"The richest large economy in the world, says Temin, is coming to have an economic and political structure more like a developing nation. We have entered a phase of regression, and one of the easiest ways to see it is in our infrastructure: our roads and bridges look more like those in Thailand or Venezuela than the Netherlands or Japan. But it goes far deeper than that, which is why Temin uses a famous economic model created to understand developing nations to describe how far inequality has progressed in the United States. The model is the work of West Indian economist W. Arthur Lewis, the only person of African descent to win a Nobel Prize in economics. For the first time, this model is applied with systematic precision to the U.S. The result is profoundly disturbing. In the Lewis model of a dual economy, much of the low-wage sector has little influence over public policy. Check. The high-income sector will keep wages down in the other sector to provide cheap labor for its businesses. Check. Social control is used to keep the low-wage sector from challenging the policies favored by the high-income sector. Mass incarceration - check. The primary goal of the richest members of the high-income sector is to lower taxes. Check. Social and economic mobility is low. Check."
All this adds up to a pessimistic conclusion -- recessions just aren’t very predictable from economic data. The reason economists couldn’t foresee the Great Recession isn’t that they’re blinkered or closed-minded or arrogant or stupid -- it’s because no one could predict it, at least not with the kind of macroeconomic data that now exist.
So the future of macroeconomic forecasting -- and of macroeconomics itself -- might lie in a different direction than the one most researchers have been pursuing. Instead of focusing on consumption, investment and other easily measurable things, economists might try thinking more about subtle, long-term buildups of problems in financial markets.
While Smith doesn't put it this way, this is a pretty good argument for why we should pay more attention to economic history (one cannot do much better than reading Kindleberger to understand the dynamics of financial crises - even with no DSGEs in sight).