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.

What we should remember this Friday, is the reaction those isolated commentators got from “the establishment”, as news editors were speed-dialled in desperate attempts to gag these economic messengers. It doesn’t take the most learned economist to read the basic trends of any economy, but it takes courage to interpret and relate these to a general audience, in our case, an audience manipulated and bled dry by powerful interests allowed to do so by inadequate/non existent regulation and disastrous political decisions. No, we are not all to blame for this situation, not all of us bought into the “free ball of money” presented to us. None of us had a say in September 2008, when our economic future and very existence was tagged to a commercial entity seen as too “important” to allow fail.

So no, Rajan, I don’t agree with any of your three postulations. Why? Because the same structures and economic masters inhabit every establishment across the globe, calling the shots in whatever way the most favourable wind blows. All that happened this time was most of them got caught out. Therefore, a good exercise for a student of economics would be to review public statements by such “acclaimed” world economic thinkers before the crash and see what exactly they said. From that, the few pre-crash “naysayers” could be elevated into positions of trust in any government or entity interested enough to hire a “free thinker” who simply got it right and had the courage to say so.

Gerry Mac Bride

Baile Mhuirne

Co Corcaigh