The problem with bank economists

The problem with bank economists is that they’re so utterly embedded in the central bank/commercial banking cartel that any hope of logical economic objectivity is all but lost. The current arrangement between the central bank and the commercial banks is a cosy one for all concerned. Commercial and investment banks have a sweet deal like no other industry in the economy. They can lend, borrow, invest, trade and engage in all other manner of profitable activities and have an explicit solvency safety net and printer of first and last resort in the form of the central bank.

The problem with bank economists is that their job depends on the bank and the bank’s privileged position depends on the central banking fiat money system. So no bank economist is ever going to get up there and tell the truth about the fraud that is fiat currency and central bank created boom and bust cycles.

The problem with bank economists is that they’re in such a self reinforcing opinion-bubble that to get an original view from them is like drawing water from a stone.  Bank economists only really listen to other bank economists and all of them tow the banking cartel line.

The problem with bank economists is that they provide more of a marketing function than a strategic one for their banks and so, if we’re really honest, it doesn’t really matter what they say.  Bank Treasurers pay little attention to the resident bank economist, and business bankers make strategic credit decisions on specific credit metrics not their economists’ views.  Because bank economist views don’t matter much strategically, they don’t really have an incentive to form good views.

The problem with bank economists is that they’re scared to think out the box for fear of looking silly.  Yet more often than not their views are wrong.

The problem with bank economists is that the recent financial crisis has not caused any of them the slightest intellectual concern or elicited even the least bit of critical questioning of their beliefs.  It was Keynesian rubbish and central bank manipulation that got us into this mess, so that must mean we need more Keynesian rubbish and central bank manipulation!

The problem with bank economists is that they live in a financial world while the rest of us live in a real one. When the financial pseudo-reality diverges from actual real world reality, bank economists end up theorising and charting and prognosticating about a house of cards fantasy land.

The problem with bank economists is that they get way too much respect from ordinary folk who don’t really know what’s going on, so their very poor understanding of reality is given an undue place in public discourse.

The problem with bank economists is that they are so intellectually and professionally invested in their bad ideas that they’re utterly resistant to better ideas and most often downright reject them due to sheer pride.  In fact the rejection of sound economic ideas by bank economists is downright irrational and often their arguments are logically incoherent at best and embarrassingly ignorant at worst.

The problem with bank economists is they all have ‘formal’ economics training from the mainstream universities who peddle the same economic drivel.  Most of the sharpest economic minds I know are accountants, lawyers, equity analysts and business owners who actually have experience in how stuff works.

The problem with bank economists is that they work for banks.

As a general rule, don’t listen to bank economists.