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Economists Stymied as Reality Bears Little Resemblance to Theories, DP

"The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. . . . Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." - English economist John Maynard Keynes (1883-1946)

WASHINGTON — Almost everyone wants the world's governments to do more to revive ailing economies. No one wants a "double dip" recession. But what more can governments do? It's unclear.We may be reaching the limits of economics. As Keynes noted, political leaders are hostage to the ideas of economists, and economists increasingly disagree about what to do. Granted, the initial response to the crisis probably averted a depression. But the crisis has also battered the logic of all major economic theories: Keynesianism, monetarism and "rational expectations." The resulting intellectual chaos provides context for today's policy disputes at home and abroad.
By Robert J. Samuelson, June 27, 2010  The Washington Post

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