A dismal outlook for dismal scientists

Justin Lahart reports in today's Wall Street Journal that employment for economists is falling below trend. That is, there appears to be a widening output gap - the difference between the actual hiring of economists and the hiring that could be achieved if people still believed that economists knew what they were doing.

Job Market for Economists Turns ... Dismal
The dismal economy has claimed yet another victim: jobs for the economists who study it.

Columbia University's economics department, for example, isn't making any new hires this year. That's in stark contrast to last year, when Columbia poached eight economics professors from other schools, and hired one economist out of graduate school. The University of North Carolina at Chapel Hill, Amherst College and the University of Minnesota all have suspended their searches for economics professors. And Harvard University has gotten permission to hire just one person -- only after "many rounds of negotiation," according to Harvard economist Lawrence Katz, who is handling recruiting this year. Typically, Harvard hires two or three economics professors out of graduate school.

The hesitancy to add staff is completely understandable.

It's akin to what medical schools might do if they woke up one day and realized that people are now dying because of what they've taught doctors over the years.

Much sought after, high paying positions at investment banks and hedge funds are, understandably, drying up now that the entire global economy is in the tank.

That's probably a good thing - idle time often results in introspection.

The rollback comes at a historic time, as economists struggle to explain the worst financial crisis since the Great Depression. The crisis, which few economists saw coming, revealed deep gaps in many of the standard ways that economics approaches the economy, driving home the need for fresh thinking and talent.

I'll go ahead and say what Justin was too polite to utter, speaking directly to new-grads:

Much of what they taught you in school is apparently wrong - otherwise, we wouldn't be rapidly approaching what looks to be another Great Depression.

The inability of economists to pull their noses out of academic papers and statistics and to look at the real world has been a major cause of the ongoing crisis, yet, by and large, you still don't have a clue.

Here's just one example.

Wake the f#@k up!

What was perhaps most distressing about this entire article (which is in the public area of the Journal and is well worth reading in its entirety) is that, apparently, economics professors are among the highest paid staff at many universities with average annual salaries of $86K for new hires.