Tuesday, January 22, 2008
Because when they go to report on ‘The Markets’ they mean the casino of share and currency prices, and the second guessing of ‘trends’, and parroting of predictions. Often about as relevant to real market economics as opinion polls are to real politics.
With the current uproar the whole concept of serious economics risks being ever so slightly discredited. And that would be a rather dangerous thing.
‘Bloomberg Television Economics’ is what John Kay calls the media circus presentation of ‘markets’. A kind of market version of the religious fervour of Marxism. In these dangerous times maybe we should follow his advice and concentrate on serious and interesting problems – flower markets and corner shops, car salesrooms and power generation utility control rooms. Real life, in fact.
As for the current uproar, John Kenneth Galbraith had the simple explenation - it is a few decades since the last lot of naive adventurers thought that they had the infallible formula for effortlessly generating money for themselves and their friends through their special knowledge of the secrets of money. 'Financial genius comes before the fall'. Once more we have to learn the lessons in real time, paid for by ordinary people.
See John Kay ‘The Truth About Markets’, Penguin 2004