There is an old joke about the doctor, lawyer and the economist, all three, stranded on a desert island with nothing to eat. They stumble upon a tin can of vegetables. How do you open the tin can? The doctor proposes to give it aspirin, the lawyer says 'file a brief.' The economist? The economist says: "assume that we have a can opener."
Economists have a well deserved reputation for assuming away difficulties. Simon Johnson's article in today's NY Times is a good example. Johnson correctly points to the US National debt as very serious problem that needs a solution and needs it now. His article suggests that there is an easy solution. In Johnson's own words:
"And American politicians could find other ways to restore federal government revenue to where it was in the late 1990s while also bringing health care spending under control."
Sure, just bring me that can opener. How does one "bring health care under control." Johnson doesn't tell us how to do that and that, sports fans, is the biggest single problem that the US faces in getting its national debt under control. Maybe, Obamacare's unelected panel that determines who lives and who dies in the brave new world of the future can accomplish that task. A simple law providing euthanasia for all citizens over 50 years of age might be the Obama secret plan to reign in health care. Why knows? Simon doesn't tell us.
As for restoring federal government revenue to where it was in the late 1990s, one assumes that a tech bubble, similar to that of the late 1990s, will be available to fuel the tax revenues necessary to temporarily produce that result. How does one do that with no economic growth? Ah, the Obama dilemma. Killing off the economy, which the Obama Administration has managed to do so well, conflicts with their other agenda -- maximizing tax revenues. You can't have it both ways.
The Johnson article gives a window into the answer to the question: why aren't economists facing the real economic issues of our time -- out of control national debt and economies mired in stagnation. Why aren't economists interested in these issues? So, what are they interested in?
Read Uwe Reinhardt's absurd article in today's NY Times and you will see what topics occupy the time of our federally-subsized economists these days. Redistribution. Ah, there's a real topic of interest. How do we slice up the declining pie? Guess what he concludes? Give more money to higher education! That sounds like an objective solution. I wonder why a Princeton academic thinks that the number one issue of our times is how to increase the salaries of Ivy League professors. Does this guy have a conflict of interest?
Economists are no different than other people. They are self-seeking folks trying to line their own pocket. Since their employer is the government, they speak up for expanding the interests of their employer, which translates into the interests of themselves.
So, don't expect economists to shed any serious light on the major economic issues of our times. They aren't interested.
