Worst Sentence I Read Today

Steven Horwitz

So my reading group students requested to read this semester a book we could learn from by criticizing it.  I suggested Richard Posner's The Failure of Capitalism.  I had read it already and thought it pretty weak, and in re-reading it now, I think I underestimated how bad it is.  Today's reading included the following sentence, which is so bad in so many ways that I was at a loss for a marginal comment  Posner is arguing that the knowledge that we were in a bubble that was about to burst existed but that there was a failure to make use of it.  He writes:

"There was no financial counterpart to the CIA to aggregate and analyze the information - to assemble an intelligble mosaic from the scattered pieces."

This is so bad in so many ways that I don't know where to start.  One of my students had the best line:  "That would be the same CIA who did such a good job assembling the scattered data and correctly anticipated 9/11, right?"

Feel free to join the fun in the comments.  And if someone can explain to me how a man who knows as much good micro as Posner could so easily believe so much bad Keynesian macro, I'd love to hear it.

 

Comments

[Daniel Kuehn]

Sorry Steve, but that's bad micro, not Keynesian macro!

What could that setnence possibly have to do with Keynesian macro? It's a misunderstanding of the microeconomics of the price mechanism.

I was surprised how quickly Posner churned this out - the same with Skidelsky's return of the master. I think they were both just taking advantage of the moment. I thought Skidelsky's book was a very rough read too, and that man has a sense of what he thinks on the crisis - there was no disordered conversion moment for him.

I've always thought there was a nice parallel between Keynesian thought and American pragmatism, so I'm looking forward to more from Posner on this further down the line. I think this one was just written too quickly, and intended for a more general audience.

[Jerry O'Driscoll]

My theory on Posner is that he has been surrounded at Chicago by Ratex, Efficient Market and RBC colleagues. Then the crisis hit, and realized the emperor had no clothes. Keynesian economics was the only alterative he knew, and he grasped it.

[Steve Horwitz]

Sorry Daniel - my crack about Keynesian macro referred to other parts of the book not that sentence. Sorry that wasn't clear. You are correct about that sentence.

[Daniel Kuehn]

Speaking of good micro... you should post those two videos you did on resources and income inequality here.

I was shocked by the contrast between your videos and the Anthony Davies video. You took the opportunity to highlight why the simple data, at first glance, can be misleading. You clearly explain things about income inequality statistics that most economists are well aware of, but that a lot of reporters and the public miss. Davies struck me as doing exactly the opposite with his stimulus video. There are lots of reasons why economists don't just plot government spending against output (the way he did) because of concerns about endogeneity, intervening variables, composition of GDP and composition of government spending, etc. All those data wrinkles that you spent time ironing out for people, Davies failed to even mention.

The production quality was a lot better too, but I'm guessing that had more to do with whoever put them together.

[Roger Koppl]

Posner's change of heart is certainly disappointing, but we should admire his ability to change his mind.

[Jule Herbert]

I was in law school -- 1974 -- when his Economics and the Law came out. I still have my copy and, just as I recall, my notes were almost in every case critical --- negative. Neoclassical mainstream, "economic man", mechanical, awful stuff.

[Jeffrey Friedman]

Shamelessly promoting the journal I edit, Critical Review, Wladimir Kraus has a "critical review" of Posner's books on the crisis in the next issue, which is on the topic of Capitalism and Economics.

Wlad argues that the crisis, being a banking crisis, can be explained by the laws governing bank capital composition (the Basel rules and the Recourse Rule), which penalized banks that made business loans instead of mortgage loans, and further penalized banks that held onto mortgage loans instead of turning them into AAA-rated mortgage backed securities.

Therefore the macroeconomic issues Posner discusses under the Keynesian rubric do not even need to be discussed.

[Greg Ransom]

My guess -- Posner doesn't write these books.

In any case, Posner is over rated.

Also this.

Every time I read Posner gassing on Hayek, it increases my judgmemt that Posner is bluffing, and he's never read a word of Hayek.

[Sheri]

It's a very tricky argument because it implicitly assumes that the tacit and idiosyncratic knowledge of billions of individuals, which is expressed on the market, and by the market, caused the calamity, and that we require a cabal of "experts" to remedy the mistakes caused by the “ill-informed” masses. Of course, the truth is that it's the other way around. The so-called experts caused this crisis, by continuously and arbitrarily manipulating the very mechanism which prevents such a catastrophe, and now the market (society) must correct their mistakes.

