Bankers vs. Economists
Who deserves more blame for the global economic collapse?
Which profession bears more blame for the global credit meltdown and its ensuing gazillion-dollar bailouts: bankers or economists?
This isn’t a trick question.
So far, bankers have been getting most of the opprobrium. Yes, there are a few solid bankers who didn’t destroy their firms. But pretty much all the prominent bankers failed. And their failures are writ large on the pages of the Wall Street Journal every day. They’ve been hauled before Congress, deposed and fired, lost vast fortunes, and been the targets of populist rage. By common consensus, bankers (and by this I mean the term as it’s used in the tri-state metro area, to describe anybody who works at a relatively high level in the financial services industry) blew it.
But they couldn’t have created the Dumb Money debacle without a substantial assist from economists. Toiling in government and academia, at trade groups and Wall Street firms, practitioners of the dismal science provided the intellectual ballast and justification for much of the insanity of this past decade. At every step of the way, as an Era of Cheap Money devolved into an Era of Dumb Money, and then into an Era of Dumber Money, Ph.D.’s led the cheers. And when things started to go bad, they failed to grasp just how bad things would get.
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