Since 2008 when the Queen of England asked Economists (broadly defined to include finance professors) why they had not seen the financial crisis coming, trust in experts has plummeted.

However, this decline in trust is misplaced.  What should have plummeted was trust in the credentialed, non-expert class.

Having academic credentials does not make someone an expert.  The Queen’s question highlights this clearly shown by the Economics profession.  Yes, there are a lot of people running around with PhDs in Economics and Finance from prestigious universities.  However, that doesn’t mean they know anything about financial crises like what causes them or how to respond to end them or why our financial system is designed the way it is.

In case you think I am being critical of the Economics profession, I am not.  I am simply stating a fact.

From introductory to graduate level courses in Economics and Finance, there is no place a student is exposed to even the most rudimentary basics required to converse intelligently with an expert on financial crises or financial system design.  Not surprisingly, without an exposure to the basics, nothing changes during their career on their way to becoming a full professor at Harvard or Stanford or MIT or Yale or Princeton or Berkeley …. or becoming a Fed Chairman.  Without an exposure to the basics, even receiving a Nobel prize doesn’t help.

Unfortunately, not understanding the basics doesn’t prevent these PhDs from opening up their mouths and offering an uninformed opinion.  An opinion they will subsequently vigorously defend despite the fact doing so reveals they are Confident Idiots.

Consider, a decade after the acute phase of the financial crisis and the best model the Economics profession has for financial crises says they are triggered by sunspots.  Ok.  It isn’t fair to quote the authors.  They did identify other potential triggers.  However, when you don’t know the basics you don’t know to ask a question like:  is there anything that would explain all of these potential triggers including sunspots?

For a decade, I have explained financial crises in terms even a 6-year old can understand.  Terms which reveal just how much BS the credentialed, non-expert PhD Economists have spewed forth since 2008.  Terms which completely validate the decline and total lost of trust in these individuals.  Trust that should never have been there in the first place.