If only economists understood that it is wicked problems all around :(

The commie leanings during my early years were primarily why I ditched electrical engineering.  Of course, I ditched most of the commie thoughts even before I applied for a student visa to come to the US, and over the years have come to even delight at the nonsense spouted by "socialists."

Engineering, however, gave a false sense of confidence about solving the pressing problems.  I simply believed that qualified minds had to approach the problems like how engineers tackled problems and, bingo, the world will become a better place.  Come to think of it, that is what the commie thinking also told me ;)

And then came the reading list in the first year of graduate school.  Through that I came to realize that an engineering approach to solving problems will not work for the social issues that I wanted to not only study but solve.  Because, of the "wicked problems."

If you have never come across the phrase 'wicked problems" before, hey, it isn't your fault--you had better things to do than go to graduate school and doodle around like I did ;)  Ok, seriously, there is a fair chance you have not come across that phrase before, but the moment you read up about it, you will fall in love with that idea.  Soon, the world will look like it has nothing but wicked problems.

So, what the hell is a wicked problem, you ask?  Instead of directing you to the papers by Churchman, Webber, and Rittel, I will give you the Wikipedia overview:

[A] problem that is difficult or impossible to solve because of incomplete, contradictory, and changing requirements that are often difficult to recognize. The use of term "wicked" here has come to denote resistance to resolution, rather than evil. Moreover, because of complex interdependencies, the effort to solve one aspect of a wicked problem may reveal or create other problems.

You see right away plenty of examples, right?

Now, if only economists understood that most of what they study is also nothing but wicked problems.  Instead, they believe that economics is a science--like physics--and, therefore, they can solve the problems like how we can approach scientific problems.  Thus, it is no surprise to me when I read this:

Ten years ago, a survey published in the Journal of Economic Perspectives found that 77 percent of the doctoral candidates in the leading American economics programs agreed or strongly agreed with the statement "economics is the most scientific of the social sciences."
In the intervening decade, a massive economic crisis rocked the global economy, and most economists never saw it coming. Nevertheless, little has changed: A new paper from the same publication reveals how economists continue to believe that their science is superior to all other social sciences

Yep, as the joke goes, economists have correctly predicted eight of the last six recessions! ;)

The author--Moisés Naím--notes:

The world is still living with the effects of the most recent economic crisis, and the inability of economists to offer solutions with a significant degree of agreement shows how urgently their discipline needs to be disrupted by an injection of new ideas, methods, and assumptions about human behavior.

Yep, remember that old joke about President Truman calling for a one-handed economist?

Naím concludes his piece with this:

Ten years ago, I suggested that economists would “be well advised to trade in their intellectual haughtiness for a more humble disposition.” That's advice that has yet to be heeded.

Makes it quite a wicked problem for economists!

They don’t make economists like Albert Hirschman any more :(

Throughout my life, I have not been a great fan of buying books.  I have extensively relied on libraries, which,   here in the US, are wonderfully stocked.  Out of the few books that I did purchase as a graduate student on a restricted budget, I re-sold most of them.  But, I made sure I retained two books by Albert Hirschman:  Exit, Voice, and Loyalty and The Rhetoric of Reaction.

(Yes, Marx is a holdover from my teenage years!)

There was one other book of his that I loved, but didn't buy; I borrowed from USC's libraries Hirschman's Development Projects Observed.  I learnt considerably more from these three books than I did from many, many journal articles and books put together.  They were phenomenally educational, showed me how powerful ideas do not have to be presented in obese books, and that those ideas can be presented relatively jargon-free for any thinking person to understand.

In writing about Hirschman, Francis Fukuyama, too, writes about these three books, for the most part of his essay.

He did very little quantitative work, and will be remembered for a series of slender books written in an accessible English that non-economists have no trouble understanding. He did not observe the methodological straightjacket his discipline imposed, but wandered off instead into other fields like politics and philosophy in an attempt to recover some of the unified social theory of the 18th and 19th centuries–hoping to avoid, as he put it, the “specialization-induced intellectual poverty in this field.” His legacy is not data collection or micro results, but rather some very big concepts that continue to shape the way we think about not just development but public policy more generally.

Yes, yes, yes a gazillion times to this.

In graduate school, I was not a fan of the quantitative work that most economists were pursuing.  I felt that most of those economists were not convincing me with their stories and were, therefore, playing with calculus and statistics to razzle-dazzle me.  Hirschman, on the other hand, spoke to me.  Commonsense thinking.  Logical, and not rhetorical. Nothing polemical. Nothing ideological. Unchained to any particular field of inquiry.

