First, the University of Chicago decided to create the Milton Friedman Institute.
Now, New York University has decided to create the Alan Greenspan Chair in Economics, in return for a $20 million gift. And it gets even better: the gift is from, of all people, John Paulson!
Each university has chosen to honor one of the winners of the Dynamite Prize in Economics, for those economists voted most responsible for causing the global financial crisis.
Alan Greenspan (5,061 votes): As Chairman of the Federal Reserve System from 1987 to 2006, Alan Greenspan both led the over expansion of money and credit that created the bubble that burst and aggressively promoted the view that financial markets are naturally efficient and in no need of regulation.
Milton Friedman (3,349 votes): Friedman propagated the delusion, through his misunderstanding of the scientific method, that an economy can be accurately modeled using counterfactual propositions about its nature. This, together with his simplistic model of money, encouraged the development of fantasy-based theories of economics and finance that facilitated the Global Financial Collapse.
That just leaves Larry Summers, who won third place for the prize.
Larry Summers (3,023 votes): As US Secretary of the Treasury (formerly an economist at Harvard and the World Bank), Summers worked successfully for the repeal of the Glass-Steagall Act, which since the Great Crash of 1929 had kept deposit banking separate from casino banking. He also helped Greenspan and Wall Street torpedo efforts to regulate derivatives.
It can’t be long before he receives his institute or endowed chair, probably at Harvard. . .
