Chapter 3. Beware of False Prophets

How Prophets Cost Profits

Economists are always ripe targets for the friendly needle, and as I start this chapter an oldie comes to mind. Paradox: When none of the economic theories are working, all the economists are.

I bring that up for levity but also to make a point in defense of economists. Economics may or may not be a dismal science, but it's important to recognize that it is not a natural science, like physics or mathematics, where everything is about facts and outcomes can be predicted with certainty. Economics is a social science where facts are weighed along with questions about how people will act on those facts. That makes a variety of outcomes possible, and explains why economists sometimes seem pusillanimous. However, in the case of those economists who subscribe to popular schools of thought, such as Keynesianism, monetarism, or supply-side, they have left the realm of science altogether, and at best operate within the realm of science fiction. True economics, now referred to as Austrian economics, is seen as a fringe theory, the province of gold bugs and gloom-and-doomers like yours truly. Of course, as my father once said, Austrian economics makes about as much sense as Chinese physics. It's a science, and its laws function the same way no matter where they operate or who attempts to apply them.

In any event, I'd rather see the needle jabbed at the professionals in finance, investment, government, and business generally, who take ...

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