I am delighted that Fukuyama notes about Hisrchman's "hiding hand" argument.  I hope that the likes of the do-nothing GOP will read this essay, particularly the concluding paragraphs, where Fukuyama writes:

One of my favorite Hirschmanian concepts was that of the Hiding Hand, a play on Adam Smith’s Hidden Hand, which he laid out in his 1967 book Development Projects Observed. The book analyzed a number of World Bank projects on which he consulted, and noted how a number of them failed to achieve their objectives or else produced unexpected results. But he argued that the failure to anticipate unintended consequences was actually a good thing. If we could foresee all the possible negative consequences of our actions, we would become completely paralyzed–not just as governments seeking social change, but as individuals wanting to try new things in work, love, or life in general. The Hiding Hand that blinded us in this fashion was thus Providential.

There are quite a few of us who are fans of Hirschman.  The uber-blogging academic, Daniel Drezner is one of those. Drezner even awards, well, not a real prize, an "Albie."  Drezner refers to:

any book, journal article, magazine piece, op-ed, or blog post published in the [last] calendar year that made you rethink how the world works in such a way that you will never be able "unthink" the argument.   

Yes, it is impossible for me to "unthink" the idea of "exit, voice, and loyalty," for instance.  I relate that idea of the "hiding hand" even to the neurosurgery that my daughter is pursuing.  She said that if she had known everything that she now knows about the hours and stress of being a neurosurgery resident, leave alone the life after the long seven year residency, she might not have ever gotten into this specialization.  To a large extent, all our lives, and the progress of humanity depends on this variation of fools rushing in.  Because, knowledge can also paralyze us from doing.  Which is why a 23-year old rushes with excitement to a neurosurgery residency without that knowledge.  If ever your health needs a neurosurgeon's treatment, then be thankful for that "hiding hand."

Fukuyama ends with this:

They don’t unfortunately make development economists like Albert Hirschman any more.

Well, not only "development economists."

But, at least, we had one Albert Hirschman.

Measuring unemployment, according to Abbot and Costello. Damn economists!!

The "real" rate of unemployment in the US is ...?  Why "real" you ask?  Here is an Abbot and Costello-style explanation at Greg Mankiw's blog.  (He thanks "U Chicago's Allen Sanderson for sending this along" The grammatical errors bother me; should I complain to Sanderson or Mankiw? ... hehe!)

COSTELLO: I want to talk about the unemployment rate in America.

ABBOTT: Good "subject". Terrible "times". It's about 9%.

COSTELLO: That many people are out of work?

ABBOTT: No, that's 16%.

COSTELLO: You just said 9%.

ABBOTT: 9% Unemployed.

COSTELLO: Right 9% out of work.

ABBOTT: No, that's 16%.

COSTELLO: Okay, so it's 16% unemployed.

ABBOTT: No, that's 9%...

COSTELLO: WAIT A MINUTE. Is it 9% or 16%?

ABBOTT: 9% are unemployed. 16% are out of work.

COSTELLO: If you are out of work you are unemployed.

ABBOTT: No, you can't count the "Out of Work" as the unemployed.  You have to look for work to be unemployed.

COSTELLO: But ... they are out of work!

ABBOTT: No, you miss my point.

COSTELLO: What point?

ABBOTT: Someone who doesn't look for work, can't be counted with those who look for work. It wouldn't be fair.

COSTELLO: To who?

ABBOTT: The unemployed.

COSTELLO: But they are ALL out of work.

ABBOTT: No, the unemployed are actively looking for work...Those who are out of work stopped looking. They gave up. And, if you give up, you are no longer in the ranks of the unemployed.

COSTELLO: So if you're off the unemployment roles, that would count as less unemployment?

ABBOTT: Unemployment would go down. Absolutely!

COSTELLO: The unemployment just goes down because you don't look for work?

ABBOTT: Absolutely it goes down. That's how you get to 9%. Otherwise it would be 16%.  You don't want to read about 16% unemployment do ya?

COSTELLO: That would be frightening.

ABBOTT: Absolutely.

COSTELLO: Wait, I got a question for you. That means they're two ways to bring down the unemployment number?

ABBOTT: Two ways is correct.

COSTELLO: Unemployment can go down if someone gets a job?

ABBOTT: Correct.

COSTELLO: And unemployment can also go down if you stop looking for a job?

ABBOTT: Bingo.

COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to just stop looking for work.

