[paulpauper]

I think you're overestimating the power of economists and putting too much blame on them. The 2008 crisis was not cased by economists; rather, it was caused by MBAs who approved mortgages that should have never been approved in the first place. This generated short-term gains for these financial institutions that paid the price years later.

[tedsanders]

It's not even known whether the subprime crisis even caused the great recession. Causality is very hard to prove when we only have one reality. Some think the crisis was caused most by cautiousness by the Fed; in this case, the 2008 crisis may indeed have been caused by economists.

http://econlog.econlib.org/archives/2015/09/how_the_subprim....

[woodandsteel]

>it was caused by MBAs who approved mortgages that should have never been approved in the first place.

But the point is the economists should have seen that was happening, so we could think about the government stopping it, or at least to put the public on guard. Instead the economics profession, with a few exceptions like Dean Baker, told the world that things were going just fine.

I mean, what is the point of even having an economics profession if it can't help us make intelligent decisions on economic matters?

[dragonwriter]

> But the point is the economists should have seen that was happening

A large number of economists (in academia, public institutions, and private finance firms), all across the ideological spectrum (Austrians, Keynesians, and every other flavor) did see it happening.

People didn't respond to then, probably because the existence of a bubble isn't a problem, as long as you can delude yourself to thinking you'll be able to time the market so you won't be holding the ball when it pops.

> Instead the economics profession, with a few exceptions like Dean Baker, told the world that things were going just fine.

Baker was far from the only prominent economist pointing to a bubble. In fact, economists were warning about the housing bubble and the fact that it would have to burst before the first dot-com bubble burst (or even expanded) back as far as the mid-1990s. That may actually be the real problem: the warnings had been around for so long no one took them seriously any more; as controversial as identifying a bubble can be, it's a lot easier to identify it than time when it will pop ,and the longer it is pointed to without popping, the more likely people are to convince themselves it's just a permanent feature of the market and not a bubble that will pop.

[Terr_]

> A large number of economists [...] all across the ideological spectrum [...] did see it happening.

In a strange way, that's almost step down: A strong correlation between what economists say and what happens -- even a negative correlation -- suggests that theory is somehow catching up to reality.

In contrast, a weaker correlation -- even if positive -- implies that there's still a lot more problems to shake out.