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Comment by TheOtherHobbes | Hacker News Reader

A lot of "uneducated" people could see 2008 coming. I had many conversations with people with no economic training who were all thinking "Uh oh..."

The rational conclusion from this is that mainstream academic theory - i.e. not people like Keen - is a source of collective stupidity.

See e.g.

http://www.telegraph.co.uk/finance/economics/8089832/We-cant...

When untrained people can predict the future more accurately than trained experts, the training of those experts has negative social value.

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To paraphrase Nobel prize winning economist Paul Samuelson, everyone has predicted 9 of the last 5 recessions.

+1 to that. A lot of people predicted rapid fall of the US dollar following various stages of QE, and the number of Silicon Valley headlines with the word "bubble" in them went up significantly in the past 2 years, and yet...

It depends on people's definition of mainstream academic economists, because in general, there has been strong predictive power in the models they use in how the effects of the financial crisis played out over time. There are surveys of academic economists out there that can back this up.

This in contrast to mainstream people who talk about economics, who have been predicting hyperinflation for years now.

There were many academics who warned that austerity policies would be a drag on the economy for years. There were people in academics warning about a possible housing bubble.

“HFM: But he’s the expert, right? It’s a tough thing. If you have somebody who’s really trained in the mortgage business, he’s been in the mortgage business for fifteen years, in equilibrium he’ll do a great job. He’ll be able to pick, of the mortgage pools out there, which is the good one, which is the bad one. He did a very good job of that, because the ones that he picked were better than the market. But in terms of detecting the paradigm shift, the guy who’s just buried in the forest…he’s not going to see the big picture, he’s not going to catch the paradigm shift.”

Excerpt From: Anonymous Hedge Fund Manager, n+1and Keith Gessen. “Diary of a Very Bad Year.” HarperCollins, 2010.

There are always people thinking "Uh oh..."

Sometimes they are right.

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