Unfortunately, the more the planners fail, the more the planners plan.

[Steve Horwitz]

Greg,

Do you not realize how silly you sound or do you just not care about how silly you sound when you say things like you think Posner never read a word of Hayek?

[Russell Nelson]

Dear Mr. Posner, let me introduce you to the price system. It is a financial system which aggregates and analyzes information - which assembles an intelligible mosaic from the scattered prices."

[Russell Nelson]

Roger, changing your mind from an idea which is correct to an idea which is wrong is not an admirable trait.

[john]

yet he thinks he has gone from wrong to right, or even less correct to more correct. Bryan Caplan also has my respect for changing his views for the very reason that it's hard to do.

[Troy Camplin]

Since Keynesian macro doesn't seem to have any connection whatsoever to microeconomics, one can believe anything at all one wants to about microeconomics and still be a Keynesian macroeconomist.

I'm reading Keynes's General Theory and commenting on it chapter by chapter on my blog, and I am astonished that anyone who has ever learned anything about economics can believe much he wrote in that book (so far, since I'm only on chapter 6 -- though I have no particular objections to chapter 5). I do understand how those who have not received an education in economics believes it, though. And I especially understand why politicians would love it. But an economist? I don't get it -- it's so obviously wrong on so many things.

[Daniel Kuehn]

They must all be idiots, Troy. That's gotta be it.

[Mathieu Bédard]

Troy,

I'm not sure the GTEIM is best place to look if you want to understand today's Keynesian macroeconomics..

[Roger Koppl]

Sheri's good comment goes to the quote that got Steve going in the first place. There are these two reactions to complexity: 1) laissez faire and 2) control by experts. The crisis shocked Posner, Greenspan, and others who thought we had a workable version of laissez faire going. We did not. Unfortunately, Posner switched from confidence in laissez faire to faith in experts. Now he wants experts watching and directing. Well, we got just that with the Dodd-Frank Act. We now have a panel of Solons, the " Financial Stability Oversight Council," seated at the commanding heights of the economy. What could go wrong?

[Mathieu Bédard]

There are two reactions to complexity, but there are a multitude of suggestions on the table to give experts control, centralization can take many shapes. It goes from centralizing counter party risk in clearing houses, to establishing wind-down plans prior, to transparency schemes, turning debt into equity during crisis, etc. I'd be curious to know which of these Posner favors considering they're pretty much all invalidated by a basic law & economics analysis...

[Greg Ransom]

Steve, do what I've done. Go through Posner's work where he talks of Hayek.

Then you decide.

Posner reads hundreds of books each year (going by his references), works as a Federal judge, and cranks out endless books, and teaches.

Would it be a surprise if something in all that came out a bit superficial?

As to his work being over rated, I'm with those who see it overly "neoclassical" and as not grounded in the reality of the market process -- he gets credit for being a pioneer non the less.

But has he read Hayek? Show me solid evidence that he has.

Steve writes,

"Greg, Do you not realize how silly you sound or do you just not care about how silly you sound when you say things like you think Posner never read a word of Hayek?"

[Greg Ransom]

Irving Kristol spent decades belittling Hayek's _The Road to Serdom_ as extreme and not to be taken seriously ideological agit prop.

Then a few years ago Kristol admitted he'd never read the book.

Krugman repeatedly attacks Hayek and this economics, on the most baseless of ground, baldly stating the Hayek made no contribution of any kind to the growth of economic thought.

I'm no longer wet behind the ears when it comes to this stuff.

[Steve Horwitz]

Seriously Greg. Unlike you, I take people at their word unless I have evidence to the contrary, so the burden of proof is on YOU.

But because I'm a nice guy, I'll help you out by giving you some evidence that he has actually read Hayek. Now you won't like his *reading* of Hayek, but that's not the claim you made. You doubt he's actually READ him. If you still maintain that doubt after reading this link (again, you won't agree with his *reading* but it's clear he's READ), then I can come to no other conclusion that your intellectual biases have so colored your judgment that no one should take you seriously anymore.

