Economics is always called the dismal science, because it has science pretensions yet never makes accurate predictions.   The outlook, according to economists, is always rather bleak.

But given the current state of the economy, economists are downright ecstatic, because they can be relevant again.  And, in this case, it turns out they are a lot more optimistic than unemployed people are about the future.

You know when economists are cheery things must be pretty bad.   

Wake Forest economic historian Robert Whaples says he and the "vast, vast majority" of economists are more optimistic about the future than a recent poll found average Americans are - a Rasmussen Poll released March 10 says that nearly half of adults (49 percent) believe their children will be worse off than their parents, with only 26 percent believing in a more optimistic outcome.

Given that, why is an economist saying the opposite?   Part of it is being contrarian, to be sure, since economists always are, but Whaples also contents that productivity and standards of living will continue to rise because the underlying drivers of these trends have not disappeared. 

"The recent financial turmoil has no bearing on this long-term prediction," says Whaples. "After all, the Great Depression didn't affect the long-term economic trend of the 20th century."

Does that mean he is making a prediction when the economy will rebound?  Of course not, and that is always the downside to economics; economists are always confident about their predictions yet have no real basis for it.  That is the downside to existing in a world where random data about past behavior is expected to produce projections about the future.   He has no model for a rebound other than that the Great Depression didn't last forever.

Do I think it will get better?  It depends.   People often rationalize why their beliefs have no responsibility for blame so if more taxes and business penalties make the situation worse, and Pres. Obama ran on just that platform, progressives may well argue that the economy is not progressive enough, whereas conservatives may insist that unless we are living in a world of a few Old Man Potter's we are not libertarian enough.    




There is a solution but it requires custom knob-turning for each generation.    Unfortunately, economists, like military generals, are always prepared for the last war rather than the new one.