Moment of silence

Jan. 7 (Bloomberg) -- The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.
Sounds like a Chicago School of Economics to me.

Why wouldn't there be one? Still, the school of Hayek seems to be a more comprehensible and valid model that the purist Chicago or Keynesian schools of thought. We thought houses were worth more than they were, is that an inefficient market? Or is that government intervention via artificially low interest rates, mortgage interest deductions (renters subsidizing home owners and bankers!), buying sub-prime loans, mismarking Alt-A loans as prime, etc. can make it difficult to have an efficient market?

The sad fact is that 90% of our economists have been trained in the neo-Keynesian school, reading things like Samuelson's text book predicting greater growth rates in Soviet Union for years. Is this why they think using (future) tax dollars, borrowed at interest or created via the printing press, to buy mortgage backed securities to reflate home prices is a great idea? I'm not sure, but I am definitely thinking it's a bad idea.

There is still no excuse for JP Morgan holding derivatives valued at greater than world GDP, no matter what school you subscribe to. At this point in time, we need someone who really understands unraveling risk, like Nassim Taleb, to run the show, not a bank puppet like Gheitner or a deluded academic like Bernanke.

Of course there's still a Chicago School: tune in to CNBC and listen to the hucksters pushing stocks and decrying the gummint.

I went to the Univerisity of Chicago. At the univeristy of chicago, there is just an economics department. Since the Chicago School of Economics turned out to be horribly short-sighted, it was my experience that most of the professors who studied econimics spent their time critiqueing the foundational ideals of the "chicago school of economics."

Of course, even though the source of the chicago school has changed course, there are still lots of disciples out there who use the idea of the Chicago School for their own gain / to support their own beliefs. So yeah, maybe there still is a Chicago School out there in the same way that 130 years after slavery there is still a Republican Party (but can we really call it the party of Lincoln?).

I always took "Chicago school of economics" to refer to a school of thought based at U of Chicago, not actually the name of an institution.