Whether mainstream economics has issues is wholly uninteresting, unless you are proposing a different theory with fewer issues. "The academy is flawed" doesn't mean that what the populists feel in their hearts is correct. It's the closest approximation of the truth we have.
The argument is that basic economic training leads to policy prescriptions that advanced economic training (and related fields, such as economic history and political philosophy) repudiate.
So, no need to propose a different theory. Just prominently include the above disclaimer while you're teaching basic economics, and then proceed to teach further economics (and related fields) before the kids go off to work for investment banks.
I think it is useful, and that’s a perfect way to describe mainstream economics. What’s frustrating (but predictable) is that there exists an entirely separate branch of economics which makes much more powerful observations about the fundamental nature of capitalist economics, including politics, power, and sociology. But Marxist economics are simply excluded from the Western economic tradition because it makes value judgements which directly and dangerously controversy the interests of the ruling capitalist class. In a healthier world, elements of mainstream economics would be combined with the fundamental Marxist critique of capitalism to produce new systems that are more efficient and less exploitative.
You don't need a better theory for the purpose of the discussion.
What you can do - as one example - is take the results of what you know to be flawed not so seriously and when making decisions built-in more leeway for errors and corrections, and strengthen the human side. Incidentally, that is actually very capitalist/liberalist: Give more power away from centers to the root, the local people to make their own decisions, overriding what theory prescribes.
For a concrete tiny example, when I tried to return something at a department store the employee was very afraid to do anything not by the book. She was continuously being watched by cameras too. If she had had the power to actually make decisions it would be much better. Sure, people make mistakes, but I question the solution of making people into programmed "by the rules" drones with no ability to react to local events and use their own brains (if an AI would do that everybody would be gleaming, "look how intelligent our AI is!" - even when the results are far worse than that of even a below-median IQ human brain).
The point is what can change is what you do when you find that your theory is not good enough, and I'd say there are plenty of things to do even if you don't have a better theory (now or ever).
Yeah, and because basically all of mainstream economics has VERY strong ideology built into its foundational assumptions, and its practitioners enjoy a great deal of (largely undeserved) respect and often great power (unlike other more truly scientific fields), the odds that a mainstream economist would look at the failure of their theories and conclude "wow, everything we've been doing is deeply flawed at best" is low. Good luck getting a mainstream economist to dig deeply and take a critical look at the fundamental contradictions within capitalism.
