22 September 2008

Wrong on the Housing Bubble

Economics of Contempt lists a couple dozen leading economic pundits that who actively denied the existence of a housing bubble, the very bubble that has us in a major economic mess now.

Dean Baker and Paul Krugman got it right. But, notably, the list of those who got it very wrong, not long before the bubble burst, is heavily populated with politically conservative economists (support for the proposition that they got it wrong is in the link above).

1. Alan Reynolds, Cato Institute
2. Kevin Hassett, American Enterprise Institute
3. James K. Glassman, American Enterprise Institute
4. Jude Wanniski, journalist/hack
5. Jerry Bowyer, author of The Bush Boom
6. Nicolas P. Restinas, director, Harvard Joint Center for Housing Studies
7. Jim Cramer, host of CNBC's "Mad Money"
8. Neil Barsky, Alson Capital Partners, LLC
9. Chris Mayer, professor of real estate, Columbia Business School, and Todd Sinai, professor of real estate, Wharton
10. Jonathan McCarthy, senior economist, New York Fed, and Richard W. Peach, vice president, New York Fed
11. David Malpass, chief economist, Bear Stearns
12. Steve Forbes, CEO, Forbes, Inc.:
13. Brian S. Wesbury, chief investment strategist, Claymore Advisors
14. Noel Sheppard, economist, Business & Media Institute
15. Carl Steidtmann, chief economist, Deloitte Research
16. John K. McIlwain, senior resident fellow for housing, Urban Land Institute
17. Margaret Hwang Smith, professor of economics, Pomona College, and Gary Smith, professor of economics, Pomona College
18. Charles Himmelberg, economist, New York Fed
19. Jim Jubak, investing columnist, MSN Money
20. James F. Smith, director, Center for Business Forecasting
21. Kathryn Jean Lopez, editor, National Review Online
22. Samuel Lieber, president, Alpine Woods Capital Investors
23. Mark Vitner, senior economist, Wachovia
24. George Karvel, professor of real estate, St. Thomas University

The list also notably illustrates another important point. A plausible, even compelling economic argument, and the confidence of the people who put you in a good position to expound upon your economic arguments, does not mean that you are right.

In the hard sciences, the guys with the most expertise are right a very large percentage of the time. In economics, this isn't true.

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