Idiot of the Week -- David Malpass

Podcast transcript:

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We considered on this edition of idiot of the week comparing David Malpass to the Ptolmeic astronomers, an image I've used in the past for supply siders who must invent ever more elaborate and complicated intellectual machinery to do what demand side does so simply, easily, effectively and convincingly. But Brad DeLong hijacked the Ptolmeic astronomy analogy this week with a piece in the Times attacking Judge Richard Posner and his Chicago School apology A Failure of Capitalism.

We skewered Posner on Idiot back in April for the same book, though I see we misidentified him as Robert Posner. Not the same.

Here's DeLong on Posner.

DELONG

Back to Idiot of the Week, not Posner, Not DeLong, but David Malpass. I started to compare Malpass to the Ptolmeic astronomers because of his insistence on making a way for the facts to fit an unworkable scheme.

MALPASS

Seems to make sense. Does it work?

Here is Malpass in August 2008, nine months ago, just before the systemic collapse of the financial sector. As I mentioned, Malpass was chief economist at Bear Stearns. 'nuf said.

MALPASS

David Malpass, strong dollar, corporate welfarist, IDIOT OF THE WEEK!

We conclude with this question. If Citi fails, what happens to the toxic stuff on the Fed's balance sheet? Can the Fed become a zombie?

Footnote:

Ptolmeic Astronomy

1. All motion in the heavens is uniform circular motion.
2. The objects in the heavens are made from perfect material, and cannot change their intrinsic properties (e.g., their brightness).

3. The Earth is at the center of the Universe.
4. The 55 concentric circles around the earth are set in motion by the prime mover outside the last.