The boards are lighting up with consternation at the notion that Lawrence Summers might be rewarded for his vital role in triggering the 2008 financial crisis by being given the chairmanship of the Federal Reserve. Summers is reportedly lobbying hard for the job, along with many of his powerful Washington friends. (He has a lot of those.) There have been no denials from the White House, which may be treating these stories as a trial balloon—and a test of our national economic amnesia.

Larry Summers at the Fed? It sounds like madness—and it is. Summers epitomizes the old, misguided model of the economist as Washington power player and Wall Street money maker, ever willing to retrofit theories, assumptions and models to benefit those they serve.

This behavior doesn’t even have to be deliberate and cynical. Robert Johnson of the Institute for New Economic Thinking, a group which is dedicated to creating new and more effective economic paradigms, told AlterNet he believes economists in this mold internalize their beliefs and are sincere when they express them.

Cynical or not—and there are probably plenty of people in both camps—the economics field is filled with people whose erroneous thinking and conflicts of interest have been rewarded with ascendancy to ever-higher positions. In fact, if recent history is any example, moral probity and clear-headed analysis are obstacles to advancement.

Sound harsh? Here are five examples of financial forecasting failure as a career-enhancing technique.

1. Lawrence Summers. Economist Dean Baker has the lowdown on Summers. Bill Clinton’s former Treasury Secretary is well-known in economic circles for such accomplishments as his brutal hectoring of Brooksley Born over her prophetic warnings about mortgages, and his open mockery of IMF chief economist Raghuram Rajan financial reform as a “Luddite” because Rajan was—oh, what’s that word again?—oh, yes: correct.

That story is instructive. At a 2005 conference, Rajan dared to question the “financial innovation” which Summers and his crowd had both celebrated and made possible under Bill Clinton. Rajan suggested that the proliferation of risky instruments like mortgage-backed securities, together with the perverse incentives built into banker bonuses, could lead to a “full-blown financial crisis” and a “catastrophic meltdown.”

In response, Summers stood up in the audience and launched a tirade against Rajan. Summers argued strongly against increased regulation, claiming it would decrease Wall Street’s “productivity.

Rajan, was absolutely right, as we now know, while Summers was wrong. And he wasn’t just wrong as in “he made a bad call” wrong. He was wrong as in “He fought aggressively to deregulate Wall Street, ran roughshod over anyone who raised legitimate concerns, bullied anyone who tried to prevent the tragic events of 2008, took big fees from banking firms, and was nastily and abusively wrong, over and over and over.”

Larry Summers was that kind of wrong. Now he’s seriously being discussed as head of the Federal Reserve. Not to put too fine a point on it, but this country seems to have completely lost its mind.

In lobbying for this job, Summers and his allies are trying to elbow out the highly qualified Janet Yellen for the position. She has a much better track record, and would be the first woman to lead the Fed.

Sure, Summers has said the right things about job creation lately. Now we know why: he’s angling for a new gig. But he’s still the wrong person or the job. He’s demonstrated a propensity for spectacularly aggressive erroneousness. He’s made millions from the bankers he’d supposedly be regulating. (As the Washington Post reported in 2009, in a single year Summers made $5.2 million in fees from a hedge fund and $2.7 in Wall Street speaking fees.) And, as Baker points out, he’d be displacing a highly talented woman who would be perfect for the job.

2. Tim Geithner. We all remember Geithner’s tenure as Treasury Secretary. He ignored repeated warnings about unemployment, and as a result he presided over the longest and deepest jobs depression in many decades. His stewardship of the TARP bailout program was so lax that, as the US Inspector General reported, bankers were allowed to receive bonuses so large they were apparently illegal.

And who could forget his lordly pronouncements of Wall Street innocence, even as his own staff was hurriedly cutting deals to immunize bankers from criminal prosecution for their widespread fraud?

