Economists Bemoan the People

I once had a dealing with a company which became a flop. At the end, the CEO said to the investors, I fortunately was not one, "If only someone would buy the product, I could have made millions of them." The point being that the "dogs did not eat the dog food" but he was a great manufacturer. The end game is the acceptance by the consumer, the voter, the public.

The Tea Party as I see it from afar has rejected the "dog food" from the economists who have advised Washington. They use their own sense of what works and given that Romer and her ilk have made projections which have led us deeper into the hole, they say a pox on their house.

The problem is that the people have not understood the economists and the economists regard the public as below them. I come back to my engineer metaphor and the bridge, and well if the bridges kept collapsing I would suspect that the public would have a similar view of the engineer.

The Berkeley crowd now says:

It is now clear that the right-wing opponents to the Obama administration’s policies are not objecting to the use of fiscal measures to stabilize nominal spending. They are, instead, objecting to the very idea that government should try to serve a stabilizing macroeconomic role....

Yet America’s right wing objects to this, for reasons that largely remain mysterious: what, at the level of economic theory, is the objection to quantitative easing? Blather about Federal Reserve currency manipulation and excessive risk-taking is not worthy of an answer.

Still, here we are. The working classes can vote, economists understand and publicly discuss nominal income determination, and no influential group stands to benefit from a deeper and more prolonged depression. But the monetarist-Keynesian post-WWII near-consensus, which played such a huge part in making the 60 years from 1945-2005 the most successful period for the global economy ever, may unravel nonetheless.

Yet they bemoan what they cannot either explain, predict, or even have any way of explaining the validity of their theories. As the author of the piece bemoans some right wing conspiracy, as we have shown many times, if one listens to a group such as these macro economists time after time and their predictions are wrong then soon one learns to distrust them and trust ones visceral instinct. The failure of this group to see their own persistent shortcomings is the problem.

If a physician prescribed some remedy time after time and the patients died soon thereafter one soon would seek other advice. The same for the crowd of economists. They disagree, they fail to predict, and they then have the blatant arrogance of those whose advice should be honored because of who they are!