the economist didn't even see the 2008 crash coming.
their prognostications are useless
their prognostications are useless
Here's one from 2006 [1] that I found relatively easily. But there's one in my head that I remember about an HSBC owned bank that was flailing and could potentially start a crisis, but I can't find it right now - I just remember reading it at the time, it was the reason I decided to wait for a downturn in the housing market. I wish I'd ignored it and bought at the time, but with the benefit of hindsight ...
[1] https://www.economist.com/finance-and-economics/2006/12/13/s...
People hear what they want to hear, and remember what they want to remember, I suppose.
Many people also saw a recession coming, because recessions always come eventually - it's a normal part of the economic cycle.
Relatively few people saw that these two things would result in many of the largest financial institutions on the planet coming near to collapse.
Even fewer people got the timing right. And not many of those had the courage of their convictions to actually place bets on it.
Because in the UK prices didn't fall, but the requirements for purchase became significantly more difficult.
Just because economists are not EXACTLY right about everything, does not mean they are ALWAYS wrong...
Think about all the possible scenarios that could have happened in 2008, and think about how closely economists -- on average -- were to that. They're actually ASTOUNDINGLY accurate. But just because they're not completely accurate, for some reason so many people think they have 0 value.
There are always lots of reasons to be concerned, lots of leverage that could crash catastrophically (and often does). Whether that triggers an actual recession or just a correction is the nebulous part. I mean, the S&P is down ~6% over the last 5 days. Are we at the start of a recession right now? Would you be willing to actually bet money on your answer? For the people who do: Are they just lucky, or actually insightful? How would you know the difference?
People have always worried about politics interfering with recession recovery - I mean, hell, a big part of the tea party's agenda was opposition to TARP and ARRA (I'm not going to go so far as to say that's WHY the tea party exists, though). Not to be too politically cynical, but I think it's fair to say that politicians will do everything within their power to protect the wealthy and the status quo and any opposition to that will be for show.
On that spirit, engineers have also predicted 200 of the last 5 bridges that felt.
They aren't though. Also, it's a bit rich to blame economists when all they do is advise politicians who very often throw all the advice out the window.
"The trouble with the housing market", Economist, March 2007
It's true that this was perhaps still somewhat understated because the levels of outright fraud supporting the bubble weren't recognized, but the nature of fraud is that it tends to be actively concealed.
The idea that cheap money leads to bubbles (which can lead to recessions) was well-established, it just doesn't harmonize well with the kind of naive Keynesian feel-good economics that politicians want to apply and universities want to teach.
Few people who correctly predicted that outcome at the time got the timing exactly right, but that's to be expected.