It's always hard to resist the temptation to poke fun at economic forecasters, especially when their exercises in crystal ball gazing are as far off the mark as they have been lately.
Their miscues, however, are really no laughing matter. Not when important government and business decisions must be made on the basis of economic forecasts that are sometimes hard to distinguish from either pure guesswork or downright wishful thinking.As the latest case in point, take the gyrations through which the forecasters have been going when it comes to America's immediate economic future.
A few days ago, the National Association of Business Economists released a survey showing that 75 percent of the nation's top business forecasters believe the economy has tumbled into a recession.
But few of them can agree on when the recession started or on how long it may last and how intense it may be. The answers on when the recession started range from last July to this November. Only three months ago, however, most of them insisted the United States could avoid an imminent downturn even though Iraq had already conquered oil-rich Kuwait. As for the duration of the current recession, estimates range from two months to a year.
So much for the notion that economic forecasting is an exact science. Even so, its practitioners deserve more pity than scorn.
After all, though business cycles tend to follow certain basic patterns, they are extremely complex events composed of myriad characteristics that no computer model yet devised can entirely duplicate.
As one expert has noted, "the economy of goods and services and the economy of money, credit and capital are no longer bound tightly to each other." Instead, they can move in different directions and at different speeds. Because of improved communications, many financial transactions can occur literally at the speed of light. Wars are hard to predict. Meanwhile, international trade keeps increasing as transportation improves. The upshot is that the economy of just about any nation can be shaped by actions taken far beyond its borders.
Despite the many imponderables involved, mankind's fascination with the future means that economic forecasting will always find an audience. So will other forms of fortune-telling.