Economics is the ‘dismal’ profession, but no one has ever considered why this is so. One has to consider the basic conditions of Journalism to understand: ‘Who’, ‘What’, ‘When’, ‘Why’, and ‘How’. Economics will always be able to tell you what happened to whom, make a good guess of how it came about, and cannot pin down When even after the fact. It is why I enjoyed this piece on Nouriel Roubini. I share the sentiment of Anirvan Banerji that Roubini stares into the Dark Side. Jeffrey Sachs and Stephan Mihm claim that Nouriel could be optimistic, even though they cannot cite evidence of that Truth. Proclaiming a Recession could be Right almost 11% of the Time, all dependent on how One makes the Claim. Predicting a Boom may give One a 90% Average, depending on exactly when you make the Predictions. The Economics stuff is too easy, so I will predict something else: Humanity will suffer another Ice Age before humanity leaves this World–Date optional! Let the Doomsayers top that!
Tim Harford suggests Wine connoisseurs taste the Price-tag with the Eye, rather than the juice with the Tongue. He hints that there may be something illicit about buying the cheap stuff, but as long as you don’t pour it into fancier bottles, you remain well within the bounds of decorum. There has even been a California Bottler who made a fortune injecting Grain Alcohol into grape juice at Six-Pack prices; tried the Stuff, but will stick to my Chevas. Tell people that they are supposed to like you for other things than just your Money!
I cite reference to this Piece because of its importance to just Anyone who has ever been engaged in Management of any type. I would first note that Economists adopt ridiculous Names just to embarrass me, in any attempt to provide them with honorarium of no Pay. The second, most important aspect states that Management must set Deadlines well in advance of the mandatory Schedule, in order to stay within the Time-frame of the Schedule. Time Overruns are the source of Cost Overruns, and Downtime is the bane of Management. Your Boss may come out and witness 90% of your Crew idling, while One is working incredible hard! The Boss will do something Stupid like Fire the entire Crew, rather than the hard-working member; who could not get his Work done according to Schedule. lgl
1 comment:
As someone who was in attendance at the first IMF meeting in Sep. 2006, I’d like people to know that Roubini thought recession imminent based on his view that the economic environment at the time resembled 2001. In 2007, however, U.S. growth accelerated to a four-year high. Growth that was even faster than the Eurozone, which many applauded at the time.
A summary of that meeting is available for all to read (see last page, “Meet Dr. Doom,” http://www.imf.org/EXTERNAL/PUBS/FT/SURVEY/2006/101606.pdf)
To be fair to Banerji, he started out with Geoffrey Moore at Columbia U. in 1986 and as far as I know, hasn’t made false recession call, but has correctly called the 1990, 2001, and 2008 recessions. Roubini does seem to be swinging for the fences most of the time, and he’s struck out almost every time. Finally, he connects in 2008, like a fly ball bouncing off an outfielder’s glove for a home run. If we only began keeping batting average score in 2005 he’d be batting .250 at best with one successful recession call this year while missing in 2005-07. Banerji boasts a perfect 1.000 (a dangerous record to have) having correctly called the last three recessions without crying wolf in between.
Another way of dealing with the same issue -- over the past four decades, since the early 1970s, recessions, on average, happen every five years. So, if you’ve been pronouncing recession for four years, it should be no surprise if a recession does finally arrive.
On the one thing Roubini was right on in late 2006, the danger posed by the housing downturn, Banerji was in complete agreement on, and complimented him on “challenging a complacent consensus”.
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