Ph.D. Octopus

Politics, media, music, capitalism, scholarship, and ephemera since 2010

J.P. Morgan Doesn’t Think you Understand the Laws of Economics

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by Wiz

One of our masters, James Glassman, managing director and senior economist at J.P. Morgan, is accusing the public of displaying an “unnerving ignorance of fundamental principles of market economics.” I gotta admit, its a pretty ballsy move for someone who received $25 Billion in tax-payer money, to accuse us of not understanding the wonders of the free market.

But it would be too easy to just jump on poor James Glassman. Rather what I like is the use of economics here as a master argument. “You all can’t use the democratic powers of congress to regulate us, even if the public is clamoring for it, because it violates economic law.”

The real J.P. Morgan was also an asshole.

Little displays the fundamental hatred of democracy at the core of so much libertarian market fundamentalism, as the discourse that voters can’t be trusted because they just don’t understand the high science of economics. We see it in the fear that auditing the Fed might allow the rabble to mistakenly think they have some say in our economy, or in Alan Greenspan censoring those who had concerns about the housing bubble in 2004 because allowing the debate in public might encourage “people to join in on the debate, and in this regard it is possible to lose control of a process that only we fully understand,” or worse, people like Bryan Caplan who think that voters are irrational because they don’t accept the gospel of Milton Friedman. As always, Thomas Friedman has the most vulgar and simplistic form of the argument, with his celebration of the “golden straightjacket” that prevents governments from, well, ruling themselves. (But they get cell phones!)

As Ezra Klein and others have pointed out, this appeal to scientific authority only works when you’re successful. You can’t claim, as Greenspan did, to be the only person who understands the situation, when you’re in the process of horribly fucking it up.

More to the point, though, as I’ve repeated ad nauseam, economics is a fundamentally value-laden field. We all have the right to intervene in the debate, because we all have something to say about equality, and social justice, and poverty and every other economic issue. That we can’t do math as well as Lawrence Summers hardly makes our opinion less valid. (As Jefferson wrote “Because Sir Isaac Newton was superior to others in understanding, he was not therefore lord of the person or property of others.”) In fact, it well may make it more valid, as we perhaps don’t get so blinded by what Krugman calls the tendency to “mis[take] beauty, clad in impressive-looking mathematics, for truth.”

Anyways… the take home point is that James Glassman is a douche-bag. But I probably didn’t need a 448 word post to convince you of that.


Written by Peter Wirzbicki

May 5, 2010 at 21:57

Posted in economics

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