New poll: Should economists have been able to predict the global economic collapse?

I've added a new poll (see sidebar):

It's been a year since the global economy imploded -- an event that was largely unpredicted. Did economists drop the ball?

• No, economics is too complex and susceptible to sudden trends
• No, economics is not an exact science, but the discipline needs to steadily improve
• Yes, economists are clearly asleep at the wheel and barking up the wrong trees
• Yes, but let’s not overstate the degree to which this could have been predicted

Feel free to add alternative perspectives to the comments.

Big Three in big trouble? Too bad.

I was hoping to say something original and provocative about the Big Three’s recent attempt to get a government bailout, but I’m finding myself drawn to the ‘survival of the fittest’ camp. It sounds like they could use a shake-up; the North American auto sector has had this coming after years of mismanagement and ambivalence to customer needs.

This isn't as big a deal as they're making it out to be. These companies aren’t going anywhere in the long-term. North Americans will still need cars once this awful recession is over. And once the dust settles, auto manufacturers will emerge from this crisis leaner and meaner than the bloated incarnations they are now.

Moreover, people need bailouts, not corporations. The government should save the money they would otherwise waste on these companies and spend it to support those people who are about to lose their jobs. Giving the Big Three a wad of cash would only result in a retrenchment of the current paradigm. What’s needed is a complete collapse so that the auto sector can reinvent itself for the 21st century.

It sounds heartless and Darwinian, but it’s true. Recessions and shake-ups happen because corporations that work within uber free markets cannot self-regulate. The banking/credit crisis has proven this. Capitalism works to eat itself, which is why we get correction periods every now and then. The current recession is merely the elastic band swinging back from its over-extension.

Back from America; some observations

I just returned from a quick three-day trip to Sunnyvale, California where I attended the IEET's Global Catastrophic Risks symposium and Convergence08. Both events were a great success and very well attended. I hope the organizers do it again next year.

A couple of quick observational notes about the United States:

The U.S. recession is worse and far more pervasive than I thought.

Listening to the various conversations this past weekend I realized how widespread and severe the current recession is. People were talking openly about unemployed family members, lost savings and devastated stock portfolios. There's a lot of dread going around.

It's not nearly this bad in Canada, so I've been somewhat sheltered from the reality.

And driving through Silicon Valley I saw signs of the recession first-hand. The light industrial areas were sprinkled with office buildings that had 'for lease' signs posted out front.

But that said....

Americans have Obama fever and they have it bad.

And I think this is good. I can't remember the last time I heard so much optimism from my American friends and colleagues. Everybody is projecting and hanging their hopes on the incoming administration; they're all abuzz with anticipation.

People, whether they're doing scientific research, advocating for more progressive public policy, or simply looking to see something done about the economy, are planning for change and rejigging their agendas accordingly. It was very exciting to see and hard to not get caught up in all the excitement. It's as if a straight-jacket has been taken off the U.S. public.

And lastly, I love the attitude in Silicon Valley. Never mind the influence of the current state of the economy or Obama, I know from past experience that the people in Silicon Valley simply think differently.

It's more than just a tech-sector or a place to work. It's where people genuinely feel that unique and advanced technologies can and should be brought into the world -- and that they are the ones who can make it happen. Silicon valley imbues a sense of wonder and possibility.

And it's the only place in the world where the word 'Singularity' is practically in the vernacular; you say it and nobody even blinks.