According to Paul Krugman, economists failed everyone because they couldn’t see the 800-pound gorilla in the room. Economists were too obsessed with the idea of market efficiency, too obsessed with math models, believed in Smith rather than Keynes (basically, economists believed that the government couldn’t and shouldn’t try to address business cycles), and they were too arrogant (while not untrue, coming from Krugman is quite funny).

George Mason University’s Dan Klein responds to the statement by Krugman that there was a consensus among economists against using fiscal policy to fix the economy.

In March-April 2003 I surveyed a random sample of 1000 AEA members. I received 264 non-blank surveys in return (a response rate of 26.6%, adjusting for PO returns, etc.). One item’s exact wording and responses are as follows: Tuning the economy by fiscal policy:
Support strongly 65 (24.6%)
Support mildly 69 (26.1%)
Have mixed feelings 49 (18.6%)
Oppose mildly 43 (16.3%)
Oppose strongly 37 (14.0%)
Have no opinion 1 (0.4%)”

Yet, Klein’s data shows that only 14 percent surveyed strongly opposed using fiscal policy to tune the economy, and 16.3 percent opposed mildly. That’s at best, 30.3 percent. I wouldn’t call that a consensus.

Finally, over at Marginal Revolution, Alex Tabarrok offers his own criticism of Krugman’s article.