13 ms·

There are two bits of premise I think that are unfair in the article: 1) 'Economists don't know what is going on'. Yes, they do know what is 'going on'. They c

There are two bits of premise I think that are unfair in the article: 1) 'Economists don't know what is going on'. Yes, they do know what is 'going on'. They can measure it, and tell you. The sneaky assumption in the question is the assumption that if "they knew what was gong on, then they would know how to solve it" This is totally unfair. Jobs and the economy were never entirely managed through centralized economic policy. Unless you are a country that is 'way behind others that are good examples to follow' - in which case you can make no-brainer investments in 'roads' and 'electricity' ... it's otherwise not possible. No 'economist' would have ever thought 'we need a good search engine' or 'someone needs to re-jigger electric cars to make them work in our economy' etc. etc.. It takes entrepreneurs of various sorts - mostly of the 'boring' kind (carpenters, contractors, restaurant owners, parts manufacturers) etc. to form the basis of the economy. It's not and never will be managed by economists. 2) The failure of 2008 was not predicted by economists ergo their discipline is bunk. This is not fair either. 100% of economists would have predicted the outcome if they knew the vast scope of homeowners lying on their applications, that banks were misleading others by packaging crap loans as good ones, that the ratings agencies were not doing their jobs and actually rating the loans properly. Economists depend on 'valid data' in their understanding of the world. Were the data in 2008 to have been valid, predicting the outcome would have been trivial. You could argue that Economists might need a different approach, i.e. to be more 'in the field' doing their own measurements - sure. But their models were not wrong, their data was.

woodandsteel 10y ago
>This is not fair either. 100% of economists would have predicted the outcome if they knew the vast scope of homeowners lying on their applications, that banks were misleading others by packaging crap loans as good ones, that the ratings agencies were not doing their jobs and actually rating the loans properly. It was very widely reported at the time that banks had drastically lowered their standards for loans, and that this had lead to a boom in housing prices. And all this was publicaly defended by conservative politicians and commentators. And it takes only a little thought to figure out the banks were misleading investors, and the bond rating agencies were helping them out. The reason the economists didn't figure it out is they lack the needed common sense.

woodandsteel 10y ago

>This is not fair either. 100% of economists would have predicted the outcome if they knew the vast scope of homeowners lying on their applications, that banks were misleading others by packaging crap loans as good ones, that the ratings agencies were not doing their jobs and actually rating the loans properly. It was very widely reported at the time that banks had drastically lowered their standards for loans, and that this had lead to a boom in housing prices. And all this was publicaly defended by conservative politicians and commentators. And it takes only a little thought to figure out the banks were misleading investors, and the bond rating agencies were helping them out. The reason the economists didn't figure it out is they lack the needed common sense.