Sorry if that is harsh, but I mean it.

http://www.law.nyu.edu/ecm_dlv2/groups/public/@nyu_law_website__journals__journal_of_law_and_liberty/documents/documents/ecm_pro_060888.pdf

[Greg Ransom]

Steve -- I clearly didn't know of this article. Posner is a remarkably productive man, it can't be disputed.

I still want to know, does he produce all of his own research and writing?

Larry Tribe and other leading law professors do not.

And judges, of course, have help writing their opinions.

[Steve Horwitz]

The degree to which he authors his own work is a good question Greg, but clearly a separate one from the one you posed.

[Greg Ransom]

The superficiality problem I suggested earlier raises it's head in Posner's article on Hayek.

One example:

"He puts too much weight on evolution, neglecting the fact that, lacking a
teleology, evolution cannot be assumed to lead to normatively attractive results."

In fact, Hayek addresses this issue, in his _Law, Legislation, and Liberty_, concluding that non-attractive evolutionary pathways will at times need to be cut off by the action of judges or legislatures.

Posner's article is terrific for bringing important issues and a great depth of experience to the issues at hand, and it certainly points to limitations of any work that plays at such a high level of theory and abstraction as does Hayek's.

A fair criticism of most all of Hayek's work is that it suffers from a real poverty of examples and practical cases and real world stuff.

Another example of, lets call it, fast and loose reading / analysis:

"His position underscores the tension between liberalism and democracy.
As one of his sympathetic commentators remarked, “Hayek is not opposed to democracy
as such.” But in practice he sees democracy as paving the way to socialism."

In Posner's books, this is the sort of thing I've come across in passing, with the name "Hayek" in it.

Why shouldn't I have concluded that he'd actually not read Hayek?

[Greg Ransom]

Three thoughts reading the Posner paper on Hayek.

1. The paper is worth reading, and elegantly lays out some nice points, e.g. the difference betweeh the Smith/Mandeville case for the market and the Hayek case for the market.

2. The thing seems derived overwhelmingly from the secondary lit on Hayek, rather than from original texts -- reflecting what is good and bad in that literature.

3. Posner ascribes stuff developed in the secondary literature to Hayek, stuff that goes beyond Hayek's own articulations, e.g. the discussion of tacit knowledge or rule following.

[FC]

Getting back to the original question of why Posner is re-fighting the calculation debate, he was an English major. QED.

[Troy Camplin]

Mathieu,

Perhaps, but one has to have read Keynes to be a Keynesian, a post-Keynesian, or a neo-Keynesian. And GT has had a huge influence, and continues to have such. There's some good stuff in GT, but the anti-economic (or folk economic, if you want to be more generous) thinking in it is overwhelming.

Daniel,

You may not think so, but even smart people can be influenced by bad ideas. I could ask the same thing I did about Marx. Or many postmodernist thinkers. Especially in light of the evidence against their ideas after all these years.

[Rafe Champion]

Most of the smart people in the last century or two were socialists, including Einstein and Bertrand Russell. Recently they have been Keynesians. What does that tell you about the correlation between smarts and economic literacy?

[Jim Rose]

Posner does have law clerks, perhaps 2. He writes more opinions than any other appeal court judge, and is widely cited. Posner thanks his research assistants in his books and papers.

Having read many of Posner’s books, book reviews and opinions, he is the writer of his works. The same razor shape mind is omnipresent.

See also Stephen J. Choi & G. Mitu Gulati, Choosing the Next Supreme Court Justice: An Empirical Ranking of Judge Performance, 78 S. CAL. L. REV. 23 (2004) and

MR. JUSTICE POSNER? UNPACKING THE STATISTICS at

http://www.law.nyu.edu/ecm_dlv4/groups/public/@nyu_law_website__journals__annual_survey_of_american_law/documents/documents/ecm_pro_064625.pdf

which says as follows at p.24:

“Informal discussions with former law clerks and members of the judiciary confirmed this result: Posner apparently writes every single word of his opinions—not most words or the majority of words, but every single word!”

As would be expected, there is a literature on whether federal judges actually write their judicial opinions.

[Jim Rose]

Posner does have law clerks, perhaps 2. He writes more opinions than any other appeal court judge, and is widely cited. Posner thanks his research assistants in his books and papers.

