1. Isn’t it odd that real economies often defy economists? Has post-financial-crisis criticism made us savvier consumers of economic ideas? Let’s consider the precise professional habits that generate “cry wolf”, “what wolf?”, and “rigor distortis” errors in many economists.
2. A rigor-loving psychology, paradoxically, predisposes many economists to prefer being narrowly right yet broadly wrong. Their precision-seeking methods rigorously misrepresent reality (“rigor distortis”).
3. Cry-wolf “economists have had another terrible year,” writes right-wing journalist Jeremy Warner. A “substantial majority of economists” predicted “market mayhem” after Trump’s election. The IMF expected a “profound shock to global confidence” after the Brexit vote. Neither happened.
4. Meanwhile a “what wolf?” free-markets-benefit-all faction continues preaching markets-know-best doctrines, despite decades of contrary data (unshared gains) and many disastrous market “decisions.”
5. How are such smart experts seduced into “rigor distortis”? Their approved methods (“methodological
6. “All-else-equal” thinking also worsens these rigorous-but-wrong habits.
In reality, many factors shift simultaneously. And incentives often cut both ways—do higher taxes mean people work less, or more, to maintain prior spending?7. Fans of “self-organizing”…
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