Bury the Dead....

Free Market Economics

Efficient Market Theory

Self Regulation

No Government Intervention

These were the theories from the likes of Milton Friedman and Eugene Fama, both were Professors at the University Of Chicago Business School.

Friedman who won the Nobel Fraud Prize for Economics in 1976 died in 2006, just before (Coincidentally) the credit crisis unfolded. Fama also achieved numerous Economic and Financial Prizes, thank god he was sparred the Nobel.

The Chicago Business School which housed and spread these theories indirectly bares the brunt for the pain the global credit/financial system has gone through. The business schools hands off approach and principles have infested financial thinking and shaped global markets across the board. There laissez-faire attitude underpins the root cause of all that was corruptible.

The U.S. Government as well as many central banks around the globe from the 1970's till today were totally brainwashed with these theories.

What we have seen over the last 2 years or so having lived through the credit crisis is that all of the ideas of these so called economic genius were totally flawed because they were based on human beings acting ethically.

Strangely enough, back in October 2008 a group of students and professors debated a $200 million research center named after Milton Friedman. They argued that naming the center after Friedman would only encourage the flawed economic policies that have brought global economies to near collapse. They also argued that Friedman's platonic ideas only encouraged greed and unethical behavior. The kicker to all of this is Friedman's ideas entail countermeasures to government intervention and nationalization. All of which have happened in triplicate! Basically Friedman's ideas were based on a Systemic Orgy of Economic Greed.

The Chicago Business School along with Friedman led the intellectual groundwork and foundation for the absurd idea that markets self regulate and thus self adjust, and that government should do nothing.

This ideology has run its course, as the inability of Friedman's successors and followers to say anything to defend their theories, and thus don't have anything to say that is useful to explain what has happened to the financial markets today.

In short their influence is over.

Instead, more and more policy makers are rediscovering the theories of John Maynard Keynes and John Kenneth Gailbraith. Gailbraith himself noted before his death in 2006, that he had "little use for mathematical models" as they are "Divorced from Reality".

Keynes noted that governments should spend to combat unemployment and lower economic output, exactly what central banks and governments are doing currently.

Wall Street as well as the markets put too much emphasis on quant models based on the flawed economic logic from the likes of Fischer Black, Myron Scholes, Eugene Fama, and Milton Friedman, many of these guys won Nobel Prizes for their flawed models. Fama's ideas fashioned and sanctioned the idea of limited government which paved the way to disaster. Fama's whole rhetoric was based on that human beings have no clue on how resources can be allocated, thus only markets can self adjust and allocate resources and repackage information and risk.

What we have seen is that deregulation and total outright self regulation left in the hands of flawed human beings will always lead the masses to slaughter.

Bury the dead.....They stink up the joint.