Having read many of Posner’s books, book reviews and opinions, he is the writer of his works. The same razor shape mind is omnipresent.

See also Stephen J. Choi & G. Mitu Gulati, Choosing the Next Supreme Court Justice: An Empirical Ranking of Judge Performance, 78 S. CAL. L. REV. 23 (2004) and

MR. JUSTICE POSNER? UNPACKING THE STATISTICS at

http://www.law.nyu.edu/ecm_dlv4/groups/public/@nyu_law_website__journals__annual_survey_of_american_law/documents/documents/ecm_pro_064625.pdf

which says as follows at p.24:

“Informal discussions with former law clerks and members of the judiciary confirmed this result: Posner apparently writes every single word of his opinions—not most words or the majority of words, but every single word!”

As would be expected, there is a literature on whether federal judges actually write their judicial opinions.

[Jim Rose]

See also to quote http://money.cnn.com/magazines/fortune/fortune_archive/2000/01/10/271747/index.htm

‘Unlike most judges, moreover, Posner drafts all his own opinions. Though his clerks describe him as a relaxed family man who likes to dally at lunch and keeps unremarkable hours, Posner magically assumes the productivity of J.S. Bach when he sits down at the keyboard. "He has the ability to write final prose in his first draft," says Harvard Law professor Lawrence Lessig, who clerked for Posner in 1989. "He could go home in the evening and produce two 30-page, single-spaced opinions, with citations, in one evening. They were good enough to be published without any editing."’

[Troy Camplin]

Rafe,

Most smart people would be wise to realize what Socrates discovered: that just because you are an expert in a field, that does not mean you understand other fields; and that just because you are an expert in a field, that doesn't mean you know what you are talking about in your own field, either!

[Successfulbuild]

Actually, the CIA did indeed know that al-Qaeda or people associated with that network were determined to strike against the United States. A terrorist was even arrested prior to 9/11 attacks. The Bush administration chose to ignore it.

So I would say that is an example of the information being there, and coordinated, but a failure to act.

If anything, this _strengthens_ Posner's point, not weakens it. (I haven't read the book yet, but have been wanting to.)

[FC]

Successfulbuild:

I'm sorry, you seem to have mistaken an economics blog for Infowars.

[Greg Ransom]

Thanks Jim.

Posner is both remarkable and exceptional.

In the case of other top law professors much of what the the reseach assistants write ends up in the book.

It remains an open question how dependent Posner is on these research assistants.

Also, still unanswered is the relation between the research assistants and the citations. Do the assistants collect the citations and pre-read the primary material? Does Posner then re-read everything cited, e.g. did he then go read Hayek's _The Sensory Order_, or Hayek's "The Use of Knowledge in Society" and the dozens of other citations in his Hayek piece?

[Greg Ransom]

"In the case of other top law professors much of what the the reseach assistants write ends up in the book."

This was revealed in the case of several famous plagerism cases as Harvard Law.

The famous law professors were excused because "the research assistant did it".

[Greg Ransom]

More the plagiarism case and on the use of assistance by law professors here:

http://www.boston.com/news/education/higher/articles/2004/09/28/tribe_admits_not_crediting_author/

Quotable:

Dershowitz said yesterday that law and academia sometimes have different standards, and Harvard Law School would benefit from establishing a committee to lay out clear guidelines on attribution and the use of assistants.

"Particularly in law schools, the rules are not clear, because there is a culture of judges and lawyers relying on the work of assistants," he said.

[Steve Horwitz]

It continues to puzzle me Greg that someone like yourself, who comes across as a reasonably sophisticated thinker with respect to the philosophy of science, is constantly trying to interpretively torture every piece of evidence so that it matches your own particular "conspiracy of the evil and incompetent" theory of academia even when such evidence seems plainly, to the rest of us, to contradict it.

[Jim Rose]

thanks Greg,

Posner's recent The Little Book of Plagiarism (2007) would be a good source in your hunt for plagerism, past and present.

Posner is as smart as they come. I often agree with him, but sometimes do not.

[Greg Ransom]

I've never doubted Posner's intelligence, I have been a fan of his introduction of economic thinking into jurisprudence, and is productivity is a true marvel.

