Jason Makansi | Author

At 53 years old, I'm heading back to school. Each Monday for the rest of the semester, I'll be driving from St. Louis to the University of Missouri, Columbia and back (a four-hour round-trip) to take a couple of graduate courses in Sociology. The Research Statements for my two classes are posted here:

> Making White Collar Crime Legal: Organizational and Sociological Structures that Protect and Enhance the Financial Elite

> The Sociology of Systemic Risk: A Study Combining Systems and Network Theory, Mathematical and Computer Models and an Analysis of Intermediaries in Transactions

Why am I going back to school now?

Because it appears that to be heard in this world, one needs academic credentials. The fact is that long before the pundits took to the airwaves declaring financial disaster, I was warning of impending doom. In speeches, presentations and in consultations to private clients (and to the dismay of friends enjoying a few drinks after dinner) I was unwavering in my belief that we were headed for disaster. After publishing two books on the electricity industry, I approached my publisher with a proposal for a book on the impending disaster and how it will affect the electricity industry. It was a great idea, I was told, but I needed to get a co-author--someone with a Ph.D. because I wasn't seen as a credible enough authority. Seems 30 years as a journalist/consultant following the energy industry just doesn't do it. So, I got frustrated, made contact with a few academics (people with the necessary Ph.D. credentials a guy like me--a lowly engineer with 30 years in the energy biz--lacked). Through these interesting and brave souls, I wrote my first "peer-reviewed, academic" paper (as opposed to the thousands of other articles, reports, interviews and presentations I've given over the years).

Here's an excerpt from that paper (published in the peer-reviewed journal Accountancy Business and the Public Interest (Vol. 8, No. 2, 2009, 115-138):

"The tools employed by the financial engineers to inflate value are being
uncovered and reported in the papers and web channels every day. Chief among them are the various complex financial models (variations of Capital Asset Pricing Models and the Black Scholes Options Pricing Model), the tools of the “quants,” which forecast, estimate, assign, but ultimately create value for their owners. There is ample evidence in the newspaper articles that these models are like all mathematical models—the results intimately depend on the initial assumptions, and the users of these models were ignoring basic inputs or assumptions that would lead to undesirable results....However, the more serious issue with quant models is not that they are used, but hat no standard or benchmark exists. That is, when no one can agree on what the value of a transaction is, no one will transact..... This is what is referred to as a “faith-based economy.”