Exciting News!!

The AMI’s Fifth Annual Monetary Reform Conference was our best one yet thanks to the quality speakers and participants who were a part of the weekend in Chicago. Stephen gives a big thank you to the intelligent young activists who came to help out at the conference.

We also received some great news from Congressman Kucinich! He called Stephen to announce that he would be introducing the American Monetary and Financial Security Act (formally the AMA) into Congress very soon. This is an important time to get everyone involved in bringing awareness to the issue of monetary reform. Keep checking back here and at our website for more news on this important development!!

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One Response to Exciting News!!

  1. Alan Tschetter says:

    Friends,

    Below is a New York Times article which appeared on July 5, 2010. It’s about a very small and admirable group of economists who actually study historical facts, and study them carefully.

    I think it’s very important for us to see the sheer silliness of replacing historical research with mathematical models. It seems that almost the entire world of academic economics could be described as an abstract bubble world or a house of mirrors.

    Alan Tschetter

    —–

    They Did Their Homework (800 Years of It)

    The advertisement warns of speculative financial bubbles. It mocks a group of gullible Frenchmen seduced into a silly, 18th-century real estate scheme, noting that the modern shareholder, armed with superior information, can avoid the pitfalls of the past. “How different the position of the investor today!” the ad enthuses.
    It ran in The Saturday Evening Post on Sept. 14, 1929. A month later, the stock market crashed.

    “Everyone wants to think they’re smarter than the poor souls in developing countries, and smarter than their predecessors,” says Carmen M. Reinhart, an economist at the University of Maryland. “They’re wrong. And we can prove it.”

    Like a pair of financial sleuths, Reinhart and her collaborator from Harvard, Kenneth S. Rogoff, have spent years investigating the wreckage scattered across documents from nearly a millennium of economic crises and collapses. They have wandered the basements of rare-book libraries, riffled through monks’ yellowed journals and begged central banks worldwide for centuries-old debt records. And they have manually entered, digit by digit, all of their findings into one of the biggest spreadsheets you’ve ever seen.

    Their handiwork is contained in their recent best seller, “This Time Is Different,” a quantitative reconstruction of hundreds of historical episodes in which perfectly smart people made perfectly disastrous decisions. It is a panoramic opus, both geographically and temporally, covering crises from 66 countries over the last 800 years.

    The book, and Reinhart’s and Rogoff’s own professional journeys as economists, are also emblematic of some of the broader shortcomings of their trade — all of which have been thrown into harsh relief by economists’ widespread failure to anticipate or address the financial crisis that began in 2007.

    “The mainstream of academic research in macroeconomics puts theoretical coherence and elegance first, and investigating the data second,” says Rogoff. For that reason, he says, much of the profession’s most celebrated work “was not terribly useful in either predicting the financial crisis, or in assessing how it would it play out once it happened.”
    “People almost pride themselves on not paying attention to current events,” he says.

    In the past, other economists took the same empirical approach as the Reinhart-Rogoff team. But their kind of work fell into disfavor over the last few decades as economists glorified financial papers that were theory-rich and data poor.

    Much of that latter body of work, critics say, is built on the same disassembled and reassembled sets of data points — generally from just the last 25 years or so and from the same handful of rich countries — that quants have whisked into ever more dazzling and complicated mathematical formations.

    But in the wake of the recent crisis, a few economists — like Reinhart and Rogoff, and other like-minded colleagues like Barry Eichengreen and Alan Taylor — have been encouraging others in their field to look beyond hermetically sealed theoretical models and into the historical record.

    Catherine Rampell

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