Economists and the Powerful: Convenient Theories, Distorted Facts, Ample Rewards (Anthem Other Canon Economics)
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“Economists and the Powerful: Convenient Theories, Distorted Facts, Ample Rewards” explores the workings of the modern global economy – an economy in which competition has been corrupted and power has a ubiquitous influence upon economic behavior. Based on empirical and theoretical studies by distinguished economists from both the past and present day, this book argues that the true workings of capitalism are very different from the popular myths voiced in mainstream economics. Offering a closer look at the history of economic doctrines – as well as how economists are incentivized – “Economists and the Powerful” exposes how, when and why the theme of power was erased from the radar screens of mainstream economic analysis – and the influence this subversive removal has had upon the modern financial world.
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moratorium on the CFTC’s ability to implement the strategies outlined in its concept release. Then they engineered passage of the Commodity Futures Modernization Act of 2000, which explicitly exempted OTC derivatives from government oversight. At the last minute, the bill was tucked onto an 11,000 page bill sampler and passed without serious consideration by lawmakers (Partnoy 1997/2009; Levine 2010). The derivatives that were allowed to remain in the shadows included the now infamous credit
2005 For textbook economists, financial markets are the best judges of corporate performance. Therefore, they want to eliminate anything that drives a wedge between the management of corporations and shareholders’ interests. They want appropriately designed payment contracts to achieve this. Michael Jensen and Kevin Murphy popularized the idea of pay-for-performance in the late 1980s and 1990s and built a great reputation on it. Jensen, professor emeritus at Harvard, is among the most
higher at an average of 68 percent in the five years to the end of 2010. Managers still have their ways of rewarding analysts who issue convenient forecasts and stock recommendations and punishing those who don’t. This discrimination can take many forms. Managers can invite or not invite analysts to meetings where they give useful information, and they can choose whether or not to return phone calls. They can allow analysts to ask questions during conference calls, or deny them the opportunity.
employed at market wages. In reality, there is a continuum ranging from good jobs on the primary labor market over those employed in less attractive or (involuntary) part-time work to those in precarious employment conditions. There are jobs with attractive working conditions and high wages, and others that combine unpleasant working conditions and low wages. These combinations are the opposite of how textbook economics describe the situation. Textbooks pretend, against all experience, that