Why Economists Strike Out

An economist from Troy University offered an explanation for why so many of his peers failed to anticipate the 2008 recession that shows no sign of ending. “We’re not, in economics, very good at forecasting,” Scott Beaulier told an audience at the Philadelphia Society’s annual meeting in Chicago last weekend.

“Sixty economists predicted 2.8 percent growth in 2008,” Beaulier reminded the crowd at the Renaissance Hotel in downtown Chicago. Obviously, they were a bit off, yet none were chastened.

“What that missed prediction led to was a doubling down,” Beaulier said. “The Right said it came from too much government.”

“The Left, especially Paul Krugman, said it came from not enough government.”  Beaulier himself, who is proud of the fact that his daughter shares a birthday with Adam Smith, is clearly more in sympathy with Free Market conservatism.  Yet he shares Milton Friedman’s admonition that economists from across the political spectrum acquire more humility.  “We’re still stuck in the 1950s in the way we do economics,” Beaulier avers.

Beaulier actually is buoyantly optimistic about prospects for free market economists in academia. He notes that half a century ago, even revered sages such as F. A. Hayek could not find berths there.

“In 1965, there were no positions,” Beaulier said. “Today, there are many.”

“I myself just hired eight at Troy.” Nevertheless, it should be noted that Troy, one of the few schools that Accuracy in Academia can recommend, is admirably atypical of academia today.