Email from reader NII. He points out the inbreeding amongst the financial leadership of the world. This is unhealthy and only guarantees more of the same coming from these institutions. Unfortunately the economic policy they represent has failed and will not work even if tried in larger doses.
Albert Einstein’s definition of insanity is about to be demonstrated again.
KEY CENTRAL BANKS AND MAJOR INTERNATIONAL FINANCIAL AGENCIES HEADS ARE EITHER FROM MIT OR WALL STREET OR PHDs.
NII: When Stanley Fischer entered into the race to head the IMF last Friday, I wanted to see who else was from either MIT or a WALL STREET BANK and how many were PhDs. Turns out many leaders are from one or both areas. They all seem to share the same Keynesian economic views, and they do not want change plans they implement 3-4 years ago.
How pervasive is “this club”? Read the list below. The head of the FED, ECB, Bank of England are all MIT products. Wall Streeters; 5 of below. Ph.D heaven; 7 out of 8.
No chance for a policy change with that collection.
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Stanley Fischer (Hebrew: סטנלי פישר) is an economist and the current Governor of the Bank of Israel.
He was a professor at the MIT Sloan School of Management from 1977 to 1988. He was also Ben Bernanke‘s and Greg Mankiw‘s Ph.D. thesis advisor.
Recall Stanley Fischer was part of Rubin/Summers/Geithner team in late 1990s when IMF destroyed (literally) the South Asian gov’ts by imposing austerity. After leaving the IMF, he served as Vice Chairman of Citigroup, President of Citigroup International, and Head of the Public Sector Client Group. Dr. Fischer worked at Citigroup from February, 2002 to April, 2005.
Mervyn King was a Visiting Professor at Harvard and the Massachusetts Institute of Technology (MIT) where he shared an office with then Assistant Professor Ben Bernanke. The failure by Greenspan and King to tackle the bubbles in their respective countries’ housing markets resulted in catastrophic “fallout” when the bubbles burst.
Donald Lewis Kohn (born November 7, 1942) is an American economist with a PhD who served as the former Vice Chairman of the Board of Governors of the Federal Reserve System. He retired after 40 years at the central bank in September, 2010. Recently,
Mario Draghi then earned a Ph.D in economics from the Massachusetts Institute of Technology in 1976 under the supervision of Nobel Laureates Franco Modigliani and Robert Solow. He was then vice chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002–2005). He may be next Chairman of the European Central Bank (ECB).
Mark J. Carney Carney completed a bachelor’s degree in economics from Harvard in 1988. He later attended Nuffield College, Oxford, where he received a master’s in economics in 1993 and a doctorate in economics (PhD) in 1995.[6 Carney spent thirteen years with Goldman Sachs in its London, Tokyo, New York and Toronto offices.
Ben Shalom Bernanke[1] He received his Ph.D. in economics from the Massachusetts Institute of Technology in 1979. His thesis was named “Long-term commitments, dynamic optimization, and the business cycle” and his thesis adviser was Stanley Fischer,
William C. Dudley became the 10th president and chief executive officer of the Federal Reserve Bank of New York on January 27, 2009. Mr. Dudley received his doctorate in economics (PhD)from the University of California, Berkeley in 1982 Prior to joining the Bank in 2007, Mr. Dudley was a partner and managing director at Goldman, Sachs & Company
Robert Zoellick served from 1993 to 1997 as an Executive Vice President of Fannie Mae.[10][11] Afterwards, Zoellick was appointed as the John M. Olin Professor of National Security at the U.S. Naval Academy (1997–98); Research Scholar at the Belfer Center for Science and International Affairs at the John F. Kennedy School of Government; and Senior International Advisor to Goldman Sachs.[8][11]
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DOW JONES NEWS ARTICLE
Subject: WSJ NEWS ALERT: Israeli Central Bank Head Exploring Bid to Lead IMF
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Israeli central bank chief Stanley Fischer is exploring a bid for the top job at the International Monetary Fund, a person familiar with his thinking said. Mr. Fischer, who ran for the position in 2000 when he was the IMF’s No. 2 official, sees himself as a possible compromise candidate, the person said.
France’s finance minister, Christine Lagarde, is currently the front-runner for the position, but faces some resistance from those who think the job shouldn’t go to a European. She already has at least one rival from an emerging country, Mexico’s central bank chief Agustin Carstens.
http://online.wsj.com/article/SB10001424052702304520804576348633776824992.html?mod=djemalertNEWS
It was a coincidence that I had just read an article by Francis Fukuyama & Seth Colby entitled “What Were They Thinking? The Role of Economists in the Financial Debacle” just before my daily perusal of this site. A paragraph from that article fleshes out the point of Monty’s post:
“As Keynes noted long ago, the views of academic economists are far more influential than those of virtually any other group of professors. Policymakers see a direct application of their discipline to issues of immediate concern to them. At the same time, non-economists are reluctant to question economists’ judgment for reasons having to do with the highly technical nature of their theories and methods. Given economists’ clout, there are relatively few intellectual checks and balances to the ideas that spill out of the discipline. Presidents, Congressmen and government officials can rarely follow the game-theoretic models that win Nobel prizes in economics, nor can they evaluate complex data analysis. When the consensus in the profession asserts that something is true—for example, that opening up a country’s capital account will spur growth and development—few non-economists feel qualified to gainsay them. But the truth is that the mathematization of contemporary academic economics lends spurious precision to a field that is pervaded by questionable premises, over-simplified models and ideological bias.”