Do economists ever get it right?

Economics is a religion.
What else is the mythical “Inivisible hand of the free market”, other than a God, ruling from above high?

The invisible hand is to economics what natural selection is to evolution. It works well in the long term, but can be quite disruptive in the short term.

I went reading a couple years ago in an effort to understand what I was missing on economics.

Economics (the study) truly seems to be more of a process and way of thinking. In that sense, it’s pretty awesome. It can be applied to pretty much any set of data and get some reasonable answers. Are they right? Who knows.

After a ton of reading as to how this applies to the actual economy, I don’t know if I’m any smarter in any applicable way. It’s a lot of theory, a little bit of math, and a whole lot of psychology. If your guru says something is an indicator, and a lot of other people believe the same, it’s probably an indicator because suddenly there are a lot of interested people betting the same way you are. It reminds me most of sports betting lines.

Studying psychology and social changes would seem to be a better predictor than anything beyond the basics of supply and demand. I’m not saying economics as a study and process doesn’t have a place, I just don’t know if financial systems and buying habits are the best places to use that process. Crowds can be unpredictable.

If I’m wrong, I’d love to understand better, but I had to give up looking for actual answers there.

The premise that “economists” are one thing with one view and their job is like weather prediction is silly.

Regarding the claim that “economists” see smooth sailing after the tax bill passed, feel free to see what Paul Krugman (Nobel in economics 2008) has to say: NY Times – The Biggest Tax Scam in History

Or polling from the University of Chicago: “For the past two years, our expert panelists have been informing the public about the extent to which economists agree or disagree on important public policy issues”:

Their panelists almost universally say that the tax “reform” will not raise GDP and will signicantly raise the debt to GDP ratio.

That is a quick answer. I could go on all day in the same vein.

Notice that nobody, not even Krugman, has gone out on a limb to say that the economy is going to decline or to suggest that there will be a stock market “correction”. All that they are saying is that the debt will increase, but none of them will say what the overall economic consequences will be.

One of the difficulties in understanding the application of economic theory to the real world is that economies don’t operate in a vacuum, they operate in a world where theory is not allowed to be fully applied and observed without interference.

For instance, Keynes’ General Theory is never allowed to play out over a full business cycle. Deficit spending to pull an economy out of a slump works well, but the other part of the Theory (budget surplus in good times) is never permitted to flourish.

There are mechanisms in place that at least lower government payments during good times. More people working means fewer unemployment benefits and food stamp payments.

Way too broad of a question.

There is not just one sort of economics -

macroeconomics
microeconomics
behavioral economics
political economics

Macroeconomists have a hard time; their predictions are based on a lot of things that aren’t controllable.

Microeconomists have it a little easier because the scope of their studies is more contained

Behavioral economics is fascinating and much more predictable. Usually correct.

Political economics is close to macroeconomics but with political monkey wrenches thrown in.

So…. define your terms.

Either macroeconomics or political economics will do

Meteorology is a hard science, and one that becomes more precise with technological advancements. It’s mind-bobbling to think that meteorologists can predict how trillions of air and water molecules will behave, yet they do so routinely and with amazing accuracy.

Economics isn’t a science at all, just a mode of inquiry that attempts to understand human actions and outcomes.

@LostInParadise Feel free to list all economists, and how none of them “sees any problems” and not a single one says, ” the economy is going to decline or to suggest that there will be a stock market.”

You made the claims, you back them up.

The burden of proof is on those who claim otherwise. Name one notable economist, just one, who sees an economic downturn in the near future.

The burden of proof is on those who claim otherwise.

You’re spouting vague bullshit as received truth. Do your own homework.

Folks… perhaps a middle ground?

Why people don’t tend to forecast recessions

But economists have a tendency to extrapolate; if growth has been 2% over the last year, they tend to forecast it will be 2% (plus or minus a bit) in the next. A recession is a sudden change in trend.

For economists employed in the financial sector, there is an implicit bias towards optimism. As one once told me “There is no incentive to forecast a recession, If you are wrong, you’ll be fired. And if you’re right, no one will thank you.” Or as Keynes put it,

Worldly wisdom teaches that it is better for reputation to fail conventionally than to succeed unconventionally.

Go back to the dotcom boom and sceptics of those high tech valuations were told they “just didn’t get it”. Even Warren Buffett was called a dinosaur for expressing doubts.

That makes good sense.

They all seem to have a notion about how things “should be” but circumstances never seem to be thus.
And speaking of Paul Krugman, any time I see him on TV that guy is always in a bad mood. If he isn’t taking SRI’s he should be. And if he is, they aren’t working.
I know guys with serious PTSD who have a better outlook on life than he seems to.

Economists are as accurate as weathermen….100% after the fact.