Over ninety-nine percent of economists did not predict the 2008 financial crisis.
The vast majority of economists were pro-globalization, by which I mean pro offshoring and outsourcing. They said it would be good for America, they were wrong.
China is predicted to wind up with over 50% of the world’s industry by 2030. Forget all the bullshit about great power competition. It’s over. There may be a war, but if there is one the West will either lose or the world will be destroyed in a nuclear exchange.
Back in the 90s an economist called Brockway liked to say “Economists are bad for your health.”
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Let’s bring this back to the election. I thought that abortion would be the election defining issue. Stupid of me, though abortion was #2 and only four percent behind inflation. It was inflation, which given how much I write about it, I should have expected. Two tables from the CNN exit polls:
Abortion was the second most important issue. Inflation was #1, and people who voted for pro-abortion measures voted about 9% less for Harris.
Economists meanwhile keep talking about the #Vibecession: the idea that there is no recession, people just think there is.
Economists, as usual, are full of shit. They have a professional dependence on official statistics and refuse to realize that many of them don’t reflect reality. As I have written in the past, according to official inflation statistics the price of cards did not rise between 2000 and 2020. In another case, you will be happy to know that medical service costs are going down. Hedonic adjustments are completely out of control: prices are dropping, you see, because products are so much better now. (There are other finangles, this is the main one.)
Growth numbers are based entirely on nominal growth minus the inflation rate, as are real wage numbers.
I would bet that the US economy has been contracting since 2008, but since inflation is understated, it isn’t visible.
I would also bet that median welfare for Americans has been declining since somewhere between 1968 and 1979, though average might have been increasing till 2008 because of how much money was being shoveled to the rich and wealthy.
We live in a pretend world, and economists are the chief pretenders, the sycophants telling the Emperor how wonderful his new clothes are.
To riff on Galbraith, economists exist to make astrologers look good.
Economics, as a discipline, should be wiped from the face of the Earth. The less than 1% of economists who aren’t charlatans or fools are not enough to justify the harm economists do, which exceeds even that of MBAs.
Harris lost because of the insistence of Democrats that the economy was good, inflation was fine, and that voters were too stupid to read their own grocery bills. Because of this belief Harris said she wouldn’t have done anything different than Biden did. What she needed to do was get out there and say she was going to drive down prices, especially rent and groceries.
As for Trump, we’ll talk more about the effects of his economic plans, if instituted, later.
bruce wilder
I was clicking thru to various electoral results maps last night and somehow I got turned around and dumped into a different X-twitter than the one I usually use. My usual one is not mostly political.
This bizarro world twitter was pure Democratic “progressive” centrists decrying the unreality of the world Trump voters inhabit, led most prominently by economist Dean Baker. The tone was scornful fact-checker on a vengeance tour, the content various degrees of self-deluded. Just what describes here.
Bill H.
Economists. Dean Baker kept insisting that there was no labor shortage. There were plenty of workers, he claimed, they were working for the competition. All you needed to do was raise wages and hire them away from your competitor. He could not be convinced that all that did was move the labor shortage from one employer to a different employer. Brilliant.
Dermot O Connor
Those inflation numbers GOP/DEM are of course a proxy for class. The Dems are doing juuusssst fine, thank you very much. So their fair-trade soy latte costs 70c or 1$ more, what’s that to the PMC? Dimes. For a working class person, it means it’s harder to buy actual food, to survive on essentials.
Best example is that twat Robert De Niro, telling people to “Vote for Biden, so things can stay good like they were before”. Christ, what a pack of insulated morons, they have had this coming for a long time. They didn’t learn from 2016, and they won’t learn now.
(Past behaviour = best predictor of future behaviour).
Not optimistic about Trump for the same reason. I suspect Iran hasn’t forgiven him for Soleimani either.
Keith in Modesto
In episode 25903 of “Ian Needs a Better Proofreader”, I’m pretty sure the word “cards” (see quote below from paragraph eight) should read “cars”.
