They got everything wrong:
Economists on the Run
Paul Krugman and other mainstream trade experts are now admitting that they were wrong about globalization: It hurt American workers far more than they thought it would.
Paul Krugman has never suffered fools gladly. The Nobel Prize-winning economist rose to international fame—and a coveted space on the New York Times op-ed page—by lacerating his intellectual opponents in the most withering way. In a series of books and articles beginning in the 1990s, Krugman branded just about everybody who questioned the rapid pace of globalization a fool who didn’t understand economics very well. “Silly” was a word Krugman used a lot to describe pundits who raised fears of economic competition from other nations, especially China. Don’t worry about it, he said: Free trade will have only minor impact on your prosperity.
Now Krugman has come out and admitted, offhandedly, that his own understanding of economics has been seriously deficient as well. In a recent essay titled “What Economists (Including Me) Got Wrong About Globalization,” adapted from a forthcoming book on inequality, Krugman writes that he and other mainstream economists “missed a crucial part of the story” in failing to realize that globalization would lead to “hyperglobalization” and huge economic and social upheaval, particularly of the industrial middle class in America. And many of these working-class communities have been hit hard by Chinese competition, which economists made a “major mistake” in underestimating, Krugman says.
It was quite a “whoops” moment, considering all the ruined American communities and displaced millions of workers we’ve seen in the interim.
The major issue with Krugman is not that he was wrong but that he was maliciously incorrect: he made his entire fame and fortune around being wrong about, well, everything.
The issues of globalism were ever-present and just as obvious back then as they are now. The only reason the free-trade economists seem to be jumping ship is because it’s becoming embarrassingly obvious how poor globalization benefited their host countries.
The crux of the issue revolves around the “either or” view of trade. It is framed as though someone must either be 100% in favor of free trade or a protectionist. This is a false assumption.
One can hold a “strategic” trader viewpoint: where a nation utilizes free trade when it benefits them and enacts protectionist policies when it benefits them.
Which should be the policy of any sane nation: do what is best for the nation.
China, and many other similar countries, use this approach. They use our “free trade” mindset and pin it against us while using their own strategic approach.
Full protectionism is moronic. Full free trade is equally as much. The best approach is somewhere in the middle.
But the most troubling part is at the end of that previously cited article:
Hence, economists themselves are surprised at how quickly the mainstream of their profession has moved leftward—as many of them found at 2019’s conference on inequality. And when it comes to 2020 U.S. election politics, the profession is much more with progressives like Elizabeth Warren and Bernie Sanders, some of the participants said, than the centrist Joe Biden—open to radical solutions that give back bargaining power to labor (for example, Warren’s proposal to give workers a large place on corporate boards). “I came here as a French socialist, and now I find I’m in the center,” joked former IMF chief economist Blanchard.
Which means their predictions and “advice” are only going to get worse.
The further left economists go, the deeper in the loony bin we all go.