In response to an FT article by Martin Wolf on 5th May 2015, entitled 'Why neither main UK party is competent'
http://www.ft.com/cms/s/0/3249930a-f27c-11e4-892a-00144feab7de.html#ixzz3ZId3ke23
"The IMF has changed its view of the past. But nobody had that wisdom before the crisis"
Wrong Mr Wolf. There were economists, analysts, traders and investors who warned very loudly that a crisis was coming, and what effects it would have - they were ignored.
Professor Steve Keen, was one of the very few 'mainstream' economists who made these warnings. In his book 'Debunking Economics' he lists a group of others who shared his concerns and his warnings. These folks came from a variety of backgrounds, but from my perspective at least, they all have one thing in common: none of them think that models of the economy that ignore money, banking and debt, are in any way useful in the real world.
Personally I'd be less polite - they are as much use as a chocolate fireguard.
In my view the predominant economic paradigm is blind. The central bankers and academics that officiate and pontificate their theories have all been to the same schools, had to impress the same 'little gods', and they now all mark each other's homework.
A while back I heard Stephen Roach, former Chief Economist and Chairman of Morgan Stanley, Asia being interviewed about business in Asia. They asked him for a response to a recent pronouncement from Professor Krugman (the usual 'do more, debt doesn't matter, why don't people listen to me' kind of thing he spouts in his NYT column). Mr Roach related a story of how, when running Morgan Stanley in Asia, he was frequently asked by clients to bring pop-star economists along to meetings. He said the problem with this was that academics like Professor Krugman often left his clients with the distinct impression that they 'didn't get it'...the real world that is.
The crisis is not over Mr Wolf, and when the next phase unfolds, probably in the form of a collapse in sovereign debt, the central bankers, vested academics and pop-star economists will all say 'no-one could have seen it coming'. Wrong again. Some people do and they are still being ignored.
The biggest challenge facing mainstream economists right now is the egos of the aforementioned prima donnas - they do not want to admit they might be wrong - they are.