Short answer, it isn’t important. Long answer, to the extent that economics is an accurate predictor of curative measures for an ailing economy or predictive of ways to improve the economy, it is important. The problem is, for every economic prediction, there seems to be an equal and opposite prediction. Who do you believe? You have heard it all. Taxes slow the economy vs. government spending stimulates the economy. Globalization creates jobs vs. globalization drains away jobs. Budget deficits are a burden on the economy vs. budget deficits are effective at controlling the growth of government, which is good for the economy. On and on.

Economists live in an ivory tower. All economists seem to share one fatal flaw. That flaw is that for all their theories they have an amazingly inadequate stock of proof. Carefully crafted arguments supporting what is hardly more than a belief are their stock and trade.

Belief does not create reality. It can succeed and prosper and color the beliefs of others, but it cannot alter reality. It can make the actions of men irrational, for a time, because reality has a way of re-asserting itself. The belief that we could finesse other countries into surrendering their domestic markets to us by giving our domestic market away to them has, on the bottom line, not made that so.

Even history is of little help. Looking back, depending on whom you ask, Roosevelt either brought the economy out of the Great Depression with the New Deal, or WWII ended it with ramping up for war. As an aside, both were efforts involving huge increases in government spending. Depending on whom you ask, the Reagan administration either gave us the longest peacetime economic expansion in history or a well orchestrated deception that things were getting better when they weren’t.

Technically, economics is too prone to error. Inputs into economic prediction must be derived by closely guarded standards. They are not. If you cook the inputs to suit your desired conclusions, your calculations are trash. Unfortunately for the rest of us, there will always be somebody willing to buy carefully crafted trash. Economics has become a “science for sale”. The highest bidders are people with money and so you get the most visible majority of economists supporting conservative views. This is not to say that their opinions are useless. Because their motives are suspect, they are the perfect barometers for what not to believe.

Economists, and their work, may be the most difficult problem we face as a society. Economics is either the least disciplined or the most politicized of all the “sciences”. When you look at the spectrum of opinions offered by economists, you have to wonder how people studying the same subject can come to diametrically opposite opinions. It is as if astrophysics had competing views of whether or not the world was flat. And yet the opinions of economists have had a huge impact on the course of our lives. To overcome my discomfort with this, I suggest that in the future, all economists must wear a warning label: “this opinion is brought to you by the sponsor name here”.

Continued…How do you create jobs?

Ethics are the real problem here. So, it is a deeply seated societal issue that can only be improved through teaching ethics and holding our leadership, both public and private, to higher standards. I don't mean that if a person has every sinned that they cannot offer an opinion. In fact the opinion of a person of experience is doubtless more trustworthy. The experiences of liars are lies. You have to ask the question, is there an Easter Bunny or were there WMD in Iraq?