“As I have written in the past, according to official inflation statistics the price of cards did not rise between 2000 and 2020.”
Mark Pontin
Or “I could never be an economist because I never went to theology school or studied acting,” as I recently heard from someone.
Economists perform the role in modern societies that priesthoods did in pre-atheistic feudal societies, in the modern case telling people to believe’ in the evidence of things unseen,’ e.g. the US economy is doing great and how dare you doubt it.
Neoliberalism and the Market as unfailing supercomputer that by definition guides things so that all will be well and all will be well (in Julian of Norwich’s words) is an even dumber belief system than the Divine Right of Kings because so continually falsified by direct experience like 2008.
Also:
[1] You’ve got a typo in the line ‘ according to official inflation statistics the price of *cards* did not rise between 2000 and 2020’;
[2] Dean Baker is relatively benign and sensible as economists go.
Jan Wiklund
There is a good list, and a log one, of economists’ blinkers at https://othercanon.org/organization/
Carborundum
The most important issue data above is from the 2022 exit polls, not 2024. The 2024 pattern is quite different. In those data, abortion is the third most salient issue at 14% support (i.e., about half of 2022 levels).
The big thing I see in the 2024 data is generally higher issue capture (i.e., more winner take all on any given issue). Republicans captured 26% of respondents on the economy while Democrats captured 27% on Democracy (I assume this is shorthand for preservation of democratic institutions). Immigration captured 10% for Republicans and abortion 10% for Democrats. Issue-wise, this is very efficient. I’m sure the electoral technicians are very pleased with themselves.
2024 exit poll data are here: https://www.cnn.com/election/2024/exit-polls/national-results/general/president/0
In terms of inflation measures, I can’t see how the aggregate economy could have contracted since 2008. There’s simply too much real economic activity for that, to say nothing of the population increase. Per capita, would be interesting to explore.
Steven Coleman
On the campaign trail Kamala specifically touted her plans to combat inflation. The press ignored her. Go after price gouging in groceries, I guess you could argue whether she could be successful, but I think she would have tried. She also talked about increasing the housing stock.
Altandmain
Speaking of China, the Chinese are deflating their real estate sector and increasing the industry.
https://x.com/thinking_panda/status/1843590527280964009
In other words, they are prioritizing the productive parts of their economy, while shifting away from the real estate bubble, which never should have been allowed to inflate to begin with.
A few smarter commentators understand what is happening – China is deliberately allowing its real estate to fall, contrary to what the mainstream economists are reporting.
https://x.com/BenjaminNorton/status/1844408100343931302
Meanwhile, in the West, real estate is allowed to inflate, resulting in a huge and unsustainable bubble, at the same time worsening affordability.
—-
Another data point on China – the stock market is not doing so well.
https://x.com/avispartan1/status/1837594027807440917
But considering China’s stronger economic performance compared to India and how there is less rent seeking, it would suggest that a stronger real economy is negatively correlated with the stock market.
—
Basically Western elites are doing everything wrong when it comes to the economy in the West. That’s on purpose to make themselves richer at the expense of their citizens.
The rise of Trump isn’t just about Trump. It’s a legitimacy crisis for the Western elite that have so badly mismanaged their economies. Trump is not the solution, but it’s a sign of rising discontent among the working classes who have been economically screwed to make the rich richer.
This is the end game for neoliberalism – the West declines due to greed and faces a crisis in political legitimacy that may lead to an end of USSR-like collapse.
Oakchair
I would also bet that median welfare for Americans has been declining since somewhere between 1968 and 1979
——
Back in the 60’s the majority of women were housewife’s. Now that they are working, families have to spend more money on less healthy pre-cooked meals, cleaning, appliances, child and elder care, and so on. That’s the secondary issue because someone still has to do the household chores. In a social and individual sense women entering the work force was definitely liberating, but for the family as a whole having two working parents turned into a prison. More stress, less time all for the benefit of spending the extra money doing shit the housewife used to do.
