Economists

[Imperator Romani]

They didn't predict the worst depression since the 1930's, and they can't agree on what to do now. So what good are they?

[Alsatian]

They're there to make money

[roy34543]

Nice graphs.

More seriously, theyre for general macro-economic advice and for predicting general trends as opposed to market fluctuations, theyre not a crystal ball but they can tell you what 90% of the time is a bad economic decision (Ie, Printing money until the economy hyperinflates) and what is a good economic decision (Free trade)

[JP226]

The recession has been predicted since about 2002. It's just every time a down turn was forecasted the economy and markets kept going up. Until finally in between a forecasts the economy dropped to levels not seen in ten years. Predicting swings is difficult, but IF the market and economy stay on a trend, the volatility in large part can be predicted fairly accurately ina relatively short time frame no more than a year.

[Claudius Gothicus]

As JP said the economy breakdown was being predicted for almost 6 years when it happened, my father(an economist) had been collecting newspaper articles relating to the baking bubble for many months before people even started to think about it.

[chilon]

If not explicitly 'predicted', Thorstein Veblen certainly foreshadowed the Depression.

And some such as Nouriel Roubini most certainly have been mentioning the probability of a crash if not "Predicting" precise information, others have been betting on it happening as well..

[bushbush]

economics is one big tough subject to study because it involves in so many players and so much variables. What economists do is to try to simplify them into models and understand our economy and perhaps make policy based on such understanding. But there will always be new developments that the previous models can't include; crisis like this becomes great lessons in economic studies that help us to further understand our world. It might be a never ending quest.

[GrnEyedDvl]

They didn't predict the worst depression since the 1930's, and they can't agree on what to do now. So what good are they?

Of course it was predicted, by MANY people. But everyone wanted to give Clinton credit for a "recession proof" economy and anyone that said something differently was accused of trying to talk the economy down.

Here is an article from 1999 in the NY Times...

[Viking Prince]

Economists do not predict timing points, but results of processes. Just as nobody predicts market timing with precision, nobody predicts when crashes occur or when recoveries begin. Do not confuse predicting the course of events with predicting precise timing.

Just because the news media like to report surveys of economists expecting a turnaround within a quarter, does not mean any single economist would state an explicit statement that such a turnaround would take place. This is why they use words such as forecast, predicted, expected, etc.

[Enemy of the State]

I believe Friedrich Hayek, Ludwig Von Mises and many other Austrian school economists predicted the Great Depression. Sadly, the Austrian school has fallen out of mainstream economics. Nobody listens to them anymore. It predicted this depression too.

[Yuiis]

There's a saying that goes something like: "Economists only predict things when they've already happened". And its generally true...the amount of resources put into trying to forecast economic changes is shown to be futile almost always. Its very hard/impossible to find a mathematical model that describes something so abstract and relative as human conduct. (Which in the end, is what economy is about)

[BNS]

I believe Friedrich Hayek, Ludwig Von Mises and many other Austrian school economists predicted the Great Depression. Sadly, the Austrian school has fallen out of mainstream economics. Nobody listens to them anymore. It predicted this depression too.

Yes, the people following the paradigm set by there school of economics had seen this coming for a while now, not only that they provide the most complete and satisfying answer to why and how to go about recovering. However don't give up hope their influence is growing and already this can be seen in the way that popular academia is starting to have a new look at the Great depression and past recessions. Lets not forget the man of the hour Peter Schiff...

Ron Paul predicted exactly what would happen in 2003. Nobody listened to him, unfortunately. And now they're acting like capitalism is to blame.

It's that timeless and proven easy scapegoat. Of coarse government officials will try to push the blame from themselves, the most dangerous enemy to their power is capitalism.

[Aldgarkalaughskel]

They predict economic crises and economic booms all the time, it's their job, like astrologers predict your future. Sometimes they're right and sometimes they're false. Who deems to be right afterwards, is celebrated as a pundit laureate, the winner of the bidding competition. It's like bidding with shares in the stock exchange.

[Enemy of the State]

Ron Paul predicted exactly what would happen in 2003. Nobody listened to him, unfortunately. And now they're acting like capitalism is to blame.

Joe Scarborough: — on September 10th, 2003. In fact, I’ve reprinted the whole thing in my book. I want Americans who hear leaders saying everyday, “We could not have seen this coming. This was a shock. How did this happen?”
I want to read what you said five years before the collapse.

“The special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital that they could not attract under pure market conditions. Like all artificially created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing,”

Mika Brzezinski: Oh, my God.
Joe Scarborough: — and you go to say because so many people will invest in housing, “the damage will be catastrophic.” Congressman, how could it be that you knew this and told the banking committee in 2003 and nobody else did until after the collapse?

[Yuiis]

Well just like I can predict that this crisis will eventually be over. And after this economy will rise again. And after that rise it will go down again. Why doesn't anyone listen to me!?

[Enemy of the State]

Well just like I can predict that this crisis will eventually be over. And after this economy will rise again. And after that rise it will go down again. Why doesn't anyone listen to me!?

It's not that simple.

[Yuiis]

It's not that simple.

To a certain point it really is, believe me. Just look at stock market forecasters. They predict this and that, one year one gets his prediction right, gets his portfolio to win millions, gets interviews, prizes etc. and the next year his predictions stumble down into severe losses. Its similar with the real economy. Of course there are indicators that can show us more or less what the general trend will be...but its impossible to be able to forecast an opward or downward movement in a certain moment of time correctly...and if it is done, it is purely by chance. You can get "close" to correctly predicting what human conduct will be, but you will never ever be 100% sure. That fact just makes predictions very random to a point. Because trends observed in the past dont have influence in trends observed in the future. We live in quite a random and constantly changing world. Economy is no exception.

[Каие]

Peter Lilly predicted it back in 1997.
http://www.publications.parliament.u...t/71111-10.htm

[JayHawk357]

Because economists are epic failures. All their neat and tiddy theories never take into consideration uncertainty and transaction costs that ultimately lead to exploitation and the collapse of a market.

Many also do not understand the nature of business cycles in general. You hear the support for theories such as real variables shocking the economy, or the laughable animal spirit and the horrible gold standard garbage. What you don't hear much about is the profit squeeze theory or marxian version of events. When economies get going, business operations expand to compete and as they expand things like equipment and labor cost more. The more workers you hire, the more you have to pay at an increasing rate. Businesses begin to lose their eagerness for profits as their large slice becomes smaller and smaller until they just don't have it in them anymore to fight. Growth stops and the economy slows workers are laid off and their price per head decreases while their nice slice of profits gets immensely larger.

[Viking Prince]

Because some economists are epic failures. All their neat and tiddy theories never take into consideration uncertainty and transaction costs that ultimately lead to exploitation and the collapse of a market.

Many also do not Most understand the nature of business cycles in general. You hear the support for theories such as real variables shocking the economy, or the laughable animal spirit and the horrible gold standard garbage. What you don't hear much about is the profit squeeze theory [What???] or marxian version of events. When economies get going, business operations expand to compete and as they expand things like equipment and labor cost more. The more workers you hire, the more you have to pay at an increasing rate. Businesses begin to lose their eagerness for profits as their large slice becomes smaller and smaller until they just don't have it in them anymore to fight. Then the economy reaches an equilibrium unless there is another shock to the system. Growth stops and the economy slows workers are laid off and their price per head decreases while their nice slice of profits gets immensely larger.

I thought this would clear up my disagreement with some of the post.