What I long suspected was that what is true of most famous law professors and most judges was also true of Posner -- quoting Dershowitz, "there is a culture of judges and lawyers relying on the work of assistants."

I'm convinced this is not true in the case of Posner's well know legal work. I'd still like more evidence on Posner's many books.

I've read a review of Posner's book on plagiarism, but have not read the book.

[Greg Ransom]

Steve, let me quote Deshowitz again, ""there is a culture of judges and lawyers relying on the work of assistants."

I didn't make that up. I am simply aware of the fact.

Judges are dependent on clerks. That is well know.

It is rare for judges to do all of their own writing.

These are commonly known facts.

And then there is the special culture of book writing famous law professors, which I've noted above.

I didn't make that up either.

Again, these are well known fact.

This isn't a conspiracy. It's the way things have been done in this branch of the academy and the law.

In politics, most folks don't write their own books.

This also isn't a scandal, it's the way the world is.

[Greg Ransom]

I also didn't make up the fact about Kristol -- who was a public intellectual, not an academic.

And the fact about Krugman -- well, what needs to be said about that?

Krugman has confessed that he can't bring himself to read any economics not published since the 1970s -- most especially he confesses he can't bring himself to read "literary economics" of the kind economists produced in the dark ages, i.e. prior to the time of Krugman's own education.

So when we read Krugman writing stuff about Hayek that isn't credible -- and which shows zero familiarity with Hayek's actual work -- we have a double reason to believe Krugman doesn't know what he is talking about.

And I also didn't make up the facts reported in the work of David Colander, the fact that new economists don't know and are not taught much of anything in a wide range of areas, including the history of economic thought.

And it's just a fact that the history of economic thought has been eliminated from the curriculum of most trained academic economists.

These are facts, they aren't a made up conspiracy coming out of my imagination.

The sociological facts are out there. No one has to make them up.

[Greg Ransom]

The notion that public intellectuals and academics are exempt from being human and showing all of the full realm of human qualities is laughable.

It's also absurd for us to apply the explanatory tools of sociology, psychology, and political economy to every human institution and endeavor _accept_ the actors and institutions which make up popular debate and academia.

I direct your attention to this article in the NY Times by John Tierney pointing out some level of the absurdity:

http://www.nytimes.com/2011/02/08/science/08tier.html?_r=3&ref=science

Even in the realms of the academy which have a solid check in reality -- inter-subjectively testable experimental results that follow natural laws, you still find actors and institutions which are recognizably human. Perhaps the most famous account of this can be found in Nobel Prize winner James Watson's autobiography, _The Double Helix: A Personal Account of the Discovery of the Structure of DNA_.

As for the humanities, the work of Dan Klein has some interesting data -- data which calls out for explanation.

There are explanatory problems here. It tells us something about academia that these problems and questions are rarely acknowledged, much less tackled (although there is a small literature on the guild structure of economics).

[Greg Ransom]

Steve, contemporary "philosophy of science" includes empirical study and theoretical modeling of scientific practice and scientific institutions, broadly conceived. You see aspects of this in David Hull's _Science as a Process_ and in Thomas Kuhn's _The Structure of Scientific Revolutions_.

Philip Kitcher has even attempted to apply a Lerner/Lange type construct to the evolution and planning of science.

Philosophers of science are even interested in "life in the lab" science studies work of people like Bruno Latour, no matter how confused Latour himself might be.

And I'm guessing you are familiar with some of the "economics of science" conferences that folks like Mirowski have participated in.

[Greg Ransom]

If you want to be serious here, Steve, rather than accuse me of being Glenn Beck and of beating my wife, let's be serious.

There is a long standing culture of dismissal when it comes to the scientific work of Hayek -- Hayek himself was aware of it and talks of it, how after _The Road to Serfdom_ he had become persona non grata in the economics profession.

Bruce Caldwell relates how this _continued_ across the years, illustrated in a story told by Mark Blaug:

"I remember speaking with Mark Blaug about The Road to Serfdom. Mark said that when he read it, he thought it was just a reactionary screed, and he had absolutely nothing to do with the Austrians for many years after that. And then he said he re-read it, maybe in the 1970s or 1980s, and he was surprised at his initial reaction. I think it really is hard for us to get into the mindset of previous generations, to really understand what was acceptable dialogue. We may be the same people but the presuppositions that we make can be quite different over time."

