Economists and Soothsayers

By   |  March 10, 2009

According to the dictionary, a soothsayer is a person “who claims to be able to foretell events or predict the future.”  Wikipedia defines the word as meaning “a person who…predicts the future based upon personal, political, spiritual, mental or religious beliefs rather than scientific facts.”

So, what’s the difference between an economist and a soothsayer?  Darned if I know.  Economists lay claim to being scientific, I suppose, but it’s not like any science I’m familiar with.  Their facts change over time, different economists look at the same facts and come up with different opinions, and their work falls far short of the scientific method — hypotheses that can be tested, with the results being replicable by other investigators.

Even the folks on TV who predict the weather are more scientific, and look how often they’re right, especially more than a couple of days into the future.

That’s it, then.  Here we are relying on soothsayers with a professional jargon so dense and so replete with impenetrable data and cockamamie charts than none of us can understand what they’re talking about.  Come to think of it, maybe that’s the point.  If us average schmucks could understand it, why would we need them?

Take Paul Krugman, denizen of The New York Times op-ed pages and soothsayer extraordinaire.  He’s even got a Nobel Prize to prove it.  In his column yesterday, he criticized the Obama Administration for not handling the economic crisis very well.  He’s very concerned that they aren’t going to spend enough money, aren’t going to go far enough.  He concludes,

So here’s the picture that scares me: It’s September 2009, the unemployment rate has passed 9 percent, and despite the early round of stimulus spending it’s still headed up. Mr. Obama finally concedes that a bigger stimulus is needed.

But he can’t get his new plan through Congress because approval for his economic policies has plummeted, partly because his policies are seen to have failed, partly because job-creation policies are conflated in the public mind with deeply unpopular bank bailouts. And as a result, the recession rages on, unchecked.

O.K., that’s a warning, not a prediction. But economic policy is falling behind the curve, and there’s a real, growing danger that it will never catch up.

Well, at least he was honest enough to say he’s not making a prediction.  But here’s the thing — Krugman is a really bright guy, and he’s probably a pretty good economist.  But there are other bright economists who see things differently, sometimes exactly opposite the way Krugman sees them.  As an average person and certainly no economist, I look at the Administration’s approach to handling the economic crisis, and it leaves me with a very queasy feeling in the pit of my stomach.  And it doesn’t make me feel any better to think about the fact that everything they’re doing depends on the advice of certain economists (and not others) plus, as always, the political calculations of self-interested politicians.

It’s no wonder that economics is often referred to as the “dismal science.”  I just wish our future didn’t depend so much on the soothsayers who practice it.

(This article was also posted at Opinion Forum.)

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3 Comments on “Economists and Soothsayers”  (RSS)

  1. JJ, that’s an excellent article that gets it right. I’m one of those people who hopes Obama succeeds, in the sense that he does the right things and gets the economy on the right footing. I’m willing to give him more time to get it right, but like Fineman says in the article, things aren’t looking good.

    I think all this comes down to Obama’s profound lack of any kind of relevant experience you’d want to see in a president. If he had been a governor, or a CEO, or a general, or even an experienced member of Congress, things would almost certainly be going better. But, alas, he is what he is. Maybe he’s smart enough to figure it all out very quickly, but he just isn’t showing that yet.

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