Are the experts ever right?

I still remember back in the 1970s when the news was filled with stories about a $50,000 study to prove the breast milk was good for babies.  For those of you too young to remember, back in those days, $50,000 was a lot of money.  Also, back in those days, there remained a few old-style media men who weren’t completely in thrall to the wonders of academics and experts and who could laugh at their excesses — and expect us to laugh as well.  As it was, though, I’m beginning to think that one of the great virtues of that study was that it was obvious from beginning, to middle, to end that the expert prediction was going to be right:  Mom’s milk was predicted to be good for babies and, by gum!, it was.

Maybe all these experts should stick to costly lactation studies because they seem to be wrong about every other damn thing they stick their noses into.  I won’t rehash global warming with you, but I will point out it came from the same expert line of thought that predicted global freezing in the 1970s.  I’ll also be polite enough to mention only in passing all those experts who assured us right up until the end of 1989 that the Soviet Union was monstrously strong and unlikely to collapse for any reason.  And we’ll just pretend it was a little mistake when foreign policy experts opined heavily that Iraq could not be won and that the Surge would be a disaster.

Today’s news again forces us to face just how inexpert those so-called experts are.  Given that the world is in a economic down-spiral because of the gloom-and-doom predictions emanating from experts, those same “experts” deserve to be slapped silly for overstating economic problems, thereby giving rise to even worse financial panic:

Steep slide in U.S. Economy, but Not as Dire as Forecast

The United States economy shrank at its fastest pace in a quarter century from October through December, the government reported on Friday, in the broadest accounting yet of the toll of the credit crisis. Consumer spending and business investment all but disappeared, and economists said the painful contraction was likely to continue at an alarming pace well into the summer.

The gross domestic product — a crucial measure of economic performance — shrank at an annual rate of 3.8 percent in the fourth quarter of 2008. The decline would have been much steeper — more than 5 percent — if shipments of goods had fallen as sharply as orders did.

What’s amusing is that at least one expert is spinning the story again (and I say this without any personal animus to the named expert, since I have no idea who he is, what he knows, or how prescient he has been):

“The difference between 3.8 and 5.1 percent is the inventory buildup,” Nigel Gault, chief United States economist at IHS Global Insight, said. “My only explanation is that companies could not cut production fast enough.”

With inventory accumulation gone, the economy will contract in first quarter at more than a 5 percent annual rate, Mr. Gault predicted.

I know I’ll forget to do so in three months, but it would be interesting to see whether Mr. Gault’s prediction proves right this time around.

As I grow older, I become less enamored of Franklin D. Roosevelt, since I’ve come to understand how disastrous his financial policies were.  Nevertheless, he was a great leader, a true statesman, and he understood one of the key tenets of a stable society:  “The only thing we have to fear is fear itself.”  Panic and despair are bad government

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Comments

  1. says

    Economic cycles are arguably being made more severe by positive feedback loops created by media and by various “experts.” (The use of the term “positive” here has nothing to do with goodness, but rather refers to a system which is in essence a vicious circle.)

    During the boom days of housing prices, I don’t remember seeing very many articles suggesting that a pattern of 10% annual increases, going on forever, was unlikely to be sustainable. Such media/expert behavior would have created *negative* feedback and helped to stabilize the system. What we have instead is the throwing of gasoline on fires and the pouring of water on people who have just been rescued from drowning.

  2. says

    What, then, can we say were the lessons of Nuclear Winter?

    It showed that the Soviet Union were very adept at infiltrating and subverting American intellectuals. The USSR’s methods only became more refined as time went on.

    The political consequences of public fear of Nuclear Winter was always in the concrete form of dismantling America’s nuclear weapons deterrence and the hamstringing of American leadership concerning first strike and retaliation policies, including future research and development on ballistic nuclear missiles.

    The fact that this would cripple America’s ability to build nuclear power plants, thus making America rely on foreign sources of gasoline and natural gas (which includes Russia), were purely serendipitous side effects from the USSR’s viewpoint.

    France, a far more socially leftist nation than the US, has plenty of nuclear power plants. You think this is cause they had better leaders? No, what they had was a lower priority for the USSR.

    And so, in this elastic anything-goes world where science-or non-science-is the hand maiden of questionable public policy, we arrive at last at global warming. It is not my purpose here to rehash the details of this most magnificent of the demons haunting the world. I would just remind you of the now-familiar pattern by which these things are established. Evidentiary uncertainties are glossed over in the unseemly rush for an overarching policy, and for grants to support the policy by delivering findings that are desired by the patron.

    But of course, it is the Republicans that are the reactionaries of this villain piece. We are not the Luddites. We are the ones against science. We are supporters of “cranks” like Sarah Pallin.

    Haven’t people realized by now that whenever and whatever the Left accuse us of being, they were already there first?

    Is this the new McCarthyism-coming from scientists?

    Another sucker of the Soviet disinformation campaign.

  3. Bill C says

    During the boom days of housing prices, I don’t remember seeing very many articles suggesting that a pattern of 10% annual increases, going on forever, was unlikely to be sustainable.

    Then you don’t read my blog, Brain Droppings, which Bookworm has linked for your convenience. /shameless plug

    I have been pessimistic about the economy and screaming about the housing bubble since early 2005. The Austrian school of econ is pretty clear about what happens after profligate credit expansion: Boom—>Bust. It isn’t a conservative or liberal position to believe that the Federal Reserve has been very wrong and that we have a lot of deleveraging to go before this is over. As for the medias ability to talk down the economy, I am skeptical. We have a huge economy and I think the vast majority of business people do not make decisions based on the nightly news. That being said the drumbeat of an on message media can move public opinion. The question is how much and for how long.

  4. Tiresias says

    Regrettably though, Bill, the government itself does have the ability via negative feedback to damage the economy.

    As witness the politician’s and media’s yelling about George Bush “talking down the economy” when he was running for office in 1999.

    Is not Barack Obama “talking down the economy” by telling us it will get worse, and the problems will go on longer…

    Oh. Yeah. I forgot. Wait a minute – it’s only “talking down the economy” when a Republican does it.

    Sorry… mea culpa.

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