I've written of his fascinating book before. He contends that they did totally evade responsibility-I actually think while his view is understandable, they aren't necessarily totally out of the woods in the future as even Krugman has suggested that maybe even his own Classical Synthesis from Samuleson may be somewhat implicated.
Still it's true it surely hasn't simply imploded and he may be right-I just think that there have been some heterodox schools which are at least being considered now.
In any case his first explanation for how they made it totally intact is thanks to the Fed bailing them out along with the financial sector. He argues that the relationship between Neoclassical Econ and the financial sector-and those charged with regulating it; major regulatory capture...-is so incestuous that by bailing out one you bail out the other. He thinks that had the banks been held accountable the press would be much more likely to hold the NC profession accountable. So the immunity of the financial sector, translates into immunity for NC.
http://www.amazon.com/Never-Serious-Crisis-Waste-Neoliberalism/dp/1781680795/ref=sr_1_1?s=books&ie=UTF8&qid=1379672051&sr=1-1&keywords=mirowski+philip
It makes some sense. Though they did the things he would have wanted in Britain and elsewhere-breaking n up the banks, cleaning up the shadow banking sector, a purge of the Fed, the SEC, CFTC, even the IMF and this would have also called into question the assumptions of NC much more-EMH, the idea that the markets are self-regulating and will by definition always do a better job than the private sector, etc.
Yet, the NC and certainly Neoliberalism-NL-remains intact in Europe as well. Indeed,arguably the EU response has been even more NL than the U.S. response. He then mentions Larry Summers including the quote of him declaring "we are all Friedamnites now."
"If John Maynard Keynes was the most influential economist of the first half of the 20th century, then Milton Friedman was the most influential economist of the second half."
Still it's true it surely hasn't simply imploded and he may be right-I just think that there have been some heterodox schools which are at least being considered now.
In any case his first explanation for how they made it totally intact is thanks to the Fed bailing them out along with the financial sector. He argues that the relationship between Neoclassical Econ and the financial sector-and those charged with regulating it; major regulatory capture...-is so incestuous that by bailing out one you bail out the other. He thinks that had the banks been held accountable the press would be much more likely to hold the NC profession accountable. So the immunity of the financial sector, translates into immunity for NC.
http://www.amazon.com/Never-Serious-Crisis-Waste-Neoliberalism/dp/1781680795/ref=sr_1_1?s=books&ie=UTF8&qid=1379672051&sr=1-1&keywords=mirowski+philip
It makes some sense. Though they did the things he would have wanted in Britain and elsewhere-breaking n up the banks, cleaning up the shadow banking sector, a purge of the Fed, the SEC, CFTC, even the IMF and this would have also called into question the assumptions of NC much more-EMH, the idea that the markets are self-regulating and will by definition always do a better job than the private sector, etc.
Yet, the NC and certainly Neoliberalism-NL-remains intact in Europe as well. Indeed,arguably the EU response has been even more NL than the U.S. response. He then mentions Larry Summers including the quote of him declaring "we are all Friedamnites now."
"If John Maynard Keynes was the most influential economist of the first half of the 20th century, then Milton Friedman was the most influential economist of the second half."
"Not so long ago, we were all Keynesians. (“I am a Keynesian,” Richard Nixon famously said in 1971.) Equally, any honest Democrat will admit that we are now all Friedmanites. Mr. Friedman, who died last week at 94, never held elected office but he has had more influence on economic policy as it is practiced around the world today than any other modern figure."
"I grew up in a family of progressive economists, and Milton Friedman was a devil figure. But over time, as I studied economics myself and as the world evolved, I came to have grudging respect and then great admiration for him and for his ideas. No contemporary economist anywhere on the political spectrum combined Mr. Friedman’s commitment to clarity of thought and argument, to scientifically examining evidence and to identifying policies that will make societies function better."
