Tuesday, January 19, 2010

Werner: Economists pretend the emperor is not naked

Prof Richard Werner has just** issued a very readable and hard hitting article  under the headings:
·    Crises Have Disproven Mainstream Neo-Classical Economics
·    What’s Wrong with Mainstream Economics?
·    The Reality of Credit Creation: There Is No Such Thing As a Bank Loan
·    How to Fix the Banking System and Ensure Employment

His article strips aside the false ideology undergirding modern economics and very clearly and convincingly shows what must be done to clear up the economic mess the world is in. Like an experienced master builder Werner lays down the principles necessary for a new foundation of sound economics. His historical studies (from his book Princes of The Yen) have covered what made both Germany and Japan highly successful in the 19th & 20th centuries. One good test of sound truth is that the basic philosophy can be made explainable to a non-expert  and Werner achieves this in spades. Ever read anything on economics that is exciting in its implications? Try Werner. I commend this article in particular to anyone who wants to get ahead of current economic thinking and who wants to glimpse the improved future we could enjoy.

When is the media going to wake up to economic reality? Why aren’t these ideas being discussed on TV, radio, in the press, in Parliaments, Congress? As HM The Queen might say (again) ‘Why didn’t anyone tell us there was an alternative way of using economic insights?' Werner has been doing so for a long time. He is, I believe, climbing to the very top of his profession.     

Topics in the article: credit creation; World Bank; Federal Reserve System; World Economic Forum, Davos; faith in free markets; central banks; commercial banks; Japan; economic growth; interest rates; non-fiction economics; markets do not clear; powerful allocators; government intervention; asset prices; exchange rates; real estate; bond markets; bad debts; bank credit; money supply; recession; depression; deflation; inflation; GDP growth; national debt; fiscal policy; moral hazard; 'quantitative easing' ( Werner's invented phrase which was highjacked to describe a process in Japan which he had told them would not work).  

** Correction: The article was actually posted sometime in late 2008

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