When, exactly, did economists become charlatans? Probably in the early-mid 20th century. That's when they stopped listening and began commanding. Instead of trying to understand how economies work, they started to tell them what to do.
And now, economists are almost all mountebanks and scamsters.
They pretend to know what they don't know at all. And they pretend to be able to do what they can't do. They meddle. They interfere. The make precise estimates and forecasts. They make pompous judgments. They almost sound like they know what they are doing.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Last month, The Atlantic magazine proved that it is run by half-wits. It put a photo of Ben Bernanke on the cover with the headline: "The Hero."
"Ben Bernanke saved the global economy," said the description.
Oh really? How did he do that? Don't bother to ask. Nobody knows what was wrong with the global economy, whether it has been saved' or how it was saved, least of all, the editors of The Atlantic.
Certainly, Ben Bernanke doesn't know. The biggest credit and real estate bubble of all time blew up on his watch, anyone could have seen it coming. But not Ben Bernanke. And how could he possibly save' a situation that he neither saw nor understood?
Our assessment of Bernanke is closer to that of Mike Shedlock: "We can state without a doubt that Bernanke is an inflationist jackass, devoid of common sense. Clueless about trade, debt, history and gold."
Shedlock believes The Atlantic cover will earn it a spot in the contrarian magazine cover hall of fame, next to TIME's famous 2005 cover: "Home $weet Home," which lauded the advantages of buying a house.
We don't know. But we know Bernanke is an economist. And economists are frauds. Can they make us richer? No. Can they make the economy work better? No.
What can they do? They can cause problems and then come up with claptrap solutions that make them worse.
Here is Joseph Stiglitz again, missing the point:
US inequality is at its highest point for nearly a century. Those at the top no matter how you slice it are enjoying a larger share of the national pie; the number below the poverty level is growing. The gap between those with the median income and those at the top is growing, too. The US used to think of itself as a middle-class country but this is no longer true.
The country will have to make a choice: if it continues as it has in recent decades, the lack of opportunity will mean a more divided society, marked by lower growth and higher social, political and economic instability. Or it can recognise that the economy has lost its balance. The gilded age led to the progressive era, the excesses of the Roaring Twenties led to the Depression, which in turn led to the New Deal. Each time, the country saw the extremes to which it was going and pulled back. The question is, will it do so once again?
See how it works, dear reader? Stiglitz has no interest in what really causes "inequality". Nor does he care what role it plays in an economy. He is simply convinced that it is bad' and that we must "do something about it!" What does Stiglitz propose? Raising taxes on the rich', of course.
In his mind, the economy is always losing its "balance" and going off the rails. And then, thank God, the economists of the progressive era and the New Deal come to the rescue.
But how does he know what balance an economy should have? Of course, he has no idea. Only his own prejudices and preferences.
Economists are vain and incompetent. So are a lot of people. But what makes economists particularly reprehensible is that they are willing (and alas, able) to impose their prejudices on the rest of us.
How do they do that? Ah... we are about to reveal the dark secret of economists, GDP and other claptrap.
Don't miss Bill's next Daily Reckoning. To receive the next article straight into your inbox as soon as he's written it, sign up to the email list here .
Information in The Daily Reckoning is for general information only and is not intended to be relied upon by individual readers in making (or not making) specific investment decisions. Appropriate independent advice should be obtained before making any such decision. Your capital is at risk when you invest in shares - you can lose some or all of your money, so never risk more than you can afford to lose. Always seek personal advice if you are unsure about the suitability of any investment. The Daily Reckoning is an unregulated product published by Fleet Street Publications Ltd. Customer services: 020 7633 3600. Fleet Street Publications Ltd is authorised and regulated by the Financial Services Authority. https://www.fsa.gov.uk/register/home.do FSA number: 1152 34
Who is the richest person in the world?
The top five richest people in the world have a combined net worth of $825 billion. Who takes the crown for the richest person in the world?
By Vaishali Varu Published
Top 10 stocks with highest growth over past decade - from Nvidia, Microsoft to Netflix, which companies made you the most money?
We reveal the 10 global companies with the biggest returns since 2013. One firm has posted an astonishing 9,870% return, meaning a £1,000 investment would now be worth almost £82,000.
By Ruth Emery Published