—-
We live in a pretend world, and economists are the chief pretenders
—
Social media has replaced socializing
Processed food has replaced nutrition
Pharmaceuticals has replaced good health
Memorization has replaced education
Consumerism has replaced happiness
Caitlin Johnson had a good article about how the heroes of the west are Spider-Man and SpongeBob. Even our heroes are pretend.
https://substack.com/@caitlinjohnstone/p-150885121
Duncan Kinder
It’s not inflation; it’s a supply shortage. While both do result in higher prices, each has different causes. Inflation results from too much money; supply shortages from too little stuff.
Covid supply chain disruptions set off the shortage, but there are other constraints: eg water, fertilizer.
It is difficult to see how Trump bombast could overcome these.
Daniel Lynch
Inflation was an issue, yes, but not a coherent, rational issue.
There was bound to be some supply issues caused by covid. Millions killed, millions disabled, surviving workers demanding and getting higher wages. However, wages are minor input for manufacturing and agriculture.
The price of eggs went up because of bird flu. Yes, Biden has not handled bird flu well, but neither will Trump.
The price of beef is up because of climate change and population growth, but neither corporate party will seriously tackle those issues.
The price of housing is up because of climate change (fire & beetles killing trees), population growth, and unregulated speculation, but neither corporate party will seriously tackle those issues.
The price of Doritos is up because it’s a monopoly, as are many other food items. Biden’s Lina Khan has done some good things to break up monopolies, but it is a drop in the bucket that is barely noticeable. Of course Trump will not break up monopolies.
So yes, inflation is a thing, but it is not rational to expect either corporate party to do much about it, except possibly Greenspan-style blowing up the economy either by jacking interest rates or cutting Federal spending.
marku52
Debunking Economics, by Steve Keen (an economist) is excellent. He shows how some of the fundamental assumptions that their entire house of card is constructed upon, leads inevitably to demonstrably insane outcomes.
Here’s one from Hal Varian, head economist at Google. Since only 2% of GDP is invested in energy production, removing energy production would only impact 2% of GDP.
Now there’s some sound thinking.
No wonder their predictive power is shit. it is a really great read for those interested.
Ian Welsh
Altandmain:
yes, I wrote about housing/industrial policy in China, covering all that:
https://www.ianwelsh.net/china-is-transitioning-economically-and-so-far-succesfully/
Daniel: about 50% of inflation “caused” by Covid wasn’t, it was inflation above cost increases by oligopolies.
And yes, neither party is going to tackle that properly, though Dems were more likely, as Khan demonstrated, assuming she got to stay.
Soredemos
It is remarkable how bad economists are at their supposed job. Most of them openly admit they don’t even understand money, but also insist that this lack isn’t a big deal.
You wouldn’t tolerate this in any other profession. If plumbers didn’t understand the basics of things like water pressure, you’d stop hiring them. Particularly if people from another profession consistently did better work. If, I don’t know, the tiling guy was better at plumbing than the actual plumber, you’d naturally think something was seriously wrong. But this has consistently been the case with every ‘economic miracle’. Look up the New Deal, or Japan’s MITI, etc, and their decision making ranks were dominated by things like lawyers.
‘Economists’ used to be called ‘political economists’. There was a keen awareness of the human, political dimension, not blind worship of supposed impersonal laws of economic nature, amd there was a certain humility towards treating the study as what we’d now call a social study, not a hard science (Marx would certainly go on and on about making it a science, but he meant more in the sense of developing a comprehensive system of analysis. I suspect he wouldn’t have much patience for modern economists looking at abstract graphs of ultimately made up numbers and going ‘science!’).
Mark Level
“Steven Coleman
On the campaign trail Kamala specifically touted her plans to combat inflation. The press ignored her. Go after price gouging in groceries, I guess you could argue whether she could be successful, but I think she would have tried. She also talked about increasing the housing stock.”
