Ever wonder why the economic experts never seem to change, keep coming back, despite racking up such shattering failures as the housing bubble and the financial crisis and the bank bailouts? Ever wonder why a guy like Larry Summers gets to be chief economist at the World Bank, then gets to deregulate Wall Street, then gets to bail Wall Street out, then almost gets to become chairman of the Fed, and then gets to make sage pronouncements on the subject of — yes — inequality? It’s for the same bad reasons: because DC worships expertise and because Summers, along with a handful of other geniuses, are leading figures in a professional discipline dominated by what a well-informed observer once called a “politburo for correct economic thinking.”
Some people are ignored in this town even though they are often right while others are invited back to the Oval Office again and again even though they are repeatedly wrong — and the reason is the pseudo-professional structure of the consensus. No one has described how it works better than Larry Summers himself. “I could be an insider or I could be an outsider,” Elizabeth Warren says Summers told her, back in the bailout days.
“Outsiders can say whatever they want. But people on the inside don’t listen to them. Insiders, however, get lots of access and a chance to push their ideas. People — powerful people — listen to what they have to say. But insiders also understand one unbreakable rule: they don’t criticize other insiders.”