What would we say about meteorologists unable to foresee major hurricanes devastating humans beings and their creations, like towns and houses, whirling them into the air to crashland them far away? We might accept their inability to do anything about it, but would we accept the absence of any early warning? No, and they are fairly good at those warnings. No reason to suspect them of enjoying being in the eyes of hurricanes, nor to be paid by the tourist industry not to scare people away.
By the same token, what would we say about physicians unable to foresee a major pandemic, killing millions? Would we accept the absence of early warning, even if we have a dim view of their ability to intervene successfully? Answer: we would not. Massive inability to see links between smoking and lung cancer, or between sugar-fat-salt excess and obesity, is held against them. Vicious people even relate that inability to unwillingness to give up own smoking and eating habits, to be paid by the tobacco industry for no warnings and by pharmaceuticals for false warnings.
Again by the same token, what would we say of economists, specialists in the science of economics--the same to the economy as meteorology to the atmosphere and medicine to the human body--unable to predict a major catastrophe like the current crisis in the economy, devastating the livelihood of millions? There were voices, like that of a Robert J. Shiller, but few and far between. Might we not say, or think, that the economy is bad, the science of economics is worse, but worst are the economists themselves?
For what do we have people who so early in their lives reach that collective level of shared incompetence? Do they enjoy crises and not warn others to keep for themselves the good early stages, before the peak? Hardly, their business incompetence is proverbial.
Are they paid not to issue warnings so that speculators can enjoy the upturn before common people pay for the downturn, with losses and stability bailouts to flatten the curves? Well, that may sound more like it. But hardly bribed, more relied upon to praise the market as long as the going is good, meaning for those at the top, and to keep silent if a crisis for those at the top is on the way, praying for the return of the upturn. For the rich.
However, that assumes they knew all along what was coming, or suspected so, but were dishonest. Intellectually competent, but morally bankrupt, afraid of losing the confidence of those at the top, of not being in, being unpublishable, weird lefties or worse.
Many of them might prefer that conclusion to the opposite: morally normal, but intellectually incompetent. Theirs is not a science but a fraud since they started their model building based on centuries old mathematics modeling centuries old mechanics. To put the finger at the key sore point: they started worshipping the equilibrium, looking at the newtonian universe governed by three laws. A lot is happening, yet there is overriding order in that giant system of force and counter-force. Identify that order!
Scientific minds are geared to engage in that exercise, to abstract away from the reality that meets our senses, and meets or insults our needs so we die of starvation, to a level high enough to harbor an order. Those who die for lack of supply since they have no demand (articulated in cash, not in need) do so according to the law of demand-supply equilibrium, unable to pay the price. The system is found at a market level producing price equilibria, not at the human level of human beings not satisfying their needs.
But even so they fail to see massive disequilibria coming, like between a wilting real economy and a blooming finance economy because of their axiomatic belief in the market as self-regulating.
Imagine the science of the atmosphere had fallen into the minds of economists programmed to believe in a self-regulating atmosphere. There would be breezes as the sun moves from rising to setting, but any serious build-up because of overheating would be counteracted by cooling winds coming to the rescue. No need to bribe such people programmed not to see massive discontinuities, quantum jumps, positive--not only negative--feedbacks. Their minds are untrained to accommodate such phenomena anyhow.
Or, imagine the science of the human body being handled by economists who believe in the body as self-regulating. Like for the atmosphere they are right to a certain point: some exposure to trauma, microorganisms, carcinogens, stress and strain is met with some resistance. The human immune system creates counter-forces, so does a helpful social and natural context. But the exposure may be directed at the resistance capacity itself, like psycho-warfare; and the resistance may generate more exposure, like in a war with violence breeding violence. And yet there are some regularities even in these monstrosities of human suffering.
Chaos mathematics, with self-reinforcing disequilibria, is so much better at this than the continuity mathematics of economics. But economists are programmed by their lukewarm middle class way of life to allocate ten pounds to fill a shopping basket, not by the freezing point of the poor whose lives are slipping away, nor by the boiling point of the board room deciding massive short-selling to kill uncooperative competitors. Differential equations are cut out for their lives. Ruled out are singularities, do not divide by zero even if that is where reality starts, catastrophes.
Economists should use the crisis to reflect on how they are programmed, then on economics, then on the economy, not the other way round. The way to survival passes through major reprogramming.