Wow, just wow!! Can I sell you a beautiful historic bridge here in Duluth, Minnesota?
Joe Biden ran as a faux weak-tea Bernie “socialist” promising huge Infrastructure projects. Time (or Newsweek?) did a cover story on how he’d be the “next FDR”. What did he do? He signed the Bipartisan, Chamber of Commerce (R) plan, then he let 2 of his most favorite toadies play “Villian of the weak” & say the Dem plan (which would’ve helped actual people) was too expensive. The fake, AOC “Progressives” who could’ve demanded a vote on this & Medicare 4 All wimped out and backed down, just as they always do!! So all the Infrastructure “improvements” are for the Big Guys, the Players & the connected. (Oh, & what did the “Progressives” get for their loyalty? Cori Bush & Jamal “Fire Alarm for Ukraine” Bowman got primaried by AIPAC and deposited in the political dumpster. (Bowman didn’t even serve long enough to get the lifelong pension! Poetic justice.)
At the start of the 2020 primary season, Kamala was “against fracking.” This cycle she was “for fracking” but explained “My values [LOL] haven’t changed.” She was for “the Green New Deal” but this cycle she promised “the most lethal military” that has ever existed in history (one year into a U$ funded genocide in Palestine, incidentally.) Biden was taped on camera telling the donors, “Fundamentally, nothing will change.” Now there’s a promise kept!
I have listed a long list of Biden-Kamala failures (actually deliberate betrayals might be a better description) on Ian’s Trump Wins thread, won’t repeat myself here.
The Electorate’s verdict is in, & it’s not good. Only the 2nd Voter majority win for Rs since Bush Jr. in 2008; the 3rd since Reagan shellacked the feckless Jimmy Carter, who I stupidly campaigned for as a 17 year old who couldn’t vote in 1977. Live & learn!
I think it’s clear what and where her “values” are, 100%. Let’s cover 2 more “top jobs” she was given, just to be thorough, however– 1. She was appointed the Border Czar. She went down to Central America and set up (likely her staffers did the grunt work) a few call centers to create like a 0.2% boost in the employment rate (figure’s just off the top of my head, I dunno), then came home. The Democrats paid for all kinds of Migrants to come in to lower American wages (as both parties do) & incidentally to vote (D.) That seems not to have worked out too well. (In fact, she denied she was ever Border Czar despite the fact that anyone could Goggle dozens of old news stories saying exactly that. Not too proud of the job she did, evidently.)
2. She was also given a political pandering job running a Committee against Antisemitism AND Islamophobia soon after 10/7/23. So she lied about “Antisemitic” incidents, claimed for over the next year there were Hamas “systematic rapes”–despite the fact that the Grayzone, Electronic Intifada, Mondoweiss & much later even Ryan Grim at the Intercept showed there was not a single documented rape of any Israeli woman, living or dead. Then in Michigan campaign appearances she made a point to have her lackeys refuse to admit Muslim women wearing hijabs. (Too likely they might’ve said something about their family members being slaughtered?) Due Dissidence early on filmed people being stopped at an E. Coast campaign rally and asking why they were not admitted. No answers given.
I’m tempted to use Bush Junior’s fractured, “Fool me once, shame on you! Fool me twice . . . uh, hmmn, ahh, “Won’t get fooled again!” for this one. Except it would be Fool me 7 times, shame on me.
