I am not really sure what he means by that – but I have tried to describe what I think is the methodological hard core of economics (very little – although a useful little) and state that the problem Frog has surrounds subjective value-judgments made by economists. My best answer to that is simply: At least using a clear economic method makes our value judgments transparent – so that they can be criticised easily.

Agnitio that was brilliant 🙂

Kimble’s statement was also awesome 😉

“Rather than blame economic methodology for the current state of the world economy, I think that it is pretty clear that what we are seeing is the result of a series of pretty bad failures of governments.”

No doubt – however, the economics discipline did not foreesee the crisis. If we believe that such prediction is the role of economics (as economists have sold themselves to be on many occasions) then in some sense it does constitute a failing of the practice of economics.

“There is another basic rule of economics that they forgot: “incentives matter”.”

I believe that is capture by the existence of preferences and the fact that behaviour occurs at the margin 🙂

LOL!

As Eamonn Butler of the Adam Smith Institute put it:

“This crisis was not caused by capitalism being fatally flawed. It was caused by politicians forcing banks to give out bad loans, monetary authorities flooding the West with cheap credit and regulators being asleep at the wheel.
…

“When the government is persuading the casino to hand out free chips and the regulators are standing drinks at the bar, you shouldn’t be surprised if the customers place a few risky bets.

“It’s the management and not the system that deserves our scorn for breaking the basic rules of economics: There is no such thing as a free lunch.”

There is another basic rule of economics that they forgot: “incentives matter”.

Note I am asking myself this question – as it needs an answer