Or this post could be titled how doctors routinely fail to predict illnesses, diseases and injuries. It strikes me that this is one of the main problems with health care in this country. If only doctors could get better at practicing their art then we might not have such a problem with run away health care costs. Try it, go into your doctor and ask, “When am I going to get cancer? When am I going to have a heart attack? When am I going to have an ulcer? When am I going to suffer a broken leg?”
Okay, that’s a bit silly isn’t it? Well so was Paul Krugman’s article on how the economics profession got it all so wrong with regards to the recent financial crisis. In his New York Times article Krugman wrote,
Few economists saw our current crisis coming, but this predictive failure was the least of the field’s problems.
But is it the job of economists to predict when recessions are going to occur? Is it the job of the doctor to be able to answer with any degree of accuracy, “When am I going to get cancer, and what kind will it be?”
That is one of the comments David K. Levine makes in his article replying to Krugman. Levine starts right off not pulling any punches,
I was reading your article How Did Economists Get It So Wrong. Who are these economists who got it so wrong? Speak for yourself kemo sabe. And since you got it wrong – why should we believe your discredited theories?
While this initial jab is amusing Levine goes on to make several more good points as to why we shouldn’t accept what Krugman is saying without at least taking a look around. For example, Narayana Kocherlakota looks at the current state of macro economics and finds that many of the objections raised by Krugman are not accurate. Or take a look at an earlier and saner Paul Krugman who wrote very eloquently in defense of economic formalism. I would also suggest the Slate article The Accidetnal Theorist where Krugman shows the benefits of making simplified models of the real world.
The picture becomes increasingly clear to him [a famous journalist]: Supply is growing at a breakneck pace, and there just isn’t enough consumer demand to go around. True, jobs are still being created in the bun sector; but soon enough the technological revolution will destroy those jobs too. Global capitalism, in short, is hurtling toward crisis. He writes up his alarming conclusions in a 473-page book; full of startling facts about the changes underway in technology and the global market; larded with phrases in Japanese, German, Chinese, and even Malay; and punctuated with occasional barbed remarks about the blinkered vision of conventional economists.
Perhaps we should just think of Krugman as a
hack journalist these days.