We, in the United States, put a whole lot of credence in economists. Why is that? These are the seers into our economic vitality, into our pocketbooks and bank accounts, the keepers of the stories of our destinies of wealth and retirement. These clairvoyants are our layman’s translators to the oodles of data that indicate our financial health.
And the results? These folks are no better than the weather guesser who Monday morning apologized for missing that ‘rouge storm’ over the weekend that caught you and the family outside on your picnic. Now the kids have fevers and you have a cold. Oh yeah, and you have to travel to India this week for work--- fun times with a 30 hour plane trip in a tube of re-circulated air.
Just like weather guessers, our economic prognosticators are correct 100% of the time…. After the fact. How do we define a recession? After we have already been in it. What data do they prefer to use? Lagging indicators. Do they ever say they were wrong? No, just new data came to light that has now been included.
Prime example- our current economic turmoil. Our diviners even had to revise ‘growth’ data after it had been published. (How they looked at data and declared growth, and then a couple of quarters later the same period had negative growth is beyond me. Good thing these folks are not in charge of our corporate financial departments. People go to jail for making ‘revisions’ that large.) Thanks to our leading minds of economic theory and insight, we have now been declared to be in a recession for near a year. If they had gotten it right the first time, we could have known 6 months ago.
Our economists, these smarter than smart folks, missed the signs of our pending risk. Overhyped capital markets. Housing booms across the nation. Inflating prices to unprecedented levels. Rising incomes. Consumer debt levels that rose disproportionately. Yes, I missed those also, but then again, I never claimed to be and economic soothsayer.
So where does this leave us. Who knows? Our esteemed oracles now seem to be all over the weather map. Some are in sunny Florida claiming we are at the bottom, and better times are ahead. Some are in wintry Michigan, saying the next storm is on the horizon.
Oh, I get it. We will know. They will be right in telling us where we are today with our economy…. In about 6 months…. Maybe.