Who's More Foolish?

Who are the bigger fools? Economists who try to predict the future? Or us for listening to them?

That April 1 query is prompted by Jim Gust's recent post, which mentions Lawrence Summers' prediction of the latest boom and bust. He was right about the bust, just more than half a generation off on the timing.

After the sky did not fall in 1991, Summers must have had some explaining to do. "It’s painful now to read a lecture that Mr. Summers gave in early 2000," writes Paul Krugman in the NY Times. Summers implied the U.S. escaped the crisis of the 1990s because, unlike other countries, we had the benefit of reliable corporate accounting and “well-capitalized and supervised banks.”

Want to celebrate April Fools Day right? Take an economist to lunch!