ABBOTT: Now you're thinking like an economist.

COSTELLO: I don't even know what the hell I just said!

Why economists failed to foresee the Great Recession?

Raghuram Rajan, whose comments I have blogged about earlier only with appreciation, and who is fast becoming one of my favorite commentators on economic matters (the Indian connection is a bonus!) continues to think about why economists failed to anticipate the Great Recession--the question that bugged everybody from the Queen of England to my mother, who asked me the same question as the crisis started unfolding:

three factors largely explain our collective failure: specialization, the difficulty of forecasting, and the disengagement of much of the profession from the real world

Hey Professor Rajan, can you condense these into a crystal clear bottom-line that in very simple words will offer the explanation to my mother and the Queen of England?

many simply were not paying attention!

There.  That is one hell of a blunt, honest assessment!  Thanks.

ps: of course, the topic of how economists screwed up (and continue to do so) is not a new topic; this is an example

I worry when Mankiw cites Oregon

It is not often that I come across "Oregon" in serious economic policy analysis.  After all, while the state is famous for, among other things, microbreweries, hippies, Nike, it is not any leading light on economic issues.  Unless they are bad examples of economic policies!  Which is how Greg Mankiw uses one example from Oregon, in his detailed essay on the challenge government economists have faced over the past year and a half, and the lessons for the discipline itself.

(The essay is a wonderful illustration of how all the fancy math and jargon is not needed at all, even though at the drop of a hat economists would love to say "as a first approximation" and then scribble a couple of second-degree differential equations! It is a must-read in order to understand the points of departure in the economic recovery ideas debated: government spending versus tax incentives.)

Anyway, in discussing the jobs created or jobs saved claims of the Obama administration, Mankiw presents one of the issues related to this--data reporting errors and false claims (I wonder whether he intentionally chose not to quote Hayek in this context; I recall that Hayek wrote about how in a Soviet system bureaucrats have an incentive to misrepresent numbers):

Some employers, for instance, have counted money used to provide pay raises to existing employees as “creating” jobs. Thus the Wall Street Journal reported last November that the Mid-Willamette Valley Community Action Agency in Oregon had claimed to create 205 jobs with its $397,761 in stimulus money — spending less than $2,000 per “new” job.

Really?

Quote of the day: Richard Posner on the state of the economy

We simply cannot responsibly gauge the pace of the recovery. Nor is it even clear whether we are better off with a fast recovery or a slow one. A fast recovery could create an acute risk of dangerously high inflation. A slow recovery could greatly increase the size of the federal deficit, threatening all sorts of economic and political harms, with eventual unacceptable inflation only one of them. I am particularly concerned with the danger of social and political turmoil if high unemployment and related economic pathologies persist. We are now in the third year of a depression. The economic crisis continues to occupy center stage despite all the other news assailing us.

Am glad that the prolific Posner is returning to blog at the Atlantic.  Boy is he a one-man-writing-machine!  BTW, I wonder if his economics colleagues at Chicago have resumed talking with him :)  In case you are wondering what I am talking about, here is the New Yorker piece.

Even the brainiacs don't care about economists?

If Jeopardy is one nerdy show, then what does it say when contestants blank on the category called "Economists"?  And more so when they don't even know the granddaddy of 'em all--Adam Smith!!!
(HT)

How did economists get it so wrong?

That is the question Paul Krugman discusses here. Before we get to that, this cartoon, via Mankiw, explains what economists do:




Now, this is change I can believe in :-)

How to earn tenure, but lose elections

Via Brad DeLong, here is congressman Barney Frank:

Not for the first time, as an elected official, I envy economists. Economists have available to them, in an analytical approach, the counterfactual. Economists can explain that a given decision was the best one that could be made, because they can show what would have happened in the counterfactual situation. They can contrast what happened to what would have happened. No one has ever gotten reelected where the bumper sticker said, "It would have been worse without me." You probably can get tenure with that. But you can't win office.

American economics profession failed the US

Like many people, in academe and otherwise, I am most interested in how the economics profession, theory, and education will change as a result of this Great Recession. My hypothesis is that economics education, starting from the ECON 101 classes, will barely change at all. After all, academia is notoriously slow-paced when it comes to any change.

