There are loads of jokes about economists, with one of my favourites being:
Question: What do you call a roomful of economists?
Answer: A disagreement.
Now I know I should be doing more interesting things during the holidays than talking about economics, but I just had lunch with a good friend where we ended up talking about about Keynes versus Friedman's economics. And yes, he's still a mate!
Anyways, we both agreed that Keynes will be the clear winner for depression economics over the next year, which means more state intervention in the markets than we've seen for a long time.
Having said that, as Martin Wolf pointed out in the Financial Times two years ago, both economic models work.
One focuses upon state controlled markets and the other upon free market forces. The fact is that either extreme is wrong. You cannot have markets constrained by false barriers, nor can you have markets running wild, unfettered and free. But there needs to be balance.
Speaking of which, this was not meant to be a discussion about economic theories but more about economists who can't agree.
For example, I just caught an article in Reuters and felt quite cheery. The article opens with:
"The U.S. banking sector may be considerably stronger than what
conventional wisdom suggests, and the decline in bank stock prices has
been excessive as many of these stocks represent "excellent" values,
according to veteran banking analyst Richard Bove."
Then I was on YouTube and saw this interview with Jim Rogers:
This was posted on 23rd December and Jim, who is a well-known investor and author, is basically saying things will get a lot worse in 2009 before they get any better.
It just makes me think that there are three sorts of economist.
Those who can count.
Those who can't.