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It’s the economists, stupid – Editor

We are grateful to Janet Eaton’s email network for drawing our attention to this Canadian radio program [1] and for providing a transcript. The participants in this episode [2]:

  1. Dr Julie Nelson (Department Chair and Professor of Economics, University of Massachusetts, Boston). She says: “You can find economists shilling for all kinds of groups. If these people are not consciously shilling, then they are incredibly careerist.”
  2. Dr Richard Denniss (Chief Economist, The Australia Institute, Canberra, Australia). He describes economists as the “new witch doctors in society”.

As a group, economists don’t have a great track record: they largely failed to predict the oil crisis of the 1970’s, the dot-com bubble, and the U.S. housing collapse. Even the Organization for Economic Co-operation and Development (OECD) admits that its forecasts have been way off. One of its staffers even conceded: “maybe we suffer from group think”. Little wonder that economics has been known as “the dismal science” since the 19th century.

The famous economist John Kenneth Galbraith once quipped “Economics is extremely useful as a form of employment for economists”. However, there are deeper, more serious fissures.

Economists explain how the turbulence of housing markets, mortgage rates, inflation and income inequality affect us all. But who are they speaking to and whom do they represent?

Feminist economist Julie Nelson thinks that most economists no longer represent the public good because they’re operating out of self-importance and greed. “You can find economists shilling for all kinds of groups. If they’re not consciously shilling, then they are incredibly careerist.” She believes the media obsession with the state of financial markets doesn’t tell us how we’re doing as a society. “Maybe we should be asking, who’s eating and who’s not”.

Richard Denniss concurs. He describes himself as a “whistle-blower economist”, and believes we have come to view markets as gods. “The market does this, the market does that … as if it’s something magical. It’s really just a small group of people with a lot of money who are gambling on making more.”

Richard Denniss and Julie Nelson both believe current economic group think produces a mantra that supports cutting taxes, reducing deficits, massive down- sizing, bloated CEO salaries, and “shrinking social programs till they scream”. Julie Nelson concludes these trends not only generate more poverty; they hollow out the middle-class, and that’s bad for capitalism. She says: “this was figured out a long time ago.

Henry Ford wanted to pay a wage to his workers that would allow them to buy the kinds of cars they were making.

And that makes a whole lot of sense. If you want a market for your product, you have to have people who can afford to buy that product. But that basic logic is drowned out by all the austerity rhetoric that we’re hearing from industry and government these days”.

  1. CBC Radio (Canada), 28 Nov 2016

  2. This episode was produced by Mary O’Connell

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