But, shouldn't economists acknowledge that they goofed up. Big time? Shouldn't the American Economics Association issue a mea culpa of sorts?
Here is Richard Posner on this topic:

In modeling the business cycle, economists not only ignored, because difficult to accommodate in their mathematical models, vital institutional detail (such as the rise of the "shadow banking industry," which is what mainly collapsed last September)--often indeed ignoring money itself, on the ground that it doesn't really affect the "real" (that is, the nonfinancial) economy. They also ignored key concepts in Keynes's analysis of the business cycle, such as hoarding and uncertainty and business confidence ("animal spirits") and worker resistance to nominal (as distinct from real) wage reductions in depressions. Lessons of economic history were ignored, too, leading to a belief that there would never be another depression, let alone a collapse of the banking industry. Even when the collapse occurred, in September, many macroeconomists denied that it would lead to anything worse than a mild recession; the measures that the government has taken to recover from what has turned into a depression owe little to post-Keynesian economic thinking; and the economists cannot agree on what further, if anything, should be done, and which of the government's recovery measures has worked or will work.

Besley and Hennessy's letter, when first published, was described in some quarters as a letter of "apology" by English economists. It was not that; nor is the August 10 letter--the latter is a denunciation of mainstream economics.

The notion of a profession's apologizing for its failure in a letter to the monarch is charming, however. It would be an apology to the nation, personified in its monarch. The English monarch does not exercise political power, but does personify the nation, and it is easier to write a letter to a person than to a nation.

The English economics profession failed the United Kingdom; the American economics profession failed the United States. Not that the profession should be equated to its macroeconomic and financial divisions. The study of business cycles is only a small part of modern economics. Other areas of economics bear significantly on the study of business cycles, such as labor economics, without being implicated in the failures of response to the current crisis. But the control of the business cycle had until the present crisis been regarded as a principal triumph of modern economics and justification for regarding economics as the queen of the social sciences. We have no monarch; the President is not a personification of the nation but rather the head of the national government; there is no one to write the letter of apology to. No matter. The urgent need is for the part of the profession that concerns itself with business cycles to acknowledge its inadequacies and reorient its training and research.

Why economists and academics run into PR trouble!

Couldn't the economics professor have figured out a better way to convey the point instead of saying:

"With the exception of—possible exception of—prostitution, I don't know any other profession that's had no productivity advance in 2,500 years," he says.

And guess where he brings in this contrast? In the context of discussing online education!
Of course, my immediate thought was that through online prostitution gets the biggest bang for the buck; isn't that productivity? ha ha

The criminals (?) who caused the Great Recession

On the banking/financial crisis that is at the center of this Great Recession:

There has been no criminal investigation to date, so evidence supporting criminality has not been uncovered -- no one is looking for it. Liberals hate to think that Obama, led by Geithner and Summers, is part of a grand cover-up scheme, but that is exactly what is going on. How else can you explain the lack of criminal investigations? Why isn't the FBI breaking down the doors of the commercial and investment banks and grabbing computers so as to preserve incendiary e-mails that will most definitely implicate executives? Why are managements that caused this still in their jobs and still receiving bonuses? Are the bonuses paid to the folks at AIG that caused its collapse nothing more than hush money? How can the rating agencies still be in business? Why don't we make one arrest and lean on the bankster to see if he will fold like the cheap suit that he is and name other conspirators? The FBI spends more time investigating $2,000 drug buys than they have to date investigating the biggest heist in the history of the world: $40 trillion, that's trillion with a T, that's 40 million bags each containing $1 million.

Maybe you think it is some crazy left-wing loonie who wrote this over at Mother Jones or at The Nation. Think again. The writer is a former investment banker with Goldman Sachs, which, by the way, reported a good chunk of change as profits!
Anyway, this is from the first instalment of a three-part discussion between John Talbott--the former investment banker--and Simon Johnson, the former IMF Chief Economist. The discussion thanks to Salon.com.

Johnson's response is far from comforting when he writes:

I think the situation may actually be worse.

O M G!

Johnson explains why it is worse than we think:

What worries me most about our situation at this moment is that while our current leadership on economic strategy issues now talks about the mistakes of their (and our) past, their policies are pointing us back in the same direction. The latest evidence in this regard is the regulatory plan released by the Treasury this June.

This plan is a long list of technocratic tweaks. But when you dig through all the details, it is hard to find anything that will really make a difference to the functioning of our financial system. Most importantly, we will still have banks that are perceived as "too big to fail," and these institutions will have access to government bailouts under vague and completely open-ended terms. In what way will this encourage responsible lending in the future?

Johnson makes a point that I hadn't thought about:

And the way in which the Obama administration is attempting to extricate us from the crisis -- with unconditional support for big banks, regardless of costs -- is not addressing the fundamental imbalance of power that favors the financial sector. If anything, the big banks that survive in this sector have now become more powerful -- the political market share of JP Morgan Chase or Goldman Sachs has increased because Lehman and Bear Stearns are out of business.

The firms left standing have become even more powerful!

Climate change, economics, and journalists

Like many people, I too can't but wonder where the global climate change will take us, and have blogged, and "oped"ed about it too.  

Eric Pooley writes that as much as scientists are in agreement about most aspects of climate change, most economists are also in agreement about one thing: it is cheaper to act than not to act.  He writes:  

First, there is a broad consensus that the cost of climate inaction would greatly exceed the cost of climate action—it's cheaper to act than not to act. Reducing greenhouse gas emissions by moving to alternative energy sources and capturing carbon from coal-fired power plants will cost less in the long run than dealing with the effect of rising sea levels, drought, famine, wildfire, pestilence, and millions of climate refugees. (There are some outliers who disagree with this—Danish statistician Bjorn Lomborgcomes to mind—and some respected economists, like William Nordhaus, who argue that future, richer generations will be able to more easily shoulder the cost burden than we can.) But influential mainstream economists from Paul Volcker to Robert Stavins to Lord Nicholas Stern to Larry Summers all agree that action is cheaper than inaction, even if they disagree on much else (Stavins can't stand Stern's methodology; Summers prefers a carbon tax to cap-and-trade). Stavins, director of Harvard's Environmental Economics Program, phrased it this way in a recent paper: "There is general consensus among economists and policy analysts that a market-based policy instrument targeting CO₂emissions ... should be a central element of any domestic climate policy."

The second area of consensus concerns the short-term cost of climate action—the question of how expensive it will be to preserve a climate that is hospitable to humans. The Environmental Defense Fund pointed to this consensus last year when it published a study of five nonpartisan academic and governmental economic forecasts and concluded that "the median projected impact of climate policy on U.S. GDP is less than one-half of one percent for the period 2010-2030, and under three-quarters of one percent through the middle of the century." (That's a lot of money—U.S. GDP in 2007 was $13.8 trillion—but Stavins has estimated the cumulative cost of all U.S. environmental regulation to date at 1 percent of GDP, and it has not been an insupportable burden.) Stavins' climate-cost calculations come in a bit higher than those in the EDF study, ranging from less than 0.5 percent to 1 percent of U.S. GDP; he describes these as "significant but affordable impacts" that are "consistent with findings from other studies." The Stern Review on the Economics of Climate Change, an influential but controversial 2006 report for the British government, concluded that climate action would cost 1 percent of global GDP (though Stern now warns that our failure to act is raising the price tag) and that inaction could reduce global GDP by up to 20 percent.

So, one might then wonder why we don't hear much about the consensus among economists.  Pooley faults journalists for this, and partly the economists themselves.  He notes that even when economists agree on the larger picture, they tend to disagree a lot, which then leads journalists to think that economists are split on this, and they then resort to reporting "both sides" of the story ....

But, all these don't worry me at all.  

I lose sleep thinking that my future and yours are in the hands of bozos, er, politicians in this country and all over the world.  Here is an example (not from climate change discussions, but from the current economic crisis).  Megan McArdle writes:

I sat here in front of my television and laughed at Maxine Waters, because her apparently random ramblings are a true spectacle.  One laughs because one can't cry.  But this woman is sitting on the House Financial Services Committee.  She is supposed to help craft the bills that govern our financial system.  And she clearly doesn't have the first shred of an inkling of a clue of how said financial system works.  Her questions had the air of someone who couldn't quite wrap her mind around the complexities of the E-Z Reader consumer activist pamphlets from which she had presumably cribbed them.

That's not really funny.  This is the crack talent that's supposed to reform the banking system into something more robust? 

Sitting back is not an option.

The problem is, we have very, very few examples to test on:  America during the Great Depression, and Japan in the 1990s.  And neither America nor Japan managed to stimulate their way out of their troubles.  You can argue--and many do--that this is because we, and they, didn't stimulate enough.  That may be true.  But unless you can forward test your theory, it's a just so story . . . as we just painfully found out about the "It was all the Fed's fault" narrative of the 1930s banking collapse.  There is no excuse for calling people who question your highly theoretical model fools and charlatans.

What we've got, since Japan really never did emerge from its lost decade, is basically one fact: America entered World War II in a depression, and emerged from World War II without one.  Hopefully, the relevant variable was the massive, massive amount of spending, rather than any of the other explanations one can plausibly build about the effect of Total War on depressions--like the slaughter of some of your excess labor force, or the substitution of more immediate fears of being killed for panic about the financial future.

That was Megan McArdle.  

The fact that we don't have successful lessons from the past to lean on, and learn from, is why I am so convinced that we need the Warren Buffett honesty as we tackle the recession.  Buffett remarked that:

The answer is nobody knows. The economists don’t know. All you know is you throw everything at it and whether it’s more effective if you’re fighting a fire to be concentrating the water flow on this part or that part. You’re going to use every weapon you have in fighting it. And people, they do not know exactly what the effects are. Economists like to talk about it, but in the end they’ve been very, very wrong and most of them in recent years on this. We don’t know the perfect answers on it. What we do know is to stand by and do nothing is a terrible mistake or to follow Hoover-like policies would be a mistake and we don’t know how effective in the short run we don’t know how effective this will be and how quickly things will right themselves. We do know over time the American machine works wonderfully and it will work wonderfully again.

World War II was NOT a fiscal stimulus!!!

Paul Krugman has a timely column for one reason: the right, which never liked the characterization of FDR as one of the greatest presidents, and who have always sought to dismantle many of FDR-initiated programs, is now all the more in a hysteria over another FDR-style government intervention in the economy.

What really caught my attention in the op-ed was Krugman's honesty in assessing FDR's record. Particularly, this sentence: "What saved the economy, and the New Deal, was the enormous public works project known as World War II, which finally provided a fiscal stimulus adequate to the economy’s needs."

When I was at Calstate, one course that I taught was "Economy and Society", which was to convey economic ideas to the teacher-prep majors. I would routinely ask them something like, "hey, it looks like WWII was good for the economy. so, does it mean that whenever we fall into an economic rut, we ought to just start a large-scale war?"

It always got them thinking, and they would start providing all kinds of responses. Until somebody pointed out that there was severe rationing. and then somebody else would point out the enormous loss of life and property we suffered, and the world suffered.

In other words, I wish Krugman hadn't written that sentence, or phrased it that way. It was not the fiscal stimulus of WWII, but it was literally blood all over the place that re-started the economy. I mean, everybody on the planet knows that Krugman is a progressive liberal, and there is no way he meant to minimize the loss of life and property. But, it is also the unfortunate aspect of economics that loss of lives--in millions--becomes a mere economic footnote, and not the main story. The main story in economics is always only economic growth.

I have a love-hate relationship with economics. Which is why I systematically stayed away from a PhD in economics itself, but did read up on it .... and continue to ....

Economics not a dismal science, just an useless science :-)

On a few posts, I have made snide remarks about economics. In one entry, I was just short of rolling all over floor laughing at the notion that economics is science! But, I am, after all, not an economist, which means that my remarks are, well, worthless.
So, let us turn to a real expert, James Galbraith, shall we? Here are two of the questions that were posed to him, along with his reponses:

But there are at least 15,000 professional economists in this country, and you’re saying only two or three of them foresaw the mortgage crisis?
Ten or 12 would be closer than two or three.

What does that say about the field of economics, which claims to be a science?
It’s an enormous blot on the reputation of the profession. There are thousands of economists. Most of them teach. And most of them teach a theoretical framework that has been shown to be fundamentally useless.

Two economists on the rebate checks: you decide!

It was quite hilarious to read in the City Journal that economics has matured into a real science. Oh, really? When exactly did this happen?
Economics is a sophisticated guessing game. No, a good economist is like a good lawyer, and an excellent one will come up with something a la Johnnie Cochran's famous, "if it doesn't fit, you must acquit" argument. Science has excellent predictive abilities--economists can't even agree on what happened in the past, leave alone being unanimous in their predictions!

Want evidence? Here is one.
Context: how successful was the idea of the rebate check that the Congress and the President signed off on, and the money we have all spent? Will it be wise to do another round of rebate?

Paul Krugman's left hook: There is, however, a case for another, more serious fiscal stimulus package, as a way to sustain employment while the markets work off the aftereffects of the housing bubble. The “emergency economic plan” Barack Obama announced last week is a move in the right direction, although I wish it had been bigger and bolder

And Martin Feldstein's right jab: The Tax Rebate Was a Flop. Obama's Stimulus Plan Won't Work Either. All of the evidence on one-time tax rebates implies that the Obama plan to send $1,000 rebate checks would do little to raise consumer spending and stop the decline in employment.

So, who you gonna believe? :-)