Why So Little Self-Recrimination Among Economists?

Promoted. -- GH

Yves Smith at Naked Capitalism picked up an excellent article by former economics columnist Jeff Madrick, who attended the just-concluded annual conference of the American Economics Association, How the Entire Economics Profession Failed. Madrick writes:

At the annual meeting of American Economists, most everyone refused to admit their failures to prepare or warn about the second worst crisis of the century.

I could find no shame in the halls of the San Francisco Hilton, the location at the annual meeting of American economists that just finished. Mainstream economists from major universities dominate the meetings, and some of them are the anointed cream of the crop, including former Clinton, Bush and even Reagan advisers.

There was no session on the schedule about how the vast majority of economists should deal with their failure to anticipate or even seriously warn about the possibility that the second worst economic crisis of the last hundred years was imminent.

“No one questioned their contribution to the current frightening state of affairs, no one humbled by events.”

I heard no calls to reform educational curricula because of a crisis so threatening and surprising that it undermines, at least if the academicians were honest, the key assumptions of the economic theory currently being taught.

There were no sessions about why the profession was not up in arms about the deregulation of so sensitive a sector as finance. They are quick to oppose anything that undermines free trade, by contrast, and have had substantial influence doing just that.

Yves Smith adds some excellent commentary in her piece, Why So Little Self-Recrimination Among Economists?, inclduing an insightful quote from Thomas Palley, in April 2008: