The naysayers got it right after all

IN a recent Irish Examiner, Rajan Raghuram asked the question “Why did economists not foresee the economic crisis?” At the end of his wandering article he cites, “specialisation”, “the difficulties of forecasting” and “the disengagement of much of the profession from the real world”, as the three factors explaining collective failure.

Aside from the most ridiculous “difficulty of forecasting” reason, (isn’t that what they do?), he ends up claiming that many were simply not paying attention. Not paying attention? On their salary? Let’s stall the ball a moment. Highly paid economists and academics mingle in the upper echelons of banking, politics and power in every country.

In Ireland we have been lucky enough to have had a handful (maybe two?) of economic voices scream warnings at us, warnings of an overheating of the economy which the central bank and financial regulator should have been pre-empting and didn’t.