I don't think I believe any economists anymore. They're all making it up as they go along. Agree it seems likely we have not hit bottom yet and probably won't for a few years.
The mathematics economists do to model the economy and make all their predictions are, quite frankly, a joke. Scientists and engineers have long abandoned such simplistic ideas in favor of Bayesian modeling, which accounts for things you might not know about and can explain feedback loops and generalized risk. When the economic models that led to the current mess were explained to a community of scientists (I subscribe to one of their publications), we reacted in horrified bemusement. Their ideas of who is really running the economy and who gets paid how much are apparently derived from Fantasy-Land. Just this week, they had a Harvard economist on NPR saying something similar about not yet hitting bottom, and he got all het up about the notion of taxing rich people, because he felt rich people make jobs with their money (despite mountains of evidence that in fact rich people put their money in Swiss bank accounts and move American jobs to Ecuador or China). He thought that the term "rich people" should be replaced with "scientists, engineers, and other researchers who make the products we buy."
Can I just tell you guys, the average salary of most scientists is about $40,000. The vast majority of scientists are post-docs or industrial bench scientists. Engineers make about $60,000-100,000, depending on what type of engineering they do, chemical engineers making the most. Yes, you read that correctly--we make a lot of complicated, expensive products people buy, we build bridges and oil refineries and computers, and we make about 5% of what a Wall Street MBA makes, when the apparent function of a Wall Street MBA is to drink coffee and run the economy into the ground. Likewise, farmers who make the food we eat, water and sewage workers who keep us from dying of cholera, and textile workers who make the clothes we wear are drastically underpaid in relation to the economic importance of their work. Even doctors don't make all that much money, unless they happen to be neurosurgeons or CT surgeons--your GP or your kids' pediatrician probably makes considerably less than six figures. The people who make the big bucks are NOT the people who actually create new jobs or keep society fed, clothed, healthy and housed; they are the people who got MBAs and plush jobs from Daddy's connections.
The people who come up with new ideas and new products, the people who build the factories to make them, the people who make the factories more efficient, the people who make our world a better place to live, the people who grow our food and refine it and package it and ship it, the people who keep us healthy, the people who make the clothes on our backs, and even their managers who keep the factory running smoothly, the HR folks who hire and fire and keep the factory staffed, the people who run the retail store, the people who are, in fact, creating jobs, are not making six figures. The folks who are making the big bucks, the "rich" people who supposedly have a hand in creating these jobs, are punching numbers into an Excel spreadsheet that tells them they can move the factory to China, cut R&D by 10%, keep prices exactly the same as they were when the factory was in the US, and earn a $500,000 bonus. It bloody astounds me that American economists do not grasp this reality. I know Indian and Chinese economists understand it full well, as they have witnessed the enormous growth in their manufacturing sectors and know exactly whence it comes.
Moreover, I have heard, honestly, the following notions from Ivy League economists, sometimes in the same darn breath:
"The market is efficient, things are worth whatever someone is willing to pay for them...and we think prices are below their actual value as goods." Translation: Up is down, except when we say it's not.
"Inflation is good, but deflation is bad." Price corrections are price corrections, they will always be bad for some people and good for some people. The only difference is, which people.
"Prices always reflect what the market can sustain...except in the case of consumer goods where the prices are set by the retailer and usually never go down once they've gone up." Why is retail a special case? Answer: It's not, but economists don't do purchasing as part of their job description, so they don't know any better.
I'm convinced that ignoring everything economists say and simply giving out mandatory Ativan for all overwrought stock traders will go a long way towards stabilizing the market.
