Do We Want Civil Engineers to Predict Bridge Failures?
No. We want them take whatever steps necessary to prevent bridge failures. At least if given the tools and resources to do so. We now have an economist leading the Federal Reserve, and have given the Fed almost unlimited power to print currency and buy tens of trillions of dollars worth of various assets. We have also given them the responsibility stabilizing the macroeconomy using the best economic advice available. Do we really want economists to be able to predict recessions? As James Hamilton noted:
“You could argue that if the Fed is doing its job properly, any recession should have been impossible to predict ahead of time.”
Strictly speaking, Hamilton’s observation only applies to recessions caused by demand shocks, but in practice, supply shocks are also pretty unpredictable.