Barbarian Capital's Academia Drive-By Shooting

One of my fave new bloggers, Barbarian Capital, addresses a very timely issue amidst our current (and seemingly everlasting) economic uncertainty – the unwarranted deference accorded the Academics.

Writing at the Davian Letter, the Barbarian lays out 4 reasons why this blind faith is dangerous, here’s one of them:

 Lack of real-world experience: most academics are what The Governator once called “people who only sign checks on the back” They’ve never had to make payroll or rent. They’ve never made a sales call. They’ve never fired someone with a newborn. Most, I think, do not realize that their “success” comes from the structured, cuddly world of academia where the rules and relationships are not only clear, but also predictable. Those of us operating in the real world do not have that luxury, and yet, somehow the “distinguished John Q. Public professor of Economics” gets more airtime, more respect and more job security than the guy down the street trying to run a business. Makes no sense whatsoever.

Actually, often our “acclaimed” economists are business disasters: look at the imploded housing market ETFs from Shiller, or the Nobel winners at LTCM. Only academics can come up with theories based on a world with no taxes, or on efficient markets everywhere, or run a super-leveraged fund based on everything going right at all times. The reason why such absurdities exist is because there is no real clash of ideas in the Ivory Tower: they are all in the same boat, and pad each other on the back. For us, having the wrong idea hurts only the way a short squeeze or a big drop on volume can hurt.

Get on over to read the rest…

Source:

Why Are Academics Dangerous (Davian Letter)

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