Krugman: How Did Economists Get It So Wrong?

New York Times:

It's hard to believe now, but not long ago economists were congratulating themselves over the success of their field. Those successes -- or so they believed -- were both theoretical and practical, leading to a golden era for the profession.

Read the whole story: New York Times

Comments

[tweedledeedumb]

I was talking with the editor of a high end book of economic theory from the proffessors at MIT onc, and after reading part of this book, I had some simple questions about variables I saw as important that were not spoken of at all. I was laughed off as a none expert. Many of my questions have been answered in the last year...they really don't know what they are talking about. They only talk to other economists, building theory like the emperor's clothing. It's all crap...none these guys has a "lick of horse sense" as my father would say...either that or they are well paid camouflagers. I think they are all just makeing new sounding crap up because of publish or perish.

[Bruce Fenton]

Odd that people criticize U Chicago/ Friedman -- do you think that this is free market economics gone bad? This is a hybrid mix of the worst of socialism and capitalism -- when did Adam Smith or Freidman talk about bailouts?

[research]

deregulation caused the crash. Get over it.

[KEYNES]

the blog http://macromouse.blogspot.com writesabout Paul Davidson's new book THE KEYNES SOLUTION: THE PATH TO GLOBAL ECONOMIC PROSPERITY as follows:



America’s seminal economist, Dr. Paul Davidson, has written the clearest vision of money and math mechanics, to date. Not since the 18th century’s true mathematical logicians, De Morgan, Jevons, Clifford, Peirce and Veblen, have scientific ideas of logic, money and math mechanics been laid so clearly . Mr. Davidson begins with a simple explanation of a true scientific method, then exposes the fallacies i of the classical economists’ and mathematicians’ mistakes, of economic model mis-applications and mis-interp­retations.

It’s taken America’s yet unrecognized genius, Paul Davidson, to exposes the unrecognized problems’ with ‘comparative advantage theory’, ‘free-trade theory’, ‘efficient market theory’, ‘the incompatibility theory of mobile money and full employment’,

After clearly and succinshowing the relationships between true Keynesian theories and facts, against classical and New Keynesian mis-interpretations of the same theories and facts, Davidson easily explains his extended Keynesian solution, to the world’s present problems.

Never before has an economic book impressed me as much as this little treatise, as I see it having the potential of reaching not only the academic economists, but most all political, academic and intellectual elites, along with many private citizens. This is what the nation and world really and truly needs__a clear and concise manual to explain and solve the world’s massive problems. Davidson has succeeded as no other in accomplishing this job…

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[Philclock]

So who do we end up with, Fidel or the founding fathers?

[spoonerrothbard]

"Dr. Paul Davidson, has written the clearest vision of money and math mechanics, to date."

He's missing an element, human action.

[Paramendra Bhagat]

Yes, the economists have failed as a profession. But there is time to make up. The time is now.

[GrantedBKNY]

The stream of BS coming from the Alps and though the University of Chicago just allows the craven to dress up their greed and selfishness in a fancy (but hollow) argument. Along with it's equally utopian counterpart, Communism, the gospel of the Vienna School needs be resigned to history.

[GrantedBKNY]

".....through the University of Chicago...."

[sandiegosurf]

Communism is not utopia even in its most ideal form.

[GrantedBKNY]

Both systems claim to be able to create a better, more equitable (utopian) world. One relies on radical equality and the other on radical personal responsibility. Both ignore the failings of human character while just hoping we can do better. The Communist experiments ended in totalitarian cults of personality while the theories of the Austrian School give us messes like this. And both sides will make the same excuse that neither
system has ever been really tried, so the failures are not real.

[spoonerrothbard]

Uh, the Austrian's Business Cycle Theory predicted this along with Austrian economists (Schiff, Block, Rockwell, DiLorenzo, Paul, Jim Rogers, Henry Hazlitt predicted it 60 years ago)
http://en.wikipedia.org/wiki/Austrian_Business_Cycle_Theory

[GrantedBKNY]

Being proud that a theory could predict cycles when their disciples run rampant is truly amazing.

[NANANACHMAN]

A generation got suckered into a early 1980`s Ronald Reagan Trickle Down Economic Philosophy

"Your home will continue to appreciate"

[Marlyn]

"Ben Bernanke ... declared of the Great Depression: 'You’re right. We did it. We’re very sorry. But thanks to you, it won’t happen again.' The clear message was that all you need to avoid depressions is a smarter Fed." ???

But that's not the message I got. Yes, he says the Fed did it. But WHY did they do it? Did they do it on purpose, so they could get rich?

[sandiegosurf]

Who is they?

The Fed?

Most of the Board of Governors are already rich.

The do it for control, because they ultimately want power.

[jrubin998]

They needed a Shay's Rebellion!

[flossophy]

Why did Kruggie get it so wrong.

[sandiegosurf]

Why do people listen to this guy at all?

He doesnt give micro advice that will benefit YOU individually.

At the end of the day humans are in it for themselves and their families.

[spiderbucket]

I say we just hang them all.

[ORpolitico]

I'm no economist, but I saw it coming. It requires opening your eyes and ears, and observing the effects on everyday people. We have a corrupt system that benefits a few at the expense of everyone else, and they want to keep the wool over our eyes so they can keep stealing. They won't stop until they've bled us dry.

[changeself]

mr. krugman, ever wonder why all those words you have deployed have never seemed able to adequately address the subject matter of your choice?

with all good intentions of yours,

you and your fellow economists have no wherewithals

when it comes to understanding human history.

ask Marx and many many others before and after marx (such as Jesus) who have laid it all out

if you are indeed sincere, brave, and honest.

[Kingbreaker]

Did you read the article? That's what Krugman is claiming. The foundations of macro are built on a pretty but cracked foundation. He's calling for more realism in economic models.

[ezeflyer]

"How did economists get it so wrong?"

How do witch doctors get it so wrong?

[OldHick]

Maybe if they asked the right questions like "How do we get out of these rancid conditions?"

[D Reed]

"The Keynes Solution" by Paul Davidson is a great book - just out this week. Read it not only for insights into how we got into the crisis—but more importantly how to use Keynes economic philosophy to get out of this mess. Easy for even a layperson to understand. Highly recommended.