Sep 082009

Paul Krugman in Sunday’s NYT has an article entitled “How Did Economists Get it so Wrong?”

It’s fine as far as it goes, I think, but it misses so much, since it just focuses on financial economics. No mention of the growing wealth inequality in the US and its effects, such as forcing people to buy on credit, or using their homes a piggy banks (as long as the price was supposedly rising). No mention of the problem with the assumption that existing workers who lose jobs once they get moved abroad can find good new ones. No mention of the dubious belief that more international trade is always a good thing. and no thought at all that standard economics won’t adequately describe the actual world forever (or even now).