From the cover of a NCB Stockbrokers report on the Irish economy in March 2008: The UK Rolls Royce is knackered while the US pink Cadillac is clapped out, as the Irish Póg Mo Thón is steaming ahead!

European Central Bank President Jean-Claude Trichet, said in Dublin this week, that the great Irish playwright George Bernard Shaw was not at all impressed by the economics profession. His was the famous disparaging remark that "if all economists were laid end to end, they would not reach a conclusion." Certainly in these very challenging times, it is not easy for all economic policy-makers to reach agreement on the way forward, Trichet said. It certainly can be confusing for the public, when the Irish media allocates the tag "leading," or "top" to economists it quotes, whether they are idiots or not.

Economics is regarded as a science but in contrast with the hard sciences, where the term "scientist," cannot credibly be used, just on the basis of a university degree, the term "economist" is available for both excellent researchers, inspiring teachers, the writers of client newsletters at banks and economics journalists. In the age of celebrity, where self-promotion via the media seems to be a sine qua non of status, the shill for the property industry may be better known, than the best economists in the country.

"I have also learned," said President Barack Obama in his speech to a joint-session of the US Congress this week, "that hope is found in unlikely places; that inspiration often comes not from those with the most power or celebrity, but from the dreams and aspirations of Americans who are anything but ordinary."

Joseph Stiglitz, Noble laureate in economics, excoriates the economics profession and Wall Street's plutocrats, who have been shown to be Idiots of the Universe, rather than its masters, as lauded in Tom Wolfe's 1987 novel Bonfire of the Vanities. However, Stiglitz is not shy about promoting his own self-interest and apart from a generally uninspiring performance, the only thing I can recall from his Geary lecture, which was sponsored by the Economic and Social Research Institute (ESRI) in Dublin, in 2006, was the number of times he had plugged his latest book on globalisation. So caution is required, as it can be a case of the pot calling the kettle black arse - - even though on a different scale.

Veteran Australian journalist and former Political Editor of The Sun-Herald, Alex Mitchell,recently wrote: "For many years it was my conscientious belief that the worst practitioners in the media were celebrity reporters who did little more than rewrite press handouts supplied by agents for limelight-seeking B-grade actors and pop stars.

I've now revised my views and am convinced that the media's bottom-feeders are the economics writers.

In so-called normal times, these erudite commentators wrote very little and not very often. Indeed, they rarely came to work and weren't seen around newsrooms. They sat at home in their book-lined studies mousing their way through international websites looking for ideas for something to write about.

Having plagiarised a letter from The Economist, an editorial from the Washington Post, an article from the Far East Economic Review or the in-house report from a leading investment bank, they appeared in print, glowing with wisdom.

But when the world economy turned nasty, these charlatans and hucksters were quickly unmasked and regular reporters started asking each other: has that bald-headed egomaniac on three times my salary got any clothes on or not? Answer: No!"

I'm not sure, that I would fit Mitchell's characterisation as a "bald-headed egomaniac" but I appreciate the point about sourcing ideas from websites, without attribution!

I am indebted to New Zealand-based Hugh Pavletich, co-author of the Annual Demographia International Housing Affordability Survey, for alerting me to the blogof contrarian economist, Prof. Steve Keen from the University of Western Sydney.

Prof. Keen writes: "My railing against the economics profession on this blog might give you the impression that I'm a lone wolf, taking on the economics profession single-handedly. I'm pleased to say that's not the case; though the rebels are outnumbered by the True Believers in neoclassical economics, there are many academic economists who are critical of the economic orthodoxy.

Recently some highly regarded economists have made this emphatically clear with an eloquent and well argued document entitled The Financial Crisis and the Systemic Failure of Academic Economics."

The academic economists say in the cited paper: "In our view, economists, as with all scientists, have an ethical responsibility to communicate the limitations of their models and the potential misuses of their research. Currently, there is no ethical code for professional economic scientists. There should be one."

In Ireland, during the property boom, a small number of financial services' economists, provided the intellectual underpinning for the ignorant politicians, who ran the Irish economy into the ground.

