I like Robert Samuelson’s recent column about the difficulty (impossibility?) of accurately analyzing economic reality, let alone predicting its future. Over the past several months a few people, mistaking me for someone who knows a great deal about economics, have asked what I think about the financial crisis, the stock market, the recession, etc. My response is usually something along the lines of the following: Anyone who pretends to know and understand completely the causes of the economic meltdown and/or how to “fix” it, is either not very smart or is selling something (e.g., political schemes or financial advice).
It is a bitter pill for modern man–maybe contemporary Americans, especially–to swallow, but the fact is we can’t control the economy, even if we have “learned the lessons” of the Great Depression of the 1930s, the stagflation of the 1970s, and the tech bubble of the 1990s. And often enough our efforts to manage and control it aggravate whatever problem we’re trying to address.
Recognizing this truth can be depressing, or it can be freeing.
It’s a reminder to all who are even occasionally viewed, described, or invoked as “experts” always to wield our opinions with humility. It won’t stop us from pontificating, but it should prevent anyone from taking us too seriously.
To substantiate this claim about the ignorance of the experts, here is an enjoyable summary of the worst economic predictions of 2008, courtesy of Business Week. (My fave: “I think you’ll see [oil prices at] $150 a barrel by the end of the year” —T. Boone Pickens, June 20, 2008.)
Here’s to an equally unpredictable 2009.
