Daily Archives: October 13, 2014

Hold Your Wallet When the Swedish Central Bank Prize Rewards “Clever”

By William K. Black

The Swedish Central Bank’s (the “Bank”) prize in economics has gone to Jean Tirole.  It is always good to test such an award by looking at the writings of the recipient in an area in which the reader has particular expertise.  In my case, that would include the Savings and Loan debacle, financial regulation, and control fraud.  Tirole’s book: The Theory of Corporate Finance was published on January 1, 2006 during the heart of the three raging epidemics of accounting control fraud that were hyper-inflating the world’s largest financial bubble and about to create the financial crisis and the Great Recession.

As I have long emphasized and will be explaining at greater length in a book about the failures of economics and economists as exemplified by far too many of the recipients of the Bank’s Prize, economics is the only discipline in which the understanding of the field’s subject of study has gone backwards.  In particular, the praxis recommended by economists has proven highly criminogenic and is the primary explanation for why we suffer recurrent, intensifying crises, the rise of crony capitalism that cripples democracy and ethics, and spiraling inequality and low growth in the regions that suffer the greatest predation by our parasitical financial centers.  Tirole wrote at the ideal time to judge his understanding of corporate finance as it was actively causing these catastrophes.

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What are the Motive Forces for Effective Climate Action?

By Michael Hoexter

If you might want or need something to happen very badly or urgently that was debatably in your power to influence or effect, the chief rational approach you might choose would be to attempt to understand what are the causal forces or conditions that lead that thing to happen.  The alternatives are forms of magical thinking or prayer to assumed-to-be more powerful, perhaps supernatural, beings.   As the domain of effective and timely action on climate is largely within the domain of human beings’ ability to choose and influence others’ choices and such action is considered by increasing numbers of people to be highly desirable, one would think that substantial groups of social scientists would be making their best efforts to figure out how to “make climate action happen”.   Even if you were not an intense partisan of a particular outcome, as the scenario above suggests, if you were just a scientist or seeker of knowledge of some type, you would also want to understand motive forces, so as to predict future outcomes and make your scientific knowledge of some use to human beings.  This is the study of dynamics, how things change over time.

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