Robert J. Shiller is one of the most prominent American economists and is one of the 100 most prominent economists in the world.
Shiller recently confirmed two points that alternative financial writers have been making for years:
(1) Mainstream economists don’t pay any attention to bubbles – even though bubbles always burst, causing recessions or depressions
( 2) People are in an extend-and-pretend environment, trying to paper over the severity of economic problems and kick the can down the road
At the Buttonwood economics conference a couple of days ago, Shiller said:
“Look up ‘bubble’ in an economic textbook and it’s not there.” (Referring to the shortcomings of the traditional economic curriculum.).
People “are living in a ‘pretend-and-extend’ environment, waiting for the economy to recover.” (Referring to the precarious state of the commercial real estate market and the wave of resets coming due between 2011 and 2013.)
While criticism of American economists’ blind spot towards bubbles may be news to Americans, even BIS and the head of the World Bank have previously slammed the Federal Reserve for blowing bubbles and then trying to clean up the mess once they burst.[Quotes and related parenthetical comments are both courtesy of Michael Panzer, who attended the conference].