Topic: Monetary Policy
NABE Outlook: Not A Good Indicator of Economic Recovery A report out today from the National Association of Business Economists says that the worst is over and our economy will start to recover this year. Can we trust the evaluation of these economists?by Walt Thiessen
(libertarian)
Wednesday, May 27, 2009
A panel of 45 leading economists at the National Association of Business Economists (NABE) issued a report today which suggests that the worst of the recession may be over, with even the most pessimistic saying that the recovery will begin by early 2010. CNN among other news outlets quotes NABE president Chris Varvares saying in a written statement, "The good news is that the NABE panel expects economic growth to turn positive in the second half of this year, with the pace of job losses narrowing sharply over the remainder of this year and employment turning up in early 2010."
The CNN article also says, "Almost three out of four survey respondents expect the recession will end by the third quarter of 2009."
Reason for optimism? Probably not. I did a little digging and found another CNN article from one year ago in May 2008 where they shared predictions from this very same group. Of course, one year ago the financial crisis had not hit yet. Fannie Mae and Freddie Mac were just beginning to show signs of a complete meltdown, but no one was talking bailout just yet.
By contrast, what did NABE's stalwart economic experts have to say about the economy one year ago?
"A survey to be released Monday [May 19, 2008] by the National Association for Business Economics found a majority of economists now believe the economy is in a recession or will be in one this year. A February survey found a slight majority still expecting to avoid a recession.
"The latest survey also found and that forecasters expect unemployment to continue to rise, but that they believe the economy has already weathered the worst of the housing downturn and credit crunch." (my emphasis)
So while they finally figured out three to five months late that the economy had entered a recession, they also figured it would all blow over soon. They completely missed the financial collapse upcoming in the Fall of 2008. These same geniuses regularly advise our press and politicians, who depend on them for regular insights from their short-term crystal balls.
The current predictions from the NABE, therefore, deserve to be treated as the wildly optimistic guesswork their history suggests to be their pattern.
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The views expressed in this
article are those of Walt Thiessen only and do not represent
the views of Nolan Chart, LLC or its affiliates. Walt Thiessen is
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employee or otherwise affiliated with Nolan Chart, LLC in his/her role as a columnist.
Walt, thanks for pointing out what a waste of time the NABE is. I am beginning to think more than the weatherman gets paid, despite their accuracy.
There is simply no recovery in a capitalistic system without profits. Profits are continuing to shrink. Beating estimates does not equate to higher profits.
Everything the current administration has done so far has not improved potential for profits. The case can be made that the economic decisions will continue to erode profits.
And if we get the VAT being discussed today by one of the Emanuel Brothers, who has a direct connection to Obama, we may not see a true recovery for years.
You cannot wish yourself rich, thin, or into a growing economy. But they keep trying!
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