The US economy: why it matters what sort of crisis we're in

[CHIMO]

In a country with almost 15 million people out of work, it is amazing that any economists still have jobs. This one is their fault first and foremost. Economists are supposed to know about the economy and provide advice on how to avoid disasters before they happen and help us recover from the bad things happen in spite of good advice.

The economics profession has not done well on this simple scorecard. Remarkably, rather than improve their game, economists are now busy dampening down expectations so that the public will not hold them responsible for the state of the economy.

Towards this end, a group of Fed economists recently put out a new study claiming that it was impossible for economists to recognise the $8tn housing bubble before it wrecked the economy. In effect, they argued that economists should not be blamed for this failure because:

"The state-of-the-art tools of economic science were not capable of predicting with any degree of certainty the collapse of US house prices that started in 2006."

This raises the obvious question: if economists can't see an $8tn housing bubble, what can they see? This is bit like the firehouse where everyone sits around calmly sipping their coffee as the school across the street burns down. Completely missing the largest financial bubble in the history of the world is pretty inexcusable, even if economists continue to make excuses.

http://www.guardian.co.uk/commentisfree/cifamerica/2010/sep/13/unemployment-economy-structural-cyclical

[Atman]

1. I'm not an economist, but I foretold of the housing collapse in 2006

Read my DU journals. I posted about this several times, as did many on DU. And the Repubs and the idiots and tea-baggers on our "parallel universe" sites called us fools for not believe George W. that everything was wonderful. But you know what? Those "economists" are rich mofos, and don't have a care in the world. Like a cabe-TV weatherman, they can say anything they want, and even if they're 100% wrong, they still have a job tomorrow.

.

[glitch]

2. Not all economists missed it, IMO the ones who did were paid to do so.

Indirectly or otherwise.

[PassingFair]

4. Upton Sinclair

"It is difficult to get a man to understand something, when his salary depends upon his not understanding it!"

[fasttense]

3. I like the logical way this guy writes.

"In the same vein, if employers can't find enough skilled workers, then we would expect them to have their existing workforce put in more hours. So, there should be sectors of the economy where average weekly hours are increasing. The evidence refuses to cooperate here also. The greatest increase in average hours over the last year has been in mining and logging and manufacturing, industries that are not typically thought to be centres of new economy skills. On the whole, average weekly hours are far below their pre-recession level...

In short, there really is no evidence for a problem of structural unemployment. The problem is that because of bad policy, we don't have enough demand in the economy. If there is any mismatch of jobs and skills, it is between economists' positions and the people who fill them."

Economists are like bank robbers blaming their theft on the bank's lack of security measures.