They're not purely rational actors, and economic theories don't connect sufficiently to the real world. Many economists are politicians with economic sense. If

They're not purely rational actors, and economic theories don't connect sufficiently to the real world. Many economists are politicians with economic sense. If you see things one way, progressive income tax is a jobs-creation program because as soon as you're disincented to earn more due to taxes, you leave opportunity available for someone else to earn something. If you see things another way, it is a grab by the unworthy on your hard-earned wins. (Thank you N Gregory Mankiw for clarifying this a number of years back.) They also live in the same bubbles. The real estate bubble of 2001-2008 was super clear if you didn't spend your time in it. But since they can't or don't look at enough details (fraud in the CDO's, total outstanding credit default swaps, who is exposed to who) and they don't understand or model human factors such as criminality and deviousness, they can't do a very good job.