Robert Waldmann winds up and asks a question: Hoisted from Comments:
Grasping Reality: Fama's Fallacy V: Are There Ever Any Wrong Answers in Economics?: "Economic science" is a phrase like "military intelligence." Out of respect for my fellow economists and the DIA I won't name that class of phrases. However, "economic theory" is a sub branch of mathematics. Within economic theory there are defintely false statements such as those made by Mankiw and Fama.
I'm not surprised that Fama is making a fool of himself. He has made similarly nonsensical arguments in his own field of expertise. He has been a tenured head of a school of thought for a long time, and has probably forgotten what it was like to make arguments which weren't accorded respect just because he made them.
I don't know what Mankiw thinks he's doing. For one thing, he knows you and cannot hope that you will let the matter drop. I can only infer that he knows much more about the sociology of economists than I do and understands that, to be a mainstream economist in good standing, he has to take a hit for the team and claim not to have noticed Fama's howler.
To me the odd thing is the extent to which the economics profession can hide our embarrassing secrets. Not wanting to get Harvard graduates in trouble, I'd be inclined to take a poll of the general public to find out how many people understand that Nobel prizes have been awarded for working out detailed implications of the efficient markets hypothesis, for stating the rational expectations hypothesis (and not to Cournot or even Nash but to Lucas and if you doubt it check the citation) or uhm to Ed Prescott.
Sauce for the goose is sauce for the gander, and, I note, that you claimed on this blog to think it was reasonable to award the Noble prize to Prescott and elsewhere described an argument which basically quoted something written under his name as failing the Turing test.
If I understand your argument, it is one I cannot refute. Yes, the Nobel Prize winners are the public authoritative face of our profession. So, yes, I think I have to change my mind--and concur with you that the Swedish Academy needs to pick Nobel Prize winners who are now wise as well as who once were very, very clever.