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2010-10-06 14:02:42

The Religion Named Economics

<p>It seems to many that more than a science  economics is a religion. One noted economist Paul Krugman has argued that the  Federal Reserve officials, finance ministers together with the politicians are  behaving like the priests of a religious cult asking for human sacrifices to  satisfy gods that cannot be seen. These gods are the ‘bond vigilantes’ who order  cuts in spending by the government to bring down the budget deficit so that the  bond market becomes healthier. This would lead to growing confidence in the  country’s <a href="">economy</a>.</p>
  Robert Rubin who was the Treasury Secretary  during the time of Clinton era was a noted advocate for reducing deficit. He  wrote in his memoirs, “In important ways, the deficit had become a symbol of  the government’s inability to manage its own affairs and our society’s  inability to cope with economic challenges …” With people getting to know that  the deficit was being reduced interest rates tend to lower and confidence to  increase. This would lead to a chain reaction of spending coupled with  investments as well as creation of jobs.</p>
  Rubin is the guru of Larry Summers, the  economic advisor of President Obama and Timothy Geithner the present Treasury  Secretary. Both Summers and Geithner had worked under Rubin. They are for  fiscal reduction while Krugman recommends Keynesian style intervention. The  bond advocates wants the markets to work by itself without too much spending by  the government; they want it to be kept at levels that can be sustained.</p>
  Joseph Stiglitz the Nobel Laureate  economist differed with the group at <a href="">Washington</a> at the time of the Asian <a href="">crisis</a> regarding interest rate tightening reducing <a href="">monetary</a> deficits bang in the  middle of a catastrophe. He has lately written one of the most compelling books  on the present crisis – Freefall: America, Free Markets, and the Sinking of the  World Economy. It is not just a step by step recount of the incidents and the  causes but a slam at the crisis-in-economic and crisis-in-morals.</p>
  He opined that economics had moved away”  from being a scientific discipline into becoming free market capitalism’s  biggest cheerleader”. The economists of the mainstream had become so indulgent  in their faith in the <a href="">market</a> that it was almost set up like a “theological  position’. It soon was evident that no proof or research could take away their  blind faith from it. It was a kind of bigotry.</p>
  Stiglitz expounded, “Within the cathedral  of mainstream economics, there are many chapels devoted to specialized  problems. Each has its own priests and even its own catechism”.</p>

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