Predicting the “unpredictable”

As the Dutch economist Dirk Bezemer points out, neoclassical economists like to excuse themselves for not anticipating the biggest economic downturn since the Great Depression with the argument that “No-one saw this coming“. Bezemer shows that there were at least a dozen economists and commentators who did see the crisis coming, and warned of it extensively in the media and academic literature.

Many of my warnings were made in the first edition of Debunking Economics. This chapter brings those extracts together to show that the crisis we are now in was anything but unpredictable.

Misunderstanding the Great Depression and the Great Recession

A major reason why Bernanke was appointed Chairman of the Federal Reserve was that he was alledegly an expert on the Great Depression. In this chapter, I explain why he and almost all neoclassical economists (including Paul Krugman) don’t understand why the Great Depression occurred, and have barely a clue as to why we are now, once again, trapped in a debt-deflation.