In case you haven't read it yet, I recommend you check out Paul Krugman's piece in this past weekend's Times Magazine on the state of the economics field as a whole in light of recent events.
Here are my thoughts, reprinted from an email to some physics classmates of mine from college:
I kind of see (in line with Krugman) economics having an identity crisis on continuum from physics to engineering to meteorology.
Meaning, the freshwater guys are like physicist in that they prefer purest approaches. The New Keynesians are more like engineers, where they do the best they can with assumptions and simplifications and so can do amazing things in the real world (like getting humans to the moon and back). Finally, the behaviorialist and their emerging colleagues are more like meteorologists, who can never really say what the weather's going to be next month with any real degree of certainty.
The question is then how do we make serious economic policy, just as how to we make serious weather and climate policy, such as where to store snow plows and salt, when to cancel school, and where to reinforces levees and dams. It seems that reasonable degree of conservatism would be helpful in both the economic and weather-related policy making world, given the current levels of uncertainty in even the best methods.
The other amazing thing about the more classical economists is not just that they believe that monetary policy is worthless, but that some even believe that the fiscal multiplier is near 0 (meaning that private demand reduces in exact response to fiscal stimuli). This seems absurd to me in the real world, given time lags and confidence boosters associated with a stimulus.
Finally, one note that Krugram didn't mention, is that Princeton has actually just hired a few freshwater economists. We'll see how that goes.