…There is an equal and opposite PhD. No matter the field, it seems that every time some very smart person makes a prediction, or some scientific pronouncement, or some definitive statement, some other very smart person makes exactly the opposite announcement or draws the opposite conclusion.
Think about it. Coffee, for instance, is bad for you … but another study shows some health benefits. Man is causing global warming, or the lack of sun spots is causing global cooling, or human beings shouldn’t be so bold as to think they can have any effect on the climate and everything is just a part of a natural cycle … and on, and on, and on.
Today, I offer these competing analyses of the economy.
From today’s online edition of The Business Journal under the headline “Forecast: Downturn likely to run into 2010”:
A closely watched economic forecast from the UCLA Anderson School of Management predicts the U.S. economy is not likely to begin a recovery until next year.
The forecast, released on a quarterly basis, calls for real gross domestic product to decline 6.8 percent in the first quarter of 2009, 4.5 percent in the second quarter, and another 1.7 percent in the third quarter.
But then on a blog I read regularly called “Outside the Beltway” under the headline “Are We Turning the Corner?” …
A couple of weeks ago we received the encouraging news that retail sales for both January and February were 1.8% above December. On Monday the National Association of Realtors reported that February sales of existing homes were 5.1% above January levels on a seasonally adjusted basis. Today the Census Bureau reported that new orders for manufactured durable goods rose 3.4% in February, with new orders for nondefense capital goods up 7.4%. And also today the Census Bureau reported that new home sales in February were up 4.7% (on a seasonally adjusted basis) relative to January. Is the tide starting to turn?
The piece in OTB goes on to offer another opinion about the potential for a so-called “double dip” recession.
So who do you believe? Are we headed for an economic recovery … is it at least in sight … or will it be another year in the economic doldrums?
I think the answer is, no one knows for sure. I saw a commentary by Ben Stein a couple of weeks ago on CBS Sunday Morning that postulated that if President Obama, and Timothy Geithner, and a couple of notables like Warren Buffett were to say the economy would recover in 6 months, there’s a good chance it would be on the road to recovery. There is a body of thought that bad news in the media, or at least more extensive coverage of economic bad news is feeding the lack of consumer confidence in the country. I don’t know how far down the “blame the media” road I want to go, but it does seem that it is more difficult to find good news.
I made a comment to a friend one night over wine and cigars earlier this year that regardless of the outcome of the election, and the recession, that our republic would survive. He challenged me on that assertion, wondering why our republic should survive when history shows that none has up to this time. A difference of opinion, I suppose, but I do hope, that like some banks and car companies, that America is “too big to fail”. One of those economists is right … or maybe there’s a third answer that has this recession stretching out much longer than we expect. The truth is no one knows for sure what the future will bring, and for every PhD, there’s and equal and opposite PhD. THAT’s not likely to change any time soon.