PS– not trying to be smug but I’ve got a pretty good b.s. detector, because, 1. I grew up in the upper Midwest where most people are pretty straight with you. 2. I lived in California for over 30 years where bosses and authorities endlessly lie and b.s. you. 3. I even survived a Hermetic occult group which taught me some great skills and shared great info, but then the not charismatic leader let one of his little flunkies in our area run around bringing minor girls to the Hot Tub at events & plying them with wine & weed, etc. (I knew this only 2nd hand, 3 of my friends were there and they immediately exited the event and shared it with me.) When I followed the rules & complained quietly to the authorities I was tricked into calling the “Brother”, who to be fair was both self-declared as mentally ill under California law to get welfare benefits, & also a 24/7 weedhead. He preceded to tape record himself threatening to decapitate me & shout other inanities. I talked to the Top Guy in NYC and he told me he’d order the (illegal) tape destroyed, & the “Brother” to steer clear of me. The “Brother” continued to play the tape for his little drug party pals, to slander me & to threaten (other friends told me) to plant drugs in my place and have not only me but my 2 roommates arrested & put away “for life.”
I called the big guy & he stated we would “both” be investigated. I asked why the Brother was allowed to lie to him (say he’d destroy the threatening tape & keep playing it) & he had no answer. At that point, realizing nobody in the Org would protect me from a madman, I told the Big Guy I’d just file a police report. He asked me not to, I did. It also listed him as someone who had listened to the threatening tape in the Police Report without my permission, a felony. A lower official in the area, who was actually an accredited lawyer, was then ordered to “investigate” me & wrote findings directing me to withdraw the Police Report, or be disciplined . . . at that point, even the Big Guy realized they were going too far in harassing me & “amended” the decision NOT to tell me to destroy/ withdraw the Police Report.
Happy ending: I found out later what the “Brother’s” power came from. He had a rather attractive Green Card wife from Scotland who was sleeping with the head of my local Lodge (located in a beautiful, massive regular Mason’s lodge in Marin County, CA, just above the Bank of America) who tricked me into calling the “brother” (which I was then blamed for doing since everyone knew TB was mentally ill & couldn’t withstand pressure), & when the Big Guy was in town he was sleeping with the Wife as well. . . . The Brother also had a huge Library of Egyptian mysticism from when he was younger which the Big Guy wanted to inherit for the cult when the Brother died. Which he did in less than 2 years, alone & abandoned by the ex-wife on the floor of his trashy hovel, terrible asthma attack when he was alone, the body was blue and cold when the ex sent a neighbor to check a day after TB went incommunicado. Dude wasn’t even that old, maybe 50. And the Org got his Library. I think the Big Guy got the wife as well. The head of my Lodge had over 2/3rds of his members leave with me in protest at supporting a madman & (potentially) a pedophile, & later recruited some other sketchy sorts, incl. a guy who’d been banned from my previous Lodge for beating his girlfriend into unconsciousness, then writing a letter to all of us explaining how the gf “made” him beat her up.
Per advise from some sane & experienced people in a different lodge, I just stopped paying the Org my dues & was expelled about 3 years later. (Had I quit, it could’ve looked like I did something wrong.)
Incidents like the preceding will inculcate a strong discipline not to believe liars & con-men.
bruce wilder
I was in my professional life for a time at least an economist.
Everything critical and contemptuous thing against mainstream economics is true.
The stuff about being a civic religion and a secular priesthood, preaching a faith in nonsense — all of that, true!
You know what is also true? Lots of you, thru fatuous criticisms, have been unwitting allies of a vacuous economics.
You will never undermine economics by being flippant or by being casually accepting of its frameworks. Lots of people dismiss economics over the alleged centrality of selfish individualism to its core concepts. Lots of people talk about a “market economy” without wondering what they are referring to. Ridicule of the efficient market hypothesis is commonplace.
The economists had sponsors among the wealthy but the anti-economists have always been their own worst enemies
KT Chong
Replying to Altandmain’s point about real estates in China:
In China, a man needs to buy and own a house first before he can propose and marry a woman. Women expect men to own a house before the men are considered as eligible partners for marriage. Often women would NOT even date a man unless she knows he owns a home, (unless you are a foreign man, then you get special treatment… well, used to anyway, but that’s a whole other discussion.)
That is the cultural expectation of men for relationship and marriage in China.