But the culture of dismissal began earlier, with Keynes' "bedlam" smear in Keynes' own scientific journal, and his belittling of Hayek in his personal correspondence and in conversation with the younger generation.

And we can see it outside the RtoS context, in the wider context of doing economic science.

Friedman and the Chicago school economists dismissed Hayek as a "scholastic" who didn't believe in empiricism or causal explanation -- a patent failure to "get it" when it came to Hayek's scientific strategy. Friedman expresses this characterization of Hayek in several places, including in a letter to Hayek himself!

Samuelson dismisses Hayek on the same grounds, also dismissing Hayek as a "scholastic" and as someone who didn't believe in empirical science.

Note that Samuelson believed he was working in the Mach/operationalist tradition of empiricism, and Friedman believed he was working in some sort of verification/falsification/statistical tradition of empiricism, pragmatism and instrumentalism, with sources in several philosophical traditions, including the Columbia econ department "empiricist" tradition.

Now note the culture of dismissal moment in Posner's paper, the ultimate conclusion of the paper which the rest has been building to:

"The endeavor of Hayek’s successors that I am concerned with has foundered on his failure to have bequeathed to them any guidance on how to extend his approach to problems other than the
problem of central planning."

Perhaps Posner's remarks do not fit into a long standing (and largely off target) culture of dismissal, and instead the work Steve and the rest here on Coordination Problem have done actually does fit Posner's characterization.

This is essentially contested territory. I favor the view that Posner's work fits in a multi-decade and demonstratively off-target culture of dismissal, and the work of Steve and others here isn't mere floundering.

Others can hold otherwise and make their case.

Posner's article is superior to most others in that he does bring substantive arguments to the table that are in the ballpark.

This has much to recommend it over the dismissals of Samuelson, Friedman, and Keynes -- who didn't.

[K Sralla]

"In terms of contemporary social science, Hayek is someone we nod to, but don’t read. Once that is said, it doesn’t seem quite right because his name is a household name among economists and political economists, and he is discussed far more than other earlier Nobel Prize winners, such as Gunnar Myrdal, with whom he shared the prize. The explanation I offer is that Hayek is just another example of the intellectual’s ‘table book’ -- the book is displayed, certain key phrases from the argument are learned and repeated at appropriate moments of the conversation, but the book is never really read and the message is not engaged with a level of seriousness appropriate for the material." -Peter Boettke

Steve, I think this is the same basic idea that Greg was trying to get across.

By the way, a blog is not a peer reviewed technical journal. Obviously, Greg would not write that way for a journal submission, but that is one of the things that make blogging interesting. Sometimes we get "off the record" thinking. Now if the journal police are reading Coordination Problem, that might indeed be a problem for Greg if he submits a technical paper.

[Greg Ransom]

I should add that both Carnap and Popper endorse institutional analysis as part of the philosophy of science.

[Greg Ransom]

I mostly talk about founder effects, filter processes, formal metric biases, guild structures, group sociology, and the pathological legacy in social science of the foundationalist / formalist tradition in philosophy when I talk about the institutional and scientific problems of economics -- and of the humanities and social sciences more generally. I rarely call attention to evil or incompetence -- say the global warming scandal at East Anglia or McCloskey's work on significance testing.

But is it a good time to raise this issue when all sorts of academics are being exposed as taking money and writing puff pieces as part of Ghadafi's multi-million dollar PR campaign?

[Jeffrey Friedman]

This is outrageous. Posner is a genius and something of a "conscience of the free marketeers," which is a very valuable thing. Yet he is human and makes mistakes. Attributing those mistakes to clerks--is this an inept way of attributing omniscience to Posner, such that he could not be responsible for the mistakes? If so, it more than compensates for its backhanded compliment to his mind by ludicrously and without evidence suggesting that he is without scholarly conscience. Yet anyone who has had any contact with him will testify that he is truly a prince of scholarly integrity.

