The experts have been asking these exact same questions for at least five years, maybe longer.

At a certain point any unbiased critique would have to conclude that the experts either don't care what the answer is (in which case they aren't experts at all), or they are completely incompetent (in which case they aren't experts at all).

Take for example, this classic moment from last month.



When will people finally start getting meaningful pay raises? Jerome Powell, the chairman of the Federal Reserve, had no satisfactory answer. Powell acknowledged that he couldn't say for sure why wage growth remains generally tepid. He said he "certainly would have expected pay raises to react more" to falling unemployment. "So it's a bit of a puzzle," the chairman mused, somewhat philosophically. "I wouldn't say it's a mystery. But it's, it's a bit of a puzzle."

The banker that all other bankers listen to can't explain something critical about the economy.

That's forgiveable if this was a new trend, but it's not.

June 2018, Bloomberg:



The Mystery of Puny Pay Raises

Economists are stumped: When the economy is this good, wages should be rising much more.

December 2017, CNBC:



"The lack of wage growth at the aggregate level despite the declines in the unemployment rate and strong job gains remains a mystery," Joseph Song, U.S. economist at Bank of America Merrill Lynch, said in a note to clients.

May 2017, Bloomberg:



The U.S. economy is behaving mysteriously. Usually when the job market is tight: Employers have to pay more to attract and retain workers.

October 2015, NY Times:



The Mystery of the Vanishing Pay Raise

Many economists don’t expect real wages to pick up until the job market tightens further. Federal Reserve officials hoped wages would begin rising at today’s 5.1 percent, but economists are increasingly saying the rate might need to fall to 4.9 percent or lower to push wages higher (although some fear that inflation will climb if the jobless rate is that low).

November 2014, Atlantic:



Three theories about today's biggest economic mystery: If unemployment is shrinking, why aren't wages growing?

And that's just wages. Economists are equally stumped by the labor participation rate and lack of inflation.

Politico: The mystery at the heart of the 2017 economy

FinancialTimes: Nobody seems to know why there’s no US inflation

2015, WSJ: U.S. near full employment, but inflation hasn’t risen as predicted; Fed officials can’t figure out why

Year after year, economists are mystified about why the economy doesn't act the way it's supposed to.

Yet there is no attempt at re-examining basic assumptions about capitalism.

This is a full decade after the near universal failure of economists to see the 2008 Crash coming.

In February 2008, with the economy already three months into recession, Federal Reserve Chairman Ben Bernanke and Treasury Secretary Henry Paulson testified before Congress that "the nation will avoid falling into recession."

The Council of Economic Advisors estimated the economy would grow by 2.7% in 2008.

It wasn't just Bernanke and Paulson.



Economists – as reflected in the averages published in a report called Consensus Forecasts – had not called a single one of these recessions by April 2008.

But hey, who could have predicted a recession in 2008?

It was impossible.

That's what we've all been told.

Oh, wait. 77% of regular working people without degrees in economics predicted it.



Only 19 percent of 1,000 Americans surveyed believe the nation will avoid a recession, while 57 percent believe that there will be a downturn this year. Another 19 percent believe the nation is already in a recession.

This survey came out three weeks before Bernanke and Paulson testified before Congress.

So Joe Blow Average can identify what the economy is doing and where it is going better than nearly 100% of economists.

How is that possible? Let's put it delicately.



Economics is driven by ideology – it is ideology, not science, which drives them to assert that bank bailouts are tolerable but policies that protect the poor aren't. Unsurprisingly, these flawed theories and models are a great comfort to financial elites – which is why so many economists are hired and funded by big banks, corporations and the wealthy

This ideological pandering to the wealthy (i.e. selling out) manifests itself in a way so that levels of private debt is not even considered in any economic model. And why should it be a problem when you approach the world from the point of view of a banker?