On Wednesday, February 6, economist Robert Johnson gave a talk in Shain Library’s Charles Chu Room to kick off a series of lectures organized by the economics department. Robert Johnson is currently the Executive Director of Economic Policy at the Institute for New Economic Thinking, a nonprofit think tank backed by American business magnate George Soros.
To list every position Dr. Johnson has ever held would be a long process, but he was most notably the Chief Economist on the U.S. Senate Banking Committee, also serving as Executive Producer of the Academy Award-winning documentary Taxi to the Dark Side. Before these successes, he received both a Ph.D and an M.A. in economics from Princeton University, as well as a B.S. in electrical engineering and economics from the Massachusetts Institute of Technology.
Johnson began the lecture by stating the question he would later explore: “How do we deal with our fears?” He argued his belief that economics revolves around emotion far more than most people care to realize, and that this social science “hides behind a wooden disguise, while it is actually a very emotionally linked science.”
Johnson would then go on to state his disagreement with how the financial meltdown of 2008 was handled, affirming that “the people who made the pollution did not pay for the cleanup.” This statement alluded to the fact that the banks who were to blame for the crisis were bailed out.
He would then say that economists could learn far more from history than what any model tells them. Johnson firmly believes that if the United States had just looked at the Austrian Banking Crisis of 1931, they would be in much better shape. He feels that the manner in which the banks were bailed out would cause a skeptical taxpayer to “trust the government less.” He stated that he believes the government’s, or any economist’s, overreliance on models as opposed to actual fact is what’s drilling a hole into the economy.
Johnson then took a step back and proclaimed that there are three corruptions in economics today: the Corruption by Commission, made by the sophists of the economic world who will say whatever is most profitable; the Corruption of Omission, perpetrated by those who refuse to express themselves out of fear; and the Corruption of Projection of False Certainty, those who create hypothetical models and claim stability that is not there.
To illustrate how uncertain the current state of economics is, Johnson drew allusion to the Horatio Algier myth, which states that if one simply works hard, one will have nothing to worry about. Johnson then confided in the audience that he saw some of the hardest-working men he knows lose their homes in the financial crisis.
Interestingly enough, but given his original question, very fitting, Johnson ended his talk with a Bob Marley quote: “It’s this love that I’m feeling.” He explained, “Make sure you are feeling love in every process that you are involved in.”
Johnson then opened the floor to questions. In one answer, he said he believes the Dodd-Frank Act was a real disappointment, feeling that “it turned into freedom for the regulators to trip up anyone in a lawsuit.” Another audience member wondered what Johnson thought was the one thing truly wrong with economics today, to which he replied, “A lack of empathy.” Johnson feels that a lack of empathy for economic growth with too much focus on individual growth has led the economy down a dark path. This statement comes to mind when one thinks of hedge fund managers yelling at their employees, “Sell it, it’s just a stock.”
Benedikt Immanuel ‘15 replied to this edict by saying, “But do you think too much empathy could lead to a lack of critical thinking in society?” This surprised and delighted Johnson, and he replied, “That’s a very good point, we’ll have a talk after.”
