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Good economy, bad economy

Scott Jagow Jul 14, 2009

I keep reading such wildly divergent predictions about where the economy is headed, I honestly don’t know what to think. Let me give you some examples.

From the Wall Street Journal:

U.S. Treasury Secretary Timothy Geithner and U.K. Chancellor of the Exchequer Alistair Darling said Monday that global efforts to stem the financial crisis are starting to take hold and should soon lead to economic growth.

There’s a very good chance the U.S. and world economy will recover and see growth over the next few quarters, Mr. Geithner told reporters in London.

From a Forbes column today:

Our forecast for the second half of this year and all of next year is that real (inflation-adjusted) economic growth is going to average more than 4% at an annual rate, well above the consensus, which expects below-trend growth of about 2%….

For the consensus forecast to remain at 2% real GDP growth, there must be some very, very pessimistic assumptions out there. We wonder what they are.

Well, let’s see. Mortimer Zuckerman, editor of US News and World Report, lists 9 reasons to be pessimistic:

About 40% of U.S. workers believe the recession will continue for another full year, and their pessimism is justified. As paychecks shrink and disappear, consumers are more hesitant to spend and won’t lead the economy out of the doldrums quickly enough.

And from Politico, the President’s economic forecasts have been far too optimistic:

… a series of POLITICO interviews in recent days with independent economists of varied political stripes found widespread disdain for Obama’s first round of (economic) assumptions, with some experts invoking such phrases as “rosy” and “fantasy.”

In the sum total of my reading, I would tend to be a shade on the pessimistic side, perhaps quite a bit more than a shade. My own personal mindset is probably — prepare for the worst, hope for better.

But as far as all these economists and pundits (and Treasury Secretaries) giving their predictions, I think The Onion is the one that gets it:

New Live Poll Allows Pundits To Pander To Viewers In Real Time

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