Economics and Moral Courage

Lew Rockwell reports:

It must be really painful to be an economist of the mainstream today, or, at least, it should smart to some extent. In a financial and economic calamity of the current scale, people naturally want to know who issued the warnings about the real estate bubble and its likely aftermath.

When private sector jobs have grown none at all in ten years, and when ten years of domestic investment is systematically undone in the course of 18 months, when housing prices in some sections of the country collapse 80%, and when formerly prestigious banks go belly-up or receive many billions in rescue aid, people want to know which economists saw this coming.

Perhaps it is these economists, the ones who had long issued the warnings, and not the ones relentlessly consulted by the media, who should be giving the guidance about going forward. Maybe it is they who ought to be weighing in on whether the new stock-market boom is a reflection of reality, or another bubble developing within a bust that could lead to a secondary depression.

Among the mainstream, however, no one saw it coming. That is because they have never learned the lesson that Bastiat sought to teach, namely that we need to look beneath the surface, to the unseen dimensions of human action, in order to see the full economic reality. It is not enough just to stand back and look at points at a chart going up and down, smiling when things go up and frowning when things go down. That is the nihilism of an economic statistician who employs no theory, no notion of cause and effect, no understanding of the dynamics of human history.

You'll want to read the whole article and make a small contribution to your understanding of economics.