Among economists, I’ve often seen this odd idea that “there is no such thing as a bubble.”

While I understand their arguments just fine, I think they are dangerously delusional and since their analysis is limited to economics only — and not sociology or psychology — they (as usual) miss the largest components of what defines, gives genesis to, and deflates a bubble environment.

(As an aside, an indictment of our university system is that it is both too broad and too narrow: too broad in the sense that there is never any unification of fields, just a bunch of disparate electives with no connective tissue, and too narrow in the sense that when a person specializes they focus on one tiny little area and believe by organizational imperatives that nothing else is or can be important. Hence, our modern economists who only can see economics, and a narrowly-defined spreadsheet-fuckery-focused physics-envying economics at that.)

Working backwards, that bubbles cause harm* proves that something unusual and undesirable was occurring. Does one really need other proof? Or is this just assumed to be the normal operations of capitalism?

If you accept the DSGE as some from of truth, then you must arrive at bizarre conclusions that countervail reality as Sumner does.

Nowhere are so many economists so clueless as they are about bubbles. It’s like reading writings from an alien.

Also, the argument that a bubble did not really exist because prices eventually recover — well, that’s about the level of argumentation of a second grader. In other words, all’s well that ends well is not really an argument for anything, it’s more an argumentum ad magicum

*And if you don’t believe the bubble of 2008 popping caused great harm, well, I got nothing for ya.