The chief Svengali was Dan McLaughlin of Bank of Ireland, who as recently as 2007, expressed puzzlement with claims, that Irish growth was unbalanced. He said a glance at the data from 2001 to 2006 shows average GDP growth of 5.3%, with all components growing in a 4.5% - 5.5% range. He should have looked beyond the cheerful figures. The Reality Check was that an economy powered by construction and American firms who were responsible for 90% of Ireland's exports, was exceptionally vulnerable to a US downturn. See here for further detail on the Irish Svengalis.

This week, Pat McArdle, Chief Economist at Ulster Bank, who in 2004 said in relation to the Irish housing market - - "We have to question why we have generous tax breaks for a market like this." - - highlighted how it would require even a cancellation of the capital programme, to restore stability to the Irish finances, without tax increases.

Eunan King, former Chief Economist of NCB Stockbrokers, wrote in The Irish Times, on Saturday, that domestic demand is central to the solution of our current problems, not exporting and competitiveness. Increasing taxation rather than cutting Government expenditure threatens already weakened domestic demand.

King wrote, that the main contribution during the boom years to the growth in employment came from the increase of almost 500,000 engaged in the service sector, of which construction added over 140,000. Services expanded as the domestic market grew, fuelled by rapid growth in numbers aged between 15 and 64.

On March 12, 2008, King wrote in The Irish Independent that the Government should do little and say less. Panic measures are the one sure way to cause the crash we want to avoid.

It was advice that was well received!

In a report published by NCB on March 11, 2008, King argued, that the boom in Ireland was based on a sharp rise in the population of working age from the mid-1990s, not on developments in the housing market. The story on the report in The Irish Independent on March 12, 2008 was: Worst of building downturn over -- top economist.

King said:"Another argument put forward in support of the poor outlook for the Irish economy is that there is significant exposure to slowing growth in the US and the UK.

However, this should not have a material impact on Ireland. This is because the internationally owned companies in Ireland employ fewer than 100,000 people out of a total of 2.1m in the economy.

While these companies dominate export growth, they are also very large importers of material inputs. Thus their contribution to the economy is, for the most part, limited to the numbers they employ directly and the taxes paid.

In summary, the housing market does not appear likely to crash."

The Irish Independent wrote in an editorial, that King's article "reminds us of a venerable maxim, too often forgotten. One should never confuse cause and effect. It is particularly relevant at this juncture.

If the explosion in house-building and property prices had created the Celtic Tiger boom, the current troubles in the property market would give substance to the belief that the Tiger had been killed. But the Tiger created the property boom, not the other way round. Right now, it may well be that the correction in the market has already worked and that supply and demand have reached equilibrium, with prices somewhat lower than at the height of the fever."

Cause and effect indeed!

The NCB economists were hooked on what was termed the "demographic dividend" and they appeared to have believed, that domestic demand was self-sustaining - - this was at a time when Irish banks were increasing foreign borrowings to feed the credit boom - - Trinity College economist Patrick Honohan said in 2006 that Irish banks' borrowing from abroad to onlend to Irish residents soared from 10 to 41% of GDP between 2003 and 2005. Also in 2006, Ireland's biggest bank AIB, sold part of its Dublin headquarters to developer Seán Dunne and a report by NCB Stockbrokers argued, that Ireland's favourable demographic profile would benefit the country's economy over the following 15 years.

The report - called 2020 Vision Ireland's Demographic Dividend- said the population of the Republic would grow by 30% to over 5.3 million by 2020, and to six million by 2050. It says immigrants could account for a fifth of the population by 2020.

NCB economists Dermot O'Brien and Eunan King said the population between the ages of 15 and 64 would rise by 700,000 in the next 15 years. "Sustained strong growth in the labour supply will maintain a capacity for growth in Ireland that will far outstrip that in other EU countries where the demographic outlook is much less favourable," the report argued.

The US high-tech boom coupled with the availability of a skilled workforce had triggered the Celtic Tiger in the early 1990's. By 2004, the Economist Survey of Ireland, was warning, that the property threat to the economy, meant that the Irish banking system was heavily exposed and a property crash would badly hit the balance sheets of the two big Irish banks, AIB and Bank of Ireland.

In Ireland, the property boom powered job creation but jobs in the key exporting goods and services sectors stagnated.

SEE: Irish full-time employment in manufacturing and internationally traded services fell 10,297 in the period 2000-2007 while the total workforce expanded by 605,000

Direct employment in construction rose from 126,000 in early 1998 to 282,000 in December 2006.

