Economists

"An economist's guess is liable to be as good as anybody else's. "

Will Rogers

I think Will was too kind to the economists of his day. As of his death in 1936, none of the neoclassical economists had figured out how it came about that the economy had stabilized at a low utilization of economic resources. It took John Maynard Keynes to figure that out, and his General Theory wasn't published until after Rogers' fatal airplane crash at Point Barrow.

Here is what Keynes had to say about economists:

"But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil."

I'm not convinced that even Keynes got this right. The power of vested interests, when coupled with the writings of defunct economists, amplified by "voices in the air" heard only by madmen in authority, can be very powerful, indeed. Present concerns about the nonexistent "debt crisis" and the imagined specter of "inflation" and "bond ratings" are examples. It's like relying on Elwood P. Dowd's conversations with Harvey for economic advice.

Even in Keynes' day, the intellectual influence of defunct neoclassical economists on policy led the Roosevelt administration to prematurely attempt to balance the budget in 1937, setting off a second dip of the Great Depression.

I was there.

It took five more years and immense war spending to dig out of that hole. Let's not go there again.