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A Nobel Prize Winner Views the Bailouts

Professor Ferdinand E. Banks
ferdinand.banks@telia.com
December 11th, 2008

This Sunday, as I settled down again to enjoy the film ‘From Here to Eternity’, which I make a point of enjoying every December 7th, because it reminds me of a wonderful 5 year vacation in the American army, Professor Paul Krugman of Princeton University – this year’s Nobel laureate – was informing a group of people at the Royal Academy of Science (in Stockholm) that the US automobile industry was a lost cause, and bailout or no bailout might soon be history.

On the other hand, he was positive toward the recently announced Swedish ‘stimulus’ package, which he thought might save the Swedish auto industry. That was news to me, because if there is a more confused possé of bunglers between Lapland and the Capetown naval yard than the present Swedish government, I’ve never heard of them. For instance, the present minister of industry wants to increase the number of windmills in this country from 900 to 6000, which presumably would make it easier to massacre the remainder of the Swedish nuclear sector. Like the previous prime minister, she believes that nuclear is “obsolete” and wind is the wave of the future. As bad luck would have it, this is the opposite of the truth for this country.

Needless to say, it is always possible to raise some question as to who should receive a Nobel prize and who should not. I think that it is my duty to reveal however that certain persons who should have received a prize were not honored because their chemistry failed them when they encountered influential and/or distinguished members of the Nobel Academy, and I am not just thinking about economics. For instance, a stink is currently being raised about the selection of the Nobel prize in medicine.

Last year three scholars were awarded a prize in economics for work that is of absolutely no value to anyone, anywhere, except possibly the members of the Academy who someday might be wined and dined in the US for their generosity. Professor Krugman certainly has more to offer than those three ‘scientists’, but in the course of his talk at the Academy of Science he admitted that he knows little or nothing about the industry that he thought should be banished from the Republic, and surprisingly the same was true about a number of other topics. Hmm. While it is undoubtedly the case that there are a number of activities in the United States that should be located somewhere else in the world or – to use a suggestion of the Nobel laureate John Nash about nuclear waste – dispatched to Venus or Mars in a sophisticated rocket, some question must be raised as to the effect on the US economy if the automobile industry was one of them.

The first thing I asked upon hearing the name of this year’s laureate had to do with why he was the only recipient of an economics prize. I can easily think of economists who are more productive and whose pedagogical work is on a far higher level than that gentleman. Well, the answer here is that just as Sweden is filled with politicians and civil servants who would sell this country in return for a plane ticket to any romantic or prominent locale, the same is – and has always been – true of the economics section of the Nobel Academy. It would have been a simple matter to given the much more deserving Professors _____ and _____ a prize at the same time as Krugman, but unfortunately they do not have the same ‘juice’ in the corridors and restaurants of academic power as this year’s laureate.

A well known professor of physics and Nobel laureate once suggested that the economics recipients of the prize should not be allowed to sit with the other laureates when the prizes were passed out, because as far as he was concerned, economics was not a an authentic science. Moreover, as is well known in this country, apartheid of this kind would have met the full approval of Professor Gunnar Myrdal, himself a Nobel laureate, who almost made a ‘scene’ at the Nobel banquet when he received the accolade, and once informed a seminar in development economics that academic economics might someday degenerate to a condition where it wasn’t much of anything, and in times of stress and doubt its practitioners would specialize in making fools of themselves.

Professor Ferdinand E. Banks
December 11th, 2008
ferdinand.banks@telia.com