Though I remain annoyed with Mr. Krugman over his ridiculous piece on Goldman Sachs, (click here for my rant) here is his latest deep dive in to the problems with the economists. It is a great read as it summarizes much economic theory that drives policy decisions and offers insight about why the powers that be failed to anticipate and react appropriately to the financial crisis. ( see piece from yesterday). His conclusions are….
“So here’s what I think economists have to do. First, they have to face up to the inconvenient reality that financial markets fall far short of perfection, that they are subject to extraordinary delusions and the madness of crowds. ( great book by the way – JZ) Second, they have to admit — and this will be very hard for the people who giggled and whispered over Keynes — that Keynesian economics remains the best framework we have for making sense of recessions and depressions. Third, they’ll have to do their best to incorporate the realities of finance into macroeconomics.”
Here is what else they have to do – Listen to women – and in particular Anna Schwartz. If I had to pick 5 people to have dinner with, she would be on it! Google her. Read about her and her work. One of her latest opeds in the WSJ. She should have been on Hank Paulson’s call list….
Next – Unemployment rate jumps to 9.7%, job losses only 216,000 – and yet the press is saying “signs emerged that the recession is ending.” Last time I checked job losses are a bad sign. Read more from BLOOMBERG here which also has a quote from one of my favorite economists – David Rosenberg who was one of the few that called the financial crisis. When David says we are recovering, I will listen.
Last – TONIGHT on CBS Evening News with Katie Couric, there will be a segment on the “Women in Fund Management Paper” which will consider the question “If there were more women on Wall Street and in Finance in general – would we be in this mess?” I am honored to be featured in this piece though I have to say… I am a little nervous as of course I have not seen it! Working with the crew was a complete honor and I want to thank all of them, and especially Kelly Wallace, for being so fabulous! Thanks for bringing this issue – the lack of women in finance and what we can do about it – to broad attention. Click here to access the research from the National Council for Research on Women. There will be a link to the segment available after it airs.