Fortunately, Economists are getting their due importance in policy making. It's economists who shout both in praise and against all policy decisions of different countries. And at least in a few cases, they themselves get divided in ideas and concepts. Regarding certain policies a group of economists come up with words and swords against another group of economists. Each group depends upon different theories at different times. Basically they keep in mind their own basic view and proceed. For giving stress to their views, depend on theories according to their convenience, that's all.
Economics is supposed to act in such a way to wipe out tear from all the human eyes in the world. It should address the issues of poverty, famine and basic needs. All the theories may be different in ways of action but aim the same target: bring prosperity to human race.
From theories to application - here starts the real game. Economists have made so many jargons familiar to the common man. But what's the end result Did it take us anywhere they planned or predicted This question stands as a very big unanswered question before mankind, especially these days.
In the initial years of the new millennium what the Economic World has been experiencing was boom, boom and boom. The IT boom, banking boom, insurance boom, etc. could be cited as shining examples. Predictions also were aplenty. It was pointed out that the IT boom will stand for many more years. According to economists, banking and insurance were also going to record a trajectory of growth. Many reasons were given numbered one by one to substantiate their point of view. Banking habit is not developed among a large number of people. And an attempt was started by governments of various countries to bring more citizens of theirs to banks. Different packages were announced including zero balance accounts and any time money withdrawal facility. Similarly, it was observed that major chunk of the population remain outside insurance net. Studies were conducted which revealed that there are countries which have only upto a mere 10% of their population keeping insurance policies. Based on these sorts of observations and statistics, so many new economic concepts were introduced by economists. Since the economists were having crucial role in policy making, their views and beliefs turned out to be policies. Political leaderships were depending much on economists in planning future. Since they themselves were ignorant of economic concepts, believed blindly what was advised. There are cases where enough studies were not conducted or even common sense was applied before reaching in far reaching policy decisions. And such policies affected the concerned economy very badly also. Offshoring of jobs is a typical example.
Kathy Sanborn writes: In an article by Paul Craig Roberts ("How the Economy Was Lost"), he explains how the offshoring of jobs helped to create a lower tax base for American communities. Because US workers could no longer keep their IT and software engineering jobs due to 1) offshoring and 2) foreign workers coming in on H-1b work visas, our highly trained technical workers' salaries plunged. In addition, corporations began a mass exodus of manufacturing jobs