Greg "Farewell to Alms" Clark thinks that the days of $500,000 academic economists are over. (You knew those existed, right? Well, they do, as mad as it might seem.) The prior salary moonshot was partly a function of increased demand through more recruiters and a certain amount of voodoo, but all of that has passed, for two main reasons:
- Almost no academic economists [ed., Roubini and a few others aside] predicted the world-wide downturn.
- The debate about the bank bailout and the stimulus package have revolved around Econo 101 issues, showing the absence of consensus about pretty much anything in economics.
Just as everyone’s interested in economics, and the subject of macro in particular has become highly relevant, it has become obvious how little is settled in the field. The field itself is in major upheaval, or would be, were it not that so many of its denizens are tenured bluffers. Clark gives the following amusing example:
Recently a group of economists affiliated with the Cato Institute ran an ad in the New York Times opposing the Obama’s stimulus plan. As chair of my department I tried to arrange a public debate between one of the signatories and a proponent of fiscal stimulus — thinking that would be a timely and lively session. But the signatory, a fully accredited university macroeconomist, declined the opportunity for public defense of his position on the grounds that "all I know on this issue I got from Greg Mankiw’s blog — I really am not equipped to debate this with anyone."
It’s make me shudder. Then again, I’ve been arguing this same point for some time, that an appropriate response to much of modern macroeconomics is nihilism (e.g.,"First, We Kill All the Economists"). Enough about me, however. Are the days of top-earning economists over? Is the voodoo gone?