As economics, as a field, becomes more powerful, the economy becomes more stable. I think this is probably a positive indicator for the value of economics.
This recession is severe, but it has nothing on the recessions of the past. Let's not throw out this knowledge; it was won by the accumulated experience of economic hardship unimaginable to modern Americans.
I have a hard time believing there are any "actual paid economists... doubling up in laughter" in your vicinity. Something about the attitude of your post.
People entering the workforce forty years ago could reasonably guess when they'd retire and what they'd be doing at the time. I know very few people who think they'll have the same job five years from now. It seems very likely that the argument that the economy is getting more stable is false.
Here's why: underlying predictability probably increases volatily. People love to lever up when they're certain; "Private Equity" as an asset class refers to both VC deals and leveraged buyouts because in both cases, they fine-tune their leverage to get the same (high) volatility. Increased certainty makes bankers more willing to lend, and speculative buyers are always willing to borrow.
In my experience, speculative borrowers and the marginal banker overestimate decreases in volatility. Thus, a more superficially predictable economy will lever up fast enough to more than counteract that (sort of like the theory that airbags increase traffic fatalities because drivers overestimate how safe they are and thus take extra risks).
For economic volatility to actually dampen, you'd need economists to come up with better predictions that sound really stupid, so bankers and speculators would disregard them.
This is inaccurate, or misleading at best. "It has nothing on the recessions of the past" is only true if you're looking at the pre-WW2 period. Compared to recessions since then, this is the most severe and long-lasting. There has been no recession since the Great Depression where unemployment has stayed as high as it is for so long.
Economists spoke of a Great Moderation that had occurred thanks to their ideological theorizing, but that is just an unfunny punchline to a joke now.
It's plainly obvious that I'm thinking of the entire economic history of the United States.
If you think this recession is bad, look at recessions before modern economic theory came about. That's what I'm trying to get at.
It makes absolutely no sense to throw out sound, proven macroeconomic theory because of a regulatory experiment gone wrong. I'd say it was that macroeconomic knowledge that prevented that mess from being a total disaster. And now people want to throw that economic knowledge out in favor of ridiculous shit like the gold standard, or MORE deregulation, or on the left twisted ineffective versions of laborism, or whatever. Bleh.
Economists do not necessarily have a great track record with predicting the future state of the economy. From a study by Denrel and Fang:
'Economists who had a better record at calling extreme events had a worse record in general. “The analyst with the largest number as well as the highest proportion of accurate and extreme forecasts,” they wrote, “had, by far, the worst forecasting record.' [1]
This recession is severe, but it has nothing on the recessions of the past. Let's not throw out this knowledge; it was won by the accumulated experience of economic hardship unimaginable to modern Americans.
I have a hard time believing there are any "actual paid economists... doubling up in laughter" in your vicinity. Something about the attitude of your post.