All too often the business press falls prey to reductive explanations. For instance, during the debt ceiling crisis, every time the market fell it was reported that stocks were down “on shutdown, debt ceiling concerns” or “as debt ceiling nears”. It was literally impossible for the market to fall without the debt ceiling being blamed — and of course there was no evidence at all to prove causation.
Steve Cohen’s art purchases similarly fall victim to this problem. Peter Lattman and Carol Vogel explained in Dealbook last week that Cohen is selling a number of works this November at the Sotheby’s contemporary art auction in New York, in addition to stocks, in order “to meet withdrawal requests from skittish investors”.
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The 2013 Nobel Prize in economics went to three economists whose research revolves around the Efficient Markets Hypothesis. Eugene Fama’s research points to asset prices reflecting all available information: essentially, markets are efficient. Robert Shiller, on the other hand, specializes in research about irrational and inefficient markets. And Lars Peter Hansen pioneered the econometrics that are “instrumental for testing the advanced versions of the propositions of Fama and Shiller”, according to Tyler Cowen.
Yesterday, Harvard historian Niall Ferguson published the third of his three-part screed against Paul Krugman (also see parts one and two). In doing so, he named and shamed “a claque of like-minded bloggers” who often agree with Krugman. Obviously, impuning a handful of bloggers and academics really opens the door to an immediate avalanche of counter-posts by the named, which is what we got today.
In case you had trouble keeping up, here is where everyone stands:
For too long, Paul Krugman has exploited his authority as an award-winning economist and his power as a New York Times columnist to heap opprobrium on anyone who ventures to disagree with him. Along the way, he has acquired a claque of like-minded bloggers who play a sinister game of tag with him, endorsing his attacks and adding vitriol of their own. I would like to name and shame in this context Dean Baker, Josh Barro, Brad DeLong, Matthew O’Brien, Noah Smith, Matthew Yglesias and Justin Wolfers. Krugman and his acolytes evidently relish the viciousness of their attacks, priding themselves on the crassness of their language. But I should like to know what qualifies a figure like Matt O’Brien to call anyone a “disingenuous idiot”? What exactly are his credentials? 35,550 tweets? How does he essentially differ from the cranks who, before the Internet, had to vent their spleen by writing letters in green ink?