The long-term unemployed and impoverished Americans, whose numbers remain at record highs after four years of Secretary Geithner, need no help remembering his failure to revive the economy while in a position of power. Nor do the homeowners who were cruelly manipulated by fraudulent “extend and pretend” programs, thanks to Geithner’s HAMP program, which allowed banks to “pretend” they would modify a homeowner’s mortgage so they could collect payments for another year or two – that’s the “extend” part – before foreclosing on them anyway.

That process included numerous examples of bank fraud, both toward homeowners and local authorities, which was committed to permit bank foreclosures. Although that eventually led to a $25 billion fraud settlement, no bankers were indicted – or even lost their jobs—during the Geithner years or since.

But to understand how economics rewards the mistaken we need to go further back in history, to the time before Geithner became Secretary of the Treasury. Before taking that position, Geithner was head of the New York Federal Reserve Bank. Since Wall Street was in his region, that made Geithner the second-most important official in the entire Fed. How was his record there?

For starters, recent reports showed that Geithner was aware of the LIBOR scandal, in which bankers manipulated critical figures in order to rook borrowers such as municipalities, all the way back at the end of 2007. Banks routinely the figures they provided to the agency which uses them to set interbank lending rates, which affects roughly $350 trillion in derivatives. These numbers influence municipal bond rates, among many other things, costing cities as much as $6 billion.

As finance professor Andrew Lo said, “This dwarfs by orders of magnitude any financial scam in the history of markets.” And yet when he learned of it, Geither did nothing more than send the agency a letter with some recommendations—a letter which had been written, not by his Fed staff, but by the banks themselves. There’s no sign he followed up while he was Secretary of the Treasury. He certainly never told the American people about it.

Geithner’s role at the New York Fed makes his inaction on mortgage fraud especially inexcusable. William K. Black Jr. has documented the overwhelming mass of warnings provided to the Fed, which included:

A petition signed by 11,000 honest appraisers which warned the Fed that lenders were “blacklisting honest appraisers” and sending business to ones that would give them the inflated valuations they wanted;

Public warnings from the FBI, back in 2004, that an “epidemic” of mortgage fraud was underway and could create a financial “crisis.” (The cop on the beat was a better economic forecaster than either Summers or Geithner.)

Statements from state prosecutors warning of fraud.

Other warnings came from trade groups, borrower representatives and from within the mortgage industry itself. But then, anyone who understands basic finance should have seen that fraud was being lavishly rewarded and honesty was being financially punished.

Our future Treasury Secretary didn’t see it coming. From a Federal Reserve meeting transcript dated January 2007: “How strong does the economy look outside autos and housing? Pretty strong, it seems. We see no troubling signs of weakness …”

3. Alan Simpson; and 4. Erskine Bowles. They’re funded by anti-government billionaire Pete Peterson. They were made co-chairs of President Obama’s “Deficit Commission.” And they’re repeatedly, remarkably wrong. They also very right-wing, according to the polls, which consistently show that their proposed government cuts are too extreme for many Republicans and are widely disliked by the public at large. And yet, in the distorted worldview of Washington and the major media, they’re repeatedly presented as “moderate” or “centrist.”

They’re also presented as economic experts—despite their penchant for wildly inaccurate predictions.

Alan Simpson is a former Republican senator from Wyoming. Erskine Bowles is a former Clinton White House apparatchik and hedge fund millionaire from Morgan Stanley. Two years ago, in June 2011, they made a bold prediction: The United States will experience another terrible economic crisis—"the most predictable economic crisis in history"—if people don’t listen to them and radically cut government spending.

How was this disaster going to happen? It will come, they said, when “the ratings agencies find out we have no plan” to cut spending.

It’s July 2013. Their two years are up. There was no “crisis.” There’s terrible ongoing hardship, but there’s increasing consensus (even Larry Summers is on board) that the primary source of this continued difficulty is the spending reductions advocated by Bowles and Simpson.

Of course, the Terrible Two have suffered no career consequences for this or any other failed prediction they have made. They’re still quoted worshipfully in many newspapers, are seen frequently on television, and are treated as if they were people who understood economics.

