This month, I strangely find myself of the cover of BC Business magazine, along with four other economists (online version here). All but one academic are policy-oriented economists who comment regularly on the BC economic scene. The tag line for the cover goes like this:
The Economists: They were supposed to predict the Great Recession but didn’t. Some even say they caused it. But whatever your take on the dismal science and those who practice it, one thing is for certain: the economist’s time is now.
What’s strange about the cover is that I never even spoke to the journalist writing the story. I got sent a short list of questions, knocked off my response back in October, then a few weeks later was invited to a photo shoot, where I learned it was for the cover. I protested that they might not sell many issues with us five on the cover but so it goes …
For my own predictive abilities, I gave myself a B+ for seeing the recession coming, though not the nosedive and subsequent recovery of financial markets over the past year. If anything I was on this theme early on (going back to this post), but was more concerned about the bubble dynamics themselves than what later came out to be deep linkages to the financial sector via asset-backed commercial paper and subprime mortgages. I find it surprising that others were so oblivious to the dynamics in the housing sector. It was not so much my own bearishness, though â€“ I was just reading a lot of economic analyses that seemed spot on in calling the recession.
My only regret in the responses I made was to give a nod to Paul Krugman for his great analyses of the financial crisis, health care and climate change. A pretty safe choice for a business magazine, I suppose, and I like to read Krugman’s weekly missives. But I wish I had cited Jame Galbraith instead. On this very theme, I read on the weekend a great article by Jamie where he pokes Krugman’s September 2009 article in the New York Times magazine, How did the economists get it so wrong?, not so much for his critique of mainstream academic economics, but for not speaking about any of the economists who did see the crisis coming. Galbraith goes on to highlight some of these thinkers.