So, when real estate prices became unaffordable for young men, then they also could not afford to get married and have babies, and it worsened China’s demographic crisis. That is why China does not really want to let rich people (i.e., the capitalist class) and foreign investors to capture and own all the real estates, speculate and drive up housing prices, and therefore make marriage unaffordable for young people.
Of course, this has been a serious problem for Japan and South Korea that have very similar cultural expectation of men and relationships. However, their governments have either failed or refused to act and reign in the capitalist class and real estate prices. At least the CPC is doing something about it.
Ironically, the only Western analyst who has caught on is (surprisingly) China basher and hater, Kyle Bass of Hayman Capital, who briefly mentioned it once on an MSNBC interview.
KT Chong
i.e., the government popped the real estate bubble because “houses are for people to live in, not for speculation”. Soon after Xi said that big speech, he popped the bubble and crashed the real estate. So it’s obvious.
Altandmain
@Soredemos
It’s best to see economists as the equal of Joseph Geobbels on behalf of the rich. The Western mainstream ones, anyways.
They aren’t there to tell the truth. They are there to act as propagandist for the rich so that they can carry out their class warfare goals. So having a successful track record isn’t relevant because that’s not what they are there to do.
There are a few non-mainstream ones like Michael Hudson and of course, Chinese economists often have very different views that their Western counterparts.
—–
The big question now is what the West does next.
Trump is going to have his hands full fighting the Establishment, and that’s a big “if” because nobody knows if he is going to keep his promise to the American people or be more like his first term.
Throughout the West, there are similar crises, with the Establishment parties losing legitimacy at a fast pace. Most of the opposition are just the same Establishment and I hope more people in the West wake up and realize the enemy isn’t China, Iran, or Russia, but their own elites.
Democrats, like most Western Establishment parties, will continue to gaslight and alienate the public. Right now the core Democratic voter is the upper middle class and especially, the rich. Based on the election results and the Democrats inability to see that their actions have angered the less well off, along with their failure to learn from 2016, I expect them to double down on hostile rhetoric and further alienate themselves from the public.
It’s entirely possible that some form of populism will be here to stay, especially as the economy worsens. It’s not so much about the individual candidates as much as it is a legitimacy crisis for the Western elite. That is if the West doesn’t undergo anything like a USSR-like breakup, which is looking more likely.
Feral Finster
Gee, why would the voters not crave inflation? Why wouldn’t voters want their purchasing power eroded to the point where they are lucky to eat cat food, so the MIC can chase war and empire?
How selfish of the voters!
Feral Finster
@Daniel Lynch: and the spikes in prices immediately following the war in Ukraine was just a coincidence?
different clue
” Its not just the economy, stupid. Its the stupid economy.”
There. I just improved Hillary Jefferson Carville’s little saying.
Bazarov
It doesn’t matter who the president is.
Elections are just a clever strategy for cultivating legitimacy for bourgeois rule–keeping in mind that the state is the mechanism by which one class rules over and exploits the others.
The various election competitors merely reflect society’s base structure, namely “anarchy in production,” which is why USA rule seems so contradictory and inefficient.
Inflation is as inevitable as imperial decline. The American–nay, western–standard of living depends on unequal exchange with the global south made possible by imperialism. The super-profits derived by the west via unequal exchange allowed the powers that be for nearly a century to bribe the lower classes in their sphere by paying them more than their labor was worth.
In fact, most in the west do unproductive work called “services.” The rich take people on as servants and pay them an inflated wage in return for their passivity. As imperialism declines, increasingly the value accrued by the actually productive workers will remain in their countries, not reaped via super profits by far away imperialists.
This is why it’s hopeless nonsense to think the West will or can give up imperialism peacefully. Doing so would amount to a massive collapse in standards of living that will make the fall of the Soviet Union look like a minor event. Millions upon millions would die.
Therefore, the west will fight to the bitter end, maybe take the whole world down with them. If somehow we get out of this without sparking WWIII, the result will still be incredibly bad for the west. Buckle up.