Tuesday, November 08, 2005

The headline for an article in the Peoria Journal Star on 11/05/05 page C2 reads “Jobs rebound falls short.”  The subheading declares “U.S. economy struggles to regain footing after Hurricane Katrina.”  My conclusion after reading the article: another misleading headline.  The U.S. mass media in general and the Peoria Journal Star in particular seem to enjoy misleading, pessimistic headlines.

The number of additional jobs fell short.  Fell short of what?  Why, “falling well short of the roughly 100,000 jobs gains many economists were forecasting.”  What did they fall short of?  They fell short of a prediction!  Please tell me how many in percentage terms “many” is?  Please tell me why one would base a conclusion on a prediction?  

Being an economist does not automatically mean you can accurately determine how many jobs will be created in a given month.  They aren’t all that accurate over a span of time let alone month to month.  Do the readers of this garbage realize how often these people are wrong?  Maybe, just maybe, it was not the job growth that was falling short.  Maybe, just maybe, it was the prediction that fell short.  The story assumes the predictors have some unknown capacity to predict with unfailing accuracy.

In the 1990’s, I was the church treasurer for our local congregation.  One of our elders, before he retired, was the manager for the General Motors owned Hughes plant in Tucson.  One day we were talking in the church office.  He said what I had been saying for years.  In this case we were talking about stock brokers, but I believe the same holds true for economists who try to predict how the economy is going to do in advance of the actual facts.  He said that if stock brokers could predict with a high degree of accuracy how a group of stocks would perform in the future, they would not waste their time being stock brokers.  They would make all the income they would ever need by just following their own predictions.

Think about that.  If they were as good as they think they are; they don’t need your investment money.  The same holds true for those who predict how the economy will do.  To base a conclusion on a prediction is economically speaking absurdly ignorant!    


Post a Comment

<< Home