Economics has been called "the dismal science," and I think I know why.
I have never read a nongovernment economic forecast that was cheerful and optimistic. Have you? Has anybody?
Economists who work for the government at a policy level sometimes put out optimistic statements under pressure from their political bosses. But an economist who follows his own professional inclinations almost alway sees gloom-and-doom adhead.
And we newspaper people write stories and headlines that emphasize the direst aspects of these forecasts.
If the population is growing, our analysts worry that the economy will not be able to provide jobs for all the new entrants into the labor market. If population growth slows a little after an upsurge, the economy is sure to stagnate. After all, where will business and industry find enough new customers to sustain their growth?
Higher inventories mean businessmen are stuck with goods they can't sell. Lower inventories mean businessmen foresee a recession and are getting into a liquid position.
More installment credit means the bubble will soon burst; consumers who are overextended and can't meet their payments will have to stop buying. Less consumer credit is a sure sign that people have already stopped buying, and the sky is probably falling. We'll all starve.
Nothing that happens is ever seen as a positive development. If interest rates go up, they threaten to choke off a sputtering economy. If interest rates don't go up, the money supply increases and inflation threatens to choke off a sputtering economy.
Any time an economic statistic fails to reach a new high, it is mandatory for all nongovernment economists to sound the alarm that this may be the beginning of the end. All graph lines must point straight up, quarter after quarter, year after year.
And now even new all-time highs are sometimes taken to be indications of imminent collapse. If the increas isn't quite as much as some hoped or expected it would be, the economic alarm bells begin to toll in mournful cadence. The headlines don't tell us the economy has grown, they say, "Growth Slows." The end is near. General Motors sets a new record and the stock goes down.
Most experts forecast what will happen in six months or a year or two.By the time months or years pass, most people forget what the prediction was, so the experts retain their expert status. (However, we might note in passing that economist J. A. Livingston used to keep track of what his colleagues predicted and then run a tally sheet on them afterward. The majority opinion almost always turned out to be wrong.)
The experts who try to predict what the economy will do in the short term are the ones who really end up with egg on their faces with regularity, despite their best efforts to hedge their predictions and write sentences that can be interpreted more than one way. Stock market analysts who try to out-guess day-to-day changes are prime examples. You could flip a coin and do as well as some of them.
After last Thursday's trading in Wall Street ended, one respected daily analyst wrote in his syndicated column that Fed Chairman Miller had "hit the bond market with a devastating triple punch: intolerable interest rates, credit crunch, intensifying inflation." The Fed itself added "another psychological depressant - a staggering jump in the seasonally adjusted money-supply figures" announced on Thursday afternoons. Wall Street "tried to shrug off the bad news," he said, "but the future of the stock market is being made in the bond market, which is a shambles." The next day, when this analysis was published, the market shot up 15 points.
Frankly, fellows, I'm getting awfully tired of reading that everything that happens is another nail in our coffin.
If you say it often enough and loud enough, you're eventually going to talk us into a depression - all because our free enterprise economy depends on confidence and you don't have any.
So why don't you please stop exaggerating every negative development? Try going an occasional thought to what's right about an economy that has been strong enough to survive and prosper in spite of your dire predictions.
And don't forget that this economy has also been strong enough to pay most of you a handsome wage for being wrong more often than you're right. Doesn't it get any Brownie points for that, at least?