This isn’t Bowles’ first rodeo, or his only one. He’s been serving on a lot of corporate boards, where a director’s guidance is instrumental to the success of the firm. Dean Baker co-authored an analysis of his work in that field, finding that “the Erskine Bowles index considerably underperformed the S&P 500 over this period”:

In boardroom life, unlike real life, there is no penalty for failure. Mr. Bowles was handsomely compensated for his board work, just as he is warmly recognized for the probity which led him to predict that a new and massive debt-caused crisis would shatter our nation by sometime last month.

5. Rick Santelli. Government officials aren’t the only ones who can get their predictions spectacularly wrong and be rewarded for it. Tea Party hero Rick Santelli, who prognosticates on the economy for CNBC, has shown that economic ineptitude can be privatized.

Santelli screamed for years (literally, as this clip demonstrates) about government stimulus spending, an anti-recessionary technique that has worked reliably over and over during economic times like these. “Stop spending!” Santelli shrieked.

Europe “stopped spending”—or at least slashed its spending—and the resulting austerity budgets have caused GDPs to collapse and unemployment to soar all across the continent. The United States did the same thing. The result? Our GDP also took a hit, while our unemployment figures linger somewhere between quasi-depressionary and catastrophic for large swathes of the population.

And yet Santelli’s visibility actually went up over this period. Why? Because Santelli also went into a hysterical fit on the floor of the Chicago Mercantile Exchange. He was furious at the idea that homeowners, who had been victimized by crooked bankers, might get some help deal with underwater mortgages, while expressing no such outrage about the hundreds of billions in aid given to Wall Street banks; aid that benefited both Santelli and his irate audience of traders. Santelli used the felicitous phrase “Tea Party,” and a movement had a new name.

We almost wrote “and a movement was born,” but the Tea Party was actually born in corporate boardrooms, and in meetings with Republican party functionaries like Dick Armey. Santelli merely stumbled on a phrase. Despite his cockeyed predictions, his visibility went into overdrive—and a thousand silly hats were born.

Santelli’s not above a fib or two, if that’s what it takes to hide his poor track record. In another bad Santelli prediction, he said the Fed’s moves in 2009 would be extremely inflationary. They weren’t. Santelli’s response? “I never said it was about inflation,” he claimed recently. But Business Insider reviewed the recording in which Santelli said, quote, “of course it’s about inflation.”

Whoops. Professor Krugman bemoaned the inflationistas for what he calls their “stunning lack of menschlichkeit.” That’s a Yiddish way of saying “what a bunch of jerks.”

Santelli and his mean-spirited friends on that Chicago floor screamed at homeowners, “Losers! Losers! Losers!” They might have been talking about the success rate of predictions made by Santelli and his ilk.

Conclusion: How to Succeed in Economics by … er, Totally Not Succeeding

This is, by necessity, only a partial list. Space limitations prevent us from recognizing all those who are qualified for recognition in this category. But honorable mentions go to Alan Greenspan, Bill Clinton, Robert Rubin, the editorial board of the Wall Street Journal, the editorial board of the Washington Post, your tipsy uncle at last Thanksgiving dinner, and all the fine folks who worked in risk management on Wall Street without noticing that something was seriously, seriously wrong.

Some risk managers did notice, and warned their bosses, only to see their careers stall accordingly. This is dedicated to you, the unsung heroes of finance, and to the many economists who continue to make sound predictions, regardless of the price they pay for it.

But we’re not just here to complain, are we? What must we do to change the culture of the financial and economic professions? That’s a vital and urgent mission, and it’s good to know that people are working on it in brilliant and imaginative ways.

So thank you, Institute for New Economic Thinking, for your tireless and high-minded work on improving the nature and quality of the economics profession. We hope that more of us can join you on the high road, and soon. After all, criticism of others only offers a starting point. Building new and more effective models is the real and important work of the future.