"Mr. Friedman is perhaps best known for his views on money and monetary policy. Fierce debates continue on how the Federal Reserve and other central banks should set monetary policy. But the debates take place within the context of nearly total agreement on some basics: Monetary policy can shape an economy more than budgetary policy can; extended high inflation will not lead to prosperity and can lead to lower living standards; policy makers cannot fine-tune their economies as they fluctuate."
"These insights may seem self-evident — but they were won through a combination of Mr. Friedman’s powerful argument and painful experience. I know. As an undergraduate in the early 1970s, I was taught that everyone other than Milton Friedman and a few other dissidents knew that fiscal policy was of primary importance for stabilizing economies, that the Phillips curve could be exploited to increase employment if only society would tolerate some increase in inflation and that economists would soon be able to tame economic fluctuations through finely calibrated policies. When I started teaching undergraduates a decade later, Mr. Friedman’s heresies had become the orthodoxy."
A few thoughts.
1. It's amazing Scott Sumner doesn't like him better as this is what he wants more than anything-that everyone believe that 'monetary policy can shape the economy more than budget policy can and Summers has long sung from that hymnbook. j
2. We sure dodged a bullet in defeating this guy for Fed
3. Certainly if the phrase 'regulatory capture' means anything, he'd seem to be prime candidate with the many millions he's received from big banks. Just the same, is it not possible to at least argue that his rejection by the Democratic base for Fed shows some reason to hope-that there is at least some push back against what Mirowski calls Neoliberalism?
4. Summers actually has become something of a proponent for fiscal stimulus since 2008. There is still the much contested story of whether he quashed Christina Romer's call for more stimulus in 2009. Some versions of events have him as basically supporting Romer's position in the White House in 2009.
Here he is in 2012 making a pretty full-throated case of fiscal stimulus by pointing out that it 'pays for itself'-thanks to record low interest rates.
Nevertheless Mirowski seems to think this is more a case of the strength of Summers' 'reapolitik' and seems skeptical that he really meant it. And the Huffington Post is also very skeptical:
"Summers and DeLong argue that fiscal stimulus spending can self-finance because of increases in both consumer spending and investment, which, in turn, raises future incomes and tax payments, offsetting more government spending. But they made sure to emphasize that their analysis refers only to when economic growth is shrinking and not once the economy has recovered."
Huff Po also argues that in this paper he had markedly changed his tune from the past:
"The paper stands in contrast to Summers' advice to the president in the wake of the worst financial crisis since the Great Depression. Summers, in fact, opposed those arguing for larger stimulus and emphasized the need to cut the deficit, in part because the stimulus would cost so much, according to The New Republic and The New Yorker, respectively."
"Indeed, in real life, Summers was much more prone to consider the political consequences of such an act, writing to Obama in a December 2008 memo that Obama's stimulus proposal "could come as a considerable sticker shock to the American public and the American political system." He added that an overly ambitious stimulus could scare investors and cause borrowing costs to spike, according to The New Yorker."
His friend and co-author, Delong is one of the few liberals not happy that Lawrence's nomination has sunk.
He does now support Yellen for Fed. It's tough to find anyone who doesn't-at among those who don't live at the White House. Let's hope that the worst theories about the Administration that out of spite it won't go with Yellen are false.
P.S. My suggestion that perhaps Summers' defeat denotes a new move against NL or at least a more liberal Democratic base going forward-I really had no problem with Summers getting a high appointment in 2009 and didn't think he was so bad as Fed chair until I started to read some of the arguments. Ultimately I agree with Krugman: May the best candidate win, with the proviso that by best we mean most dovish . All that mattered was if there was any reason to think that he would be more dovish than Yellen. There is absolutely no reason to think so and there is good reason to suspect the opposite. In addition we have some terrible optics-the jibe about women and their mathematical and scientific abilities, the questions about Harvard's finances and his possible culpability that ran him out of Harvard, all that money he got from his friends in the big banks, etc So at best-assuming he's no more or less dovish than Yellen he was stll clearly running way behind Yellen. We dodged a big one there.
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