Go jump off a supply curve!

The new issue of BusinessWeek has a feature story: What Good Are Economists Anyway.

Economists mostly failed to predict the worst economic crisis since the 1930s. Now they can't agree how to solve it. People are starting to wonder: What good are economists anyway? A commenter on a housing blog wrote recently that economists did a worse job of forecasting the housing market than either his father, who has no formal education, or his mother, who got up to second grade. "If you are an economist and did not see this coming, you should seriously reconsider the value of your education and maybe do something with a tangible value to society, like picking vegetables," he wrote on patrick.net.

Take that, you pointy-headed failures! Go jump off a supply curve!

Of course predicting the future is always difficult, especially when it involves human behavior. To be fair, there were economists who spoke frequently about the unsustainable increase in housing values - the word bubble was used frequently. While no one really saw the extent to which the toxic mortgages would plug up the financial system, there were voices of concern about lending practices and the savings rate of individuals. As for the disagreements among economists, macroeconomics is a still developing field and the models have been refined dramatically since The Great Depression when it started to evolve out of microeconomics. I suspect that the next decade will see another stage in the evolution as this recession again refines the models.