So while the Svengalis highlighted migration and its impact on housing demand, they were silent on the message from the upward trend in vacant dwellings.

The CSO said in an analysis of Census 2006, that there were 266,000 vacant dwellings in 2006 representing 15% of the total housing stock.

Of these, 175,000 were houses, 42,000 were flats and 50,000 were classified as holiday homes. County Leitrim had the highest percentage of vacant dwellings (29.3%) while 11.7% of dwellings in Dublin City were vacant at the time of the census.

There were 140,000 vacant housing units according to Census 2002.

The blindspot in the vision of the likes of Eunan King, was looking at the demographic issue in isolation, which led to the idiocy of arguing, that Irish exports were of little consequence for long-term prosperity.

Africa and countries such as Pakistan, also have demographic dividends!

In Eunan King's March 2008 report, he forecast, that the Irish economy would grow by 3.5% in 2008. He said the risks to this forecast, were on the upside: "Current indicators of employment and consumption remain strong, despite weakness in the housing market since late 2006. In 2009 we would expect GDP growth to move up to about 4.5%, closer to potential. The housing market was not central to the boom in Ireland."

On a global scale, Harvard University historian Niall Ferguson, recently wrote in an article titled The Great Repression:"It began as a sub-prime surprise, then became a credit crunch and is now a global financial crisis. At last month's World Economic Forum at Davos there was much finger-pointing - Russia and China blamed the US, everyone blamed the bankers, the bankers blamed everyone - but little in the way of forward-looking ideas. From where I was sitting, most attendees were still stuck in the Great Repression: deeply anxious, but fundamentally in denial about the nature and magnitude of the problem.

There were the people calling the bottom of the recession by the middle of this year. There were the people claiming India and China would be the engines of recovery. There were the people more worried about inflation than deflation. And, above all, there were the people trusting John Maynard Keynes would save us. I heard almost no criticism of the $US800 billion ($1.2trillion) stimulus package then making its way through Congress (and mutating as it went into something more like a pork barrel). The general assumption seemed to be that practically any kind of government expenditure would be beneficial, provided it was financed by a big deficit."

Prof. Ferguson says there is something desperate about the way people on both sides of the Atlantic are clinging to their dog-eared copies of Keynes's General Theory. Uneasily aware that their discipline almost entirely failed to anticipate the crisis, economists seem to be regressing to macro-economic childhood, clutching the multiplier like an old teddy bear.

"The delusion that a crisis of excess debt can be solved by creating more debt is at the heart of the Great Repression. Yet that is precisely what most governments propose to do," he says.

So given that even in a small economy, economists such as Pat McArdle and Eunan King, could have such opposing views on how Irish policymakers should react to the economic crisis, what should they do?

The ignorant politicians who were either deluded in believing, that they had found the solution to the free lunch or for short-term political reasons, risked setting the economy on fire, should not fall back on the proposals of those among the economics profession, who were their cheerleaders.

At a global level, economists are generally reluctant to stray from the consensus.

On December 1, 2008, the National Bureau of Economic Research (NBER) confirmed, that the US economy entered recession in December 2007.

Prof. Nouriel Roubini of the Stern Business School at New York University, had written in November 2007: "It is increasinglyclear by now that a severe US recession is inevitable in next few months. Those of us who warned for the last 12 months about a combination of a worsening housing recession, a severe credit crunch and financial meltdown, high oil prices and a saving-less and debt-burdened consumers being on the ropescausing an economy-widerecession were repeatedly rebuffed the consensus view about a soft landing given the presumed resilience of the US consumer."

Roubini continued: "When a year ago this author warned of the risk of a systemic banking and financial crisis – a combination of global liquidity and solvency/credit problems - like we had not seen in decades, these views were considered as far fetched. They are not that extreme any more today as Goldman Sachs is writing today on the risk o a contraction of credit of the staggering order of $2 trillion dollars in the next few years causing a severe credit crunch and a serious recession. As I will flesh out in a forthcoming note the risks of such a generalized systemic financial meltdown are nowrising. Hopefully by now some folks at the New York Fed and at the Fed Board are starting to think about this most dangerous systemic financial crisis that could emerge in the next year and what to do to prepare for it."

The consensus is the safety zone for economists but it's time for the brave to assert themselves, in these challenging times and in the future post-recession or depression world.