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Economists have lost the trust of politicians

It’s always good to read/see/hear Stephanie Flanders. Here she asks why politicians no longer have a favourite economist, in the way that Margaret Thatcher liked Milton Friedman and John F Kennedy admired John Kenneth Galbraith.

In one sense, this feels like a concern I have been reading about for a decade or two. But it also feels like an extension of the more recent phenomenon of refusing to listen to experts.

Nevertheless, there are some real questions for economics to answer. Why does it not have the influence today that it enjoyed in previous decades?

We’re also hearing mainstream economists talk more loudly about the possibility of shifting the balance back toward labor with wealth taxes and reduced taxes on earned income. That’s a big shift for a profession that seemed to think until recently that reducing the tax on capital was always and everywhere a good thing. It will be interesting to see how long it takes for an elected politician to decide that any of this advice is worth listening to.