For example: In my introduction to Critical Review's issue on the financial crisis, I severely criticized Posner's first book on the crisis for blaming corporate-compensation incentives for risk taking among bankers. I pointed out that in fact banks bought the safest and lowest-yielding mortgage bonds, those issued by Fannie and Freddie (implicitly govt. guaranteed) and those rated AAA. Risk-and-return-seeking bankers would have done the opposite. End of the corporate-compensation theory.

Yet Posner graciously agreed to write an Afterword to Penn's book version of that issue of CR. Not only that, but he basically conceded my point. The man has no apparent pridefulness or defensiveness--but he needs to be defended by someone, so I'm happy to do it.

If you want to understand where Posner went wrong, look to his paradigm, not some more sinister explanation. Law & econ is more the a priori study of ideal laws that would align incentives properly than it is the historical study of real laws that have screwed incentives up. For instance, the banks bought those Fan/Fred & AAA mortgage bonds because the Basel regulations penalized banks that instead issued business loans or even whole (unsecuritized) mortgages. Posner did not seem to know anything about this. And therefore, lacking a microeconomic theory of what caused the crisis (apart from corporate compensation), he turned to macro (Keynes).

If you want to understand all this read Wladimir Kraus's critique of Posner's two books on the crisis in the next double issue of Critical Review (vol. 23, nos. 1-2).

[Greg Ransom]

The fact that judges and law professors are extensively aided by their clerks and assistance is not "sinister" -- its a FACT of the culture, as Dershowitz underlines.

Clerks and research assistants do the research and they write stuff, that is why they are called clerks and research assistants.

People should stop talking like they just jumped off the turnip truck.

If Posner is utterly unlike all of his peers, bully for Posner. It's a fact that is new to me.

I've been paid to write stuff by professors, stuff published under their names, with "credit" for "help" in the acknowledgments.

This is not "sinister", this is not a "scandal", it's what happens across the university -- assistants help professors in this business. It happens in science, it happens in the humanities.

If it doesn't happen in economics, that makes economics an outlier.

[McKinney]

I agree with Greg Ransom on how well critics read Hayek. I can read Hayek and Mises, and then read critiques of them by other and I know for a fact that one of us doesn't understand Hayek and Mises at all.

So I re-read the material and am convinced that I understand what Hayek and Mises were saying and the critc got it wrong. But why?

Maybe the critic hasn't read Hayek, as he claims, but has merely read the critiques of others. But I often find that voracious readers tend to be sloppy readers. They actually skim and claim to have read something. And as they skim they're not trying to understand the author, but are putting the author's words in the context of what they already assume is true.

I am a slow reader and often read things two or three times in order to make sure I understand the material. As a result, I don't read as many books as others. But I can guarantee you I understand what the author is saying and won't misrepresent him.

I don't find the same attitude in other academics. For many, the goal is quantity of reading, not quality. As a result, they get a lot of the material wrong.

[Greg Ransom]

McKinney, imagine having read hundreds of articles and discussions in books producing this sort of effect ... I do admit this experience has made me a bit jaded in this respect.

One of the happy developments of the last two or three decades is that an important segment of the Hayek literature has vastly advanced in quality.

McKinney,

"I agree with Greg Ransom on how well critics read Hayek. I can read Hayek and Mises, and then read critiques of them by other and I know for a fact that one of us doesn't understand Hayek and Mises at all."

[Greg Ransom]

Khaddafi and the Harvard & L.S.E. professors:

http://chronicle.com/article/The-Intellectual-as-Courtier/126640/

http://motherjones.com/politics/2011/03/libya-qaddafi-monitor-group

I case anyone didn't know what I was talking about above.

[Friedrich]

This misconception is all around. If the is too much of something and it does not help just even more is the "solution".

Just see what happens. There is too much money (btw worthless) around. Still things are not good so print more money. Name it "funny" like qualitative easing I, II, III.

It can not be conceiled that the way to goo is producing more "money-out-of-nothing". Now there are still falling banks etc. So at another bail-out. Start with some number and raise it up to more of ten times the initial "call". See Paulson and his unbelievalbe stupid 700 billions fail-out plans.

To prevent people understanding what's going on, start with "adopting book-keeping to the "current needs"

So I can not see any contradiction to this "demand". You know you just put enough clever people among themselves and then nothing could go wrong....

And if it goes wrong blame capitalism, speculants, and last but not least the weather.

I'm so fed up with this liars....