William K. Black, guest blogger (originally posted at New Economic Perspectives, Benziga, and the Dollars & Sense blog)
Portes as the poster child for the failure of econometrics and neoclassical dogma
Richard Portes is the economist that the U.K.’s neoclassical economists chose to be their representative. They consider him to represent the greatest strengths of neoclassical economists in general and econometricians in particular. “Econometricians” is a fancy term for economists whose specialty is statistics. Economics is unique in that one can receive exceptional honors from fellow-neoclassical economists for proving catastrophically wrong – repeatedly and causing immense human suffering. Wesley Marshall and I are doing a book that illustrates this point by focusing on Nobel Laureates in economics, and explains the underlying pathology that has so twisted the field. Portes has not been made a Laureate, but he is a global leader among neoclassical economists. Portes’ pronouncements on Iceland have proven so wrong, so often, that they serve a similar purpose in illustrating these crippling pathologies.
His infamous November 2007 ode to the soundness of the big three Icelandic banks was commissioned by Iceland’s Chamber of Commerce and it went on at length about Portes’ accomplishments. Here is a brief excerpt to give the reader a feel for tone.
“Professor Portes is a Fellow of the Econometric Society, a Fellow of the British Academy, a Fellow of the European Economic Association, and Secretary-General of the Royal Economic Society. He is Co-Chairman of the Board of Economic Policy. He is a member of the Group of Economic Policy Advisors for the President of the European Commission; of the Steering Committee of the Euro-50 Group; of the Bellagio Group on the International Economy; and Chair of the Collegio di Probiviri (Wise Men Committee) of MTS.”
Yes, they were so sexist that they had a “Wise Men Committee” in 2007, and Portes used that phrase to describe the group. The Committee, of course, proved to be an oxymoron composed of regular morons. The Queen named him a Commander of the British Empire (CBE) in 2003 then famously asked British economists why they had missed the developing crisis.