Part of the problem with economics today is a concentration on immediate, in the temporal sense, cause and effect relationships, whereas many of the problems facing us today are not the result of short-term causal relationships that help academics write papers and move along in their careers.
Rather, problems we face now tend to be long-term dysfunctions forced upon market economies by politicians who would rather have economies behave as intended, instead of of behaving as they actually do.
What do I mean?
Well, at the risk of sounding like a one-note player, sub-primes: the idea that you can use raise prices on prime mortgages to pay for the risks of sub-prime mortgages - the logic behind the whole mess - is short-sighted, since what has happened is that the markets adjusted to this brave new world and ruined the lovely scenario that the politicians had thought up. But it doesn't stop there.
Nasty, brutish things, those markets. The politicians are increasingly taking the attitude that markets don't work, that the government has to administer in order to create a more perfect result.
Such hubris, such incompetence: what politicians can't stand is that the markets don't work for them. The only thing the government creates when it gets so intimately involved in the operations of the economy is corruption as the politicians in charge rotate from office to complicit thievery (as getting bonuses for driving Fannie Mae into insolvency should be viewed as) back to office, an eternal cycle uninterrupted by political scandal - as the press no longer dares raise its castrated voice - or opposition, since the Republicans are being marginalized as fast as possible (and to a large degree are either unindicted co-conspirators, truly feckless or simply unable to do more than tilt at the windmills as they go by.
Reading this in today's FT, the final paragraph caught my eye.
"I don't think there is a single serious economist out there saying the dollar's dominant reserve status will be replaced by another currency in the near term," says Mr Adams. "Too many things would have to happen. We would have to really screw up policy over an extended period of time."
Well, this is precisely what is happening.
While readily admitting that hindsight is a bitch worth marrying, policies are indeed being promulgated that, once in place for a number of years, will screw things up royally.
We're on the best way to the Post-American Century, and it's not going to be a pretty place. Lower incomes, lower quality of life, lower expectations (both of ourselves and our children and their children), all for the sake of Chicago politics.
Fasten your seat belts, gonna be quite a ride. Let's talk in five years and see where this has taken us. You will be disappointed beyond your wildest expectations.
Unless, of course, the Republicans can re-invent themselves as the party of common sense and get the message out that they deserve to be re-elected in 2010. Not merely re-elected as "not a Democrat", but actively reinventing themselves to get the country back on keel before foundering.
The silence is deafening.