush on him. She really does.

[Warpy]

3. Most of the Great Experts who make their bones "disproving" Keynes

are wingnut idiots. They'd have to be, because Keynes's model is the only one that has ever worked in the real world.

[leveymg]

4. I knew this had to be about an economist. There might as well be a Nobel Prize for prostitution.

No field in the social sciences is more distorted by wingnuttery or more "expert for hire" to highest cash bidders than Economics. Hard to even call a lot of the dismal science real science. That is particularly true of the Chicago School and "Perfect Market" true believers (fortunately, that allows for honest analysis by Stiglitz, Krugman and some other critical economists).