5 Powerful Men Who Were Catastrophically Wrong About the Economy—But Reaped Rewards Anyway

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Santelli’s not above a fib or two, if that’s what it takes to hide his poor track record. In another bad Santelli prediction, he said the Fed’s moves in 2009 would be extremely inflationary. They weren’t. Santelli’s response? “I never said it was about inflation,” he claimed recently. But Business Insider reviewed the recording in which Santelli said, quote, “ of course it’s about inflation.”

Whoops. Professor Krugman bemoaned the inflationistas for what he calls their “stunning lack of menschlichkeit.” That’s a Yiddish way of saying “what a bunch of jerks.”

Santelli and his mean-spirited friends on that Chicago floor screamed at homeowners, “Losers! Losers! Losers!” They might have been talking about the success rate of predictions made by Santelli and his ilk.

Conclusion: How to Succeed in Economics by … er, Totally Not Succeeding

This is, by necessity, only a partial list. Space limitations prevent us from recognizing all those who are qualified for recognition in this category. But honorable mentions go to Alan Greenspan, Bill Clinton, Robert Rubin, the editorial board of the Wall Street Journal, the editorial board of the Washington Post, your tipsy uncle at last Thanksgiving dinner, and all the fine folks who worked in risk management on Wall Street without noticing that something was seriously, seriously wrong.

Some risk managers did notice, and warned their bosses, only to see their careers stall accordingly. This is dedicated to you, the unsung heroes of finance, and to the many economists who continue to make sound predictions, regardless of the price they pay for it.

But we’re not just here to complain, are we? What must we do to change the culture of the financial and economic professions? That’s a vital and urgent mission, and it’s good to know that people are working on it in brilliant and imaginative ways.  

So thank you,  Institute for New Economic Thinking, for your tireless and high-minded work on improving the nature and quality of the economics profession. We hope that more of us can join you on the high road, and soon. After all, criticism of others only offers a starting point. Building new and more effective models is the real and important work of the future.