“Having written all that, I must admit that there is some soul searching going on in the economics profession. As obvious as the financial crisis seems after the fact, few economists saw it coming (with some notable exceptions). Virtually none anticipated how severe it might be. In the fall of 2005, several prominent economists wrote in a prestigious journal, “As of the end of 2004, our analysis reveals little evidence of a housing bubble.”
Wrong. Actually the article was worse than wrong, because it was written explicitly to refute the signs of a bubble that had become obvious to many laypeople—which is kind of like the fire department showing up at a house with smoke wafting from the roof and declaring, “No, that’s not a fire,” only to have flames start leaping from the attic twenty minutes later. There was a bubble. And it can be explained best by incorporating psychology into economics, namely the tendency of individuals to believe that whatever is happening now is what’s most likely to happen in the future.”

— Charles Wheelan

Introduction
Naked Economics (rev. and updated ed., 2010)

Adopted from Wikiquote. Last update June 3, 2021. History

Help us to complete the source, original and additional information

Do you have more details about the quote "Having written all that, I must admit that there is some soul searching going on in the economics profession. As obviou…" by Charles Wheelan?

Charles Wheelan 6

American politician 1966

George Stigler (1911–1991) American economist

"The Effect of Government on Economic Efficiency." 1988

“It takes some audacity for a non-economist to write a book about economics, especially if the book deals with one of the yardsticks of the profession, i. e., money.”

Margrit Kennedy (1939–2013) German architect

Introduction, p. 13
Interest and Inflation Free Money (1995)

“Following the financial crisis of September 2008 when the American investment bank Lehman Brothers collapsed, threatening to engulf the entire banking system, the British economist John Maynard Keynes returned to center stage. In the popular press and in the writings of many economists, Keynes featured prominently as governments around the world urgently sought ways to avoid economic collapse. (…) After only a brief delay, critics of Keynes’s ideas also began to appear; but the emergence of such critics only served to emphasize the fact of his return, for only a few years earlier Keynes’s name would not even have appeared in public debate about economic policy: his ideas were seen as having so little relevance that it did not even seem necessary to mention his name when discussing the performance of the economy.”

Roger Backhouse (economist) (1951) British economist

Roger E. Backhouse and Bradley W. Bateman, ch.1 "Keynes Returns, but Which Keynes?" Capitalist revolutionary : John Maynard Keynes (2011).

“I return to economics and to economists, and to the question of why the profession’s directions have evolved in the manners evident from this book. A major conservative economist once explained that a source of his antipathy to government traced back to the defeat of his southern ancestors by a larger north economy. Here is a similar factoid. Joan Robinson once wrote that her opposition to having the U. K. enter the European Market was due to the fact that she “had more friends in [Nehru’s] India than on the continent.””

Paul A. Samuelson (1915–2009) American economist

Coeditor's Forword in Inside the economist’s mind: conversations with eminent economists (2007)
New millennium

“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”

John Maynard Keynes book The General Theory of Employment, Interest and Money

Source: The General Theory of Employment, Interest and Money (1936), Ch. 24 "Concluding Notes" p. 383-384
Context: The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.

“Where do ideas about economics come from? They come, of course from economists—where by an "economist" I mean someone who thinks and writes regularly about economic issues. But not all economists are alike, and in fact the genus includes two radically distinct species: The professors and the policy entrepreneurs.”

Paul Krugman book Peddling Prosperity

Introduction: Looking for Magicians
Peddling Prosperity (1994)

“I’m not saying that arguments based on rationality are necessarily wrong in particular cases. (I can’t very well say that, given that I wrote an article on why it can be rational to vote.) I’m just trying to understand how pop-economics can so rapidly swing back and forth between opposing positions. And I think it’s coming from the comforting presence of rationality and efficiency in both formulations. It’s ok to distinguish economists from ordinary people (economists are rational and think the unthinkable, ordinary people don’t) and it’s also ok to distinguish economists from other social scientists (economists think ordinary people are rational, other social scientists believe in “culture”). You just have to be careful not to make both arguments in the same paragraph.”

Andrew Gelman (1965) American mathematician

“One of the easiest ways to differentiate an economist from almost anyone else in society” http://andrewgelman.com/2011/07/19/one_of_the_easi/ (19 July 2011)

“In the past few years there has grown up a large group of young economists who have accepted the theoretical doctrines of the Keynesian Revolution and who have come into national prominence through their support of an economic policy of full employment.”

Lawrence Klein (1920–2013) American economist

The Keynesian Revolution. Vol. 19. New York: Macmillan, 1947/66. p. 156.

“I think the US is in a terrible state of denial … Worse than that, we seem to be caught in a kind of Götterdämmerung response: we'd rather have the world go down in flames than change our lifestyle or admit we're wrong.”

Kim Stanley Robinson (1952) American science fiction writer

As quoted in "Future tense" in The Guardian (14 September 2005)

“Someday I must read this scholar Everyone. He seems to have written so much--all of it wrong.”

Tamora Pierce book Emperor Mage

Source: Emperor Mage

Help us to complete the source, original and additional information

Charles Wheelan 6

Related quotes

Related topics