Why Should We Call Them Economists if They Couldn’t Predict the Economy’s Fall?

Question/Comment: If economists cannot see that an economy that is two-thirds consumption based with consumer debt rising and savings falling is not completely unsustainable, why don’t we call them idiots instead of economists? Some would call it mercantilism.

Paul Solman: Some would call WHAT “mercantilism”? For the record, “mercantilism” was originally a national economic policy based on the notion that the country with the most money (gold and silver) wins. Adam Smith’s Wealth of Nations was in large measure a tract against this philosophy, which reigned at the time (along with King George III) in England.

There’s nothing wrong with an economy that’s two-thirds consumption. As to consumer debt rising and savings falling, it depends on the starting point, as well as debt rising HOW FAR and savings falling HOW LOW.

That said, we sure did seem like we were on a reckless course. And plenty of economists said so. So did plenty of ordinary folks WITHOUT Ph.Ds in economics, or even a college education. How many times did you hear someone say, “We’re living beyond our means” in the past 20 years? A dozen? A hundred? Should this crisis really have come as a huge surprise to ANYONE?