Biff! Bang! Boom! (Crash!)

by Larry Beinhart, March 26, 2009

“According to the United States Department of Labor there [are] 13,000 economists in the US. About 400 colleges and universities grant about 900 new Ph.Ds in economics each year.”—Wikipedia.com

Blathering busted nickel, Batman! Thirteen thousand of them, and all of them were wrong about the economy!

How can that be?

It’s the Joker, Robin.

The Joker?

He trapped them in the Mirrored Funhouse in Looney Land. It was a fiendish plot indeed.

That’s a lot of economists to trap in one funhouse. Holy humping, how did he capture them all?

You forget how terrifically twisted the Joker’s devilishly diabolical schemes are. He didn’t have to capture them. He told them how fabulously fantastic the fun was in the Funhouse, and those woeful wrecks wandered in willingly.

But, Batman, it’s in Looney Land. Didn’t that tip them off?

The sign got worn and faded. After all, it was painted way back in 1929. Then someone came along and painted it over to say “Morning in America.”

But, Batman, why did they stay?

The mirrors, Robin. Once they were inside all they could see—and for that matter, hear—was themselves. So they went round and round, seeing and hearing themselves, over and over, until that was all there was. They weren’t even really mirrors, they were themselves and one another.

Come on, Batman, you must be joking.

No. No, I’m not, Robin. Though I will admit, I am metaphoring.


It really is comic-book strange.

We would expect that there would be different schools of thought among economists. That some of them would have said the US economy, and the world economy that depended on it, had serious flaws. That there would be a theory, or a set of theories, out there, ready to explain what happened when it did happen. That there would be theories, ready at hand, about how to fix things. There are not.

The facts were available. There was a “boom” from 2002 to 2007. Virtually no jobs were created. Median income declined. Manufacturing declined. During that “boom” consumer debt went up 60 percent. The national debt increased by 61 percent. The trade deficit increased by 50 percent.

All the growth in those years—an increase of 37 percent in GDP—can be accounted for by an increase in debt. It’s one thing to incur debt in order to invest. To build something that will pay off the debt. But here, nothing was being created except a huge credit bubble.

So why weren’t economists pushing the panic buttons?

Because economics is theology. Not science. Not even social science.