Thought of the Day - Economics Books

I was at the airport last Friday and i noticed in the business section there were a glut of new economics books which i would suggest are probably a result of the success of Freakonomics. Whether these are new books written because of Freakonomics or whether they are old and have just been made more popular by the success of Freakonomics i'm not sure.

Within these books there seemed to be 3 distinct categories:
1 – Economics can predict the future well – I did have an example however i can't remember the title or author, just that the cover was orange.
2 – Economics can explain the past (in an interesting way) – Freakonomics by Stephen J Dubner or The Economic Naturalist by Robert H Frank
3 – Economics can't predict anything well – Fooled by Randomness by Nassim Nicholas Taleb

To be honest i am rather cynical about the first group, they argue that if you have a good enough model and enough computing power you can predict anything. I would argue that there is far to much randomness to come up with anything better than a guess. The only situation where these models are likely to be accurate are when they are self-fulfilling prophecies; i.e. the models predict a recession, the economists preach a recession, so sure enough there is a recession when there might not have been one otherwise.

For the second group, just about anyone can explain things retroactively, but i will admit that economists do have some interesting explanations.

The third group on the other hand have a lot of valid points, no matter how good the model is you can never be certain. We live in a Quantum not Newtonian world, everything in life is probabilities.