I am confused by part of this. Under "Most Grant Applications are Bad," the primary piece of evidence for that assertion is that only about 25% of grant applications get funded, therefore 75% are bad. That could be because the government splits its pool of money among all the "good" ones, or it could be because there's only enough money to fund 25% of the projects. If the government decided to double its budget for psych research, would it then appear that only 50% of grant proposals are bad?
Furthermore, we should expect grants to go to those projects that show the most promise for publishing. "Publishable" does not mean "good," and publication bias is one of the biggest pathologies of modern science. This is a lousy metric.
Came across this article, published in 1991 but hardly dated:
David T. Lykken, What's Wrong With Psychology, Anyway? (PDF, 39 pages)
Anyone who's interested in psychology as a science might, I think, find it fascinating. Lots of stuff there about rationality-related failures of academic psychology. Several wonderful anecdotes, of which I'll quote one in full that had me laughing out loud --
(I came across the reference to the article in the HN discussion about a project, of independent interest, to try and replicate a sample of articles from three reputable journals in psychology in a given year)