most actual economists

Economists haven't had a great track record recently. Computer scientists have. Maybe the economists should take a few lessons from the people who've not just predicted the future, but invented it? Here's a trifecta of Goolsbee, Bernanke, and Krugman on their pre-crisis predictions.

http://www.nytimes.com/2007/03/29/business/29scene.html?_r=0

‘Irresponsible’ Mortgages Have Opened Doors to Many of the
Excluded

By AUSTAN GOOLSBEE
Published: March 29, 2007

Congress is contemplating a serious tightening of
regulations to make the new forms of lending more
difficult. New research from some of the leading housing
economists in the country, however, examines the long
history of mortgage market innovations and suggests that
regulators should be mindful of the potential downside in
tightening too much. ...

These economists followed thousands of people over their
lives and examined the evidence for whether mortgage
markets have become more efficient over time. Lost in the
current discussion about borrowers’ income levels in the
subprime market is the fact that someone with a low income
now but who stands to earn much more in the future would,
in a perfect market, be able to borrow from a bank to buy a
house. That is how economists view the efficiency of a
capital market: people’s decisions unrestricted by the
amount of money they have right now.

And this study shows that measured this way, the mortgage
market has become more perfect, not more irresponsible.

http://www.federalreserve.gov/boarddocs/speeches/2004/200402...

Remarks by Governor Ben S. Bernanke
At the meetings of the Eastern Economic Association,
Washington, DC
February 20, 2004

The Great Moderation

One of the most striking features of the economic
landscape over the past twenty years or so has been a
substantial decline in macroeconomic volatility. ...

My view is that improvements in monetary policy, though
certainly not the only factor, have probably been an
important source of the Great Moderation.

http://krugman.blogs.nytimes.com/2012/03/05/economics-in-the...

What you can criticize economists for – and indeed, what I
sometimes berate myself for – is failing even to see that
something like this crisis was a fairly likely event. In
retrospect, it shouldn’t have been hard to notice the rise
of shadow banking, banking that is carried out by non-
depository institutions such as investment banks financing
themselves through repo. And it shouldn’t have been hard to
realize that an institution using overnight borrowing to
invest in longer-term and somewhat illiquid assets was
inherently vulnerable to something functionally equivalent
to a classic bank run – and, furthermore, that the
institutions doing this were neither backed by deposit
insurance nor effectively regulated. Economists, of all
people, should have been on guard for the fallacy of
misplaced concreteness, should have realized that not
everything that functions like a bank and creates bank-type
systemic risks looks like a traditional bank, a big marble
building with rows of tellers.

And I plead guilty to falling into that fallacy. I was
vaguely aware of the existence of a growing sector of
financial institutions that didn’t look like conventional
banks, and weren’t regulated like conventional banks, but
engaged in bank-like activities. Yet I gave no thought to
the systemic risks.

Even more broadly, economists should have been aware of the
dangers of leverage. This was hardly a new concern. Back in
1933 – yes, 1933 — Irving Fisher published his classic
paper on debt deflation, that is, on the way high levels of
debt create the possibility of a self-reinforcing downward
spiral. And the paper remains astonishingly relevant; aside
from a few archaisms of style it could have been written
from today’s headlines. So remembering Fisher all by itself
should have been enough to rouse at least a few worries as
household debt rose dramatically relative to income, not
just in America, but in a number of European nations too.

Again, I plead guilty to negligence. I had especially
little excuse for being oblivious to these dangers given
that I had actually laid great stress on balance-sheet
factors in causing financial crises in emerging market.
True, those crises had a lot to do with currency mismatch –
basically, private debt in other countries’ currencies, so
that a speculative attack on a currency could quickly
translate into a crippling collapse of domestic demand. But
I and others should have seen that this was only one
possible channel for balance-sheet crises, that plunges in
housing prices or for that matter income could have the
same effect.