In this interview with Eugene Fama, one of the Chicago School pioneer of the efficient markets theory, you can see an excellent example of how people can become so wedded to a theory that it distorts their view of the world. Everything is seen through the prism of the theory and the viewer is apparently oblivious to the distortions that result. Fama insists that a collapse on house prices did bot trigger a recession. Rather the collapse must have been triggered by a recession that predates the housing collapse. How so we know this despite the fact that there is no evidence for it? Easy. The theory says is must be so. Forget evidence to the contrary, the theory must be right! http://www.newyorker.com/online/blogs/johncassidy/2010/01/interview-with-euge...

Sent from my iPhone