Inside Job

I just watched the movie, Inside Job, which is a documentary about the banking crisis of 2008, and how it happened. In some ways it was not as good as the PBS documentary episode of Frontline, which covered the same topic, and in other ways it was better. But one thing mentioned in the film stands out with me, and keeps nagging at my mind over and over. The film claimed that anti-regulation ideology has become so entrenched within the financial world that it has (and forgive me if I'm paraphrasing, but I'm pretty sure this is an exact quote), "corrupted the halls of academia." In other words, students majoring in business are imbued with anti-regulation idealism rather than economic reality.

From personal experience, I can see where someone on the left might see it this way. Often, you can tell what a student's major is simply by observing the student's extra-curricular activities. If the student is a member of the Young Republicans, it's a good bet that his major is in either finance, accounting, economics or something else business related. If the student is a member of the SDS (Students for Democratic Society), that student is probably a humanities major of some kind. (Natural science majors don't often seem to bother much with politics at all.) So a perspective that sees liberalism as superior to conservatism might well regard this as right-wing corruption within the financial world permeating into our very colleges and universities.

Oh, I can hear the right-wing pundits now! "How dare these liberals think that unless their ideology completely dominates every square inch of college campuses that it somehow amounts to 'corruption!' Are they really so blind as to think that only their views can be taught to students? Are they really so frightened of what free market capitalism has to say?"

Well, speaking from the center-left, no, we're not afraid of what free market capitalism has to say. Even if it is based upon the outdated and unreadable novels of Ayn Rand, and the wild-eyed idealism of Milton Friedman. But we are afraid of only one side getting taught, regardless of the context. It's not right that business majors get taught only one view, while liberal arts gets taught another view, and natural science gets taught yet another view. Bullshit, I say. A more broad-based educational environment is needed. And liberal views ought not be shunned in Lubar Hall at UWM any more than conservative views should be shunned in Curtin Hall.

But that's not the real point of this blog. The real point is this: Why is it that there are still two competing economic views that make this campus-division even possible? Why are followers of Keynes still at war with the disciples of Hayek? Why are Democrats championing one view, and Republicans another? Why, in a world where penalizing economic success is every bit as false a doctrine as a flat tax and unbridled deregulation of corporate and banking institutions, do we not have a unified synthesis of economic theory?

It certainly can't be for lack of information. Hell, this is the information age! It can only be because those in both academic and political power don't want to find the truth!

This should not be surprising. In today's world, people have denied one fact after another, based solely on the propaganda of corporate-funded academics. We've heard their bullshit before:

Cigarettes might not give you cancer.

Burning coal doesn't produce acid rain.

Chlorofluorocarbons aren't eroding the ozone hole.

Deforestation isn't killing the spotted owl.

DDT should have been freely distributed to central Africa.

Humans aren't the cause of global warming.

And besides this, significant percentages of the public think that the Moon landings were faked, that aliens traveled billions of light years just to fuck with us using crop-circles, and that John Edwards can really talk to the dead. No wonder they think we're suckers!

And no wonder politics keep Keynes and FDR's politics separate from Hayek, Von Mises, and the Chicago school of economics. It's just too easy to muddy the water!

Here's my promise to you, my readers. I'm going to spend quite a lot of time researching the differences between these two schools of thought, and find out which parts of the ideas work, and which don't. I expect to find much merit in both camps, and also expect that there might be better ideas not thought of by either. It will take me awhile. Hell, it might even result in me writing yet another book. (Which gets passed over yet again for publication in favor of such nonsense as, "They Call Me Baba Booey.") But at the very least, I will blog my findings with you all, and give you a nice, little crash-course in economic wisdom.

Wish me luck!

Eric