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True, the national debt has grown by 18.5 percent from 2009 to 2013 under Obama (compared with 20.5 percent growth in Bush’s second term). But also true, interest rates remain the lowest in generations, with no specter of inflation on the horizon.
Meanwhile, the wave of austerity — at the federal level and, especially, in states — has jettisoned more than 2 million jobs from public payrolls and has proved to be a drag on economic growth, the CBO concluded last year. My, my, who could have seen that coming?
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“When economic forecasters find themselves in the unemployment line, at least they know why they are there.”
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In my youth, one of my favorite writers on matters economic was John Kenneth Galbraith, a liberal icon who had taught generations of Harvard students. In the late 1970s, I mentioned that affinity to a gathering of Princeton economists. They were aghast.
“Where are his data?” one professor said with a sneer of condescension. It was the age of econometrics. An economist without a computer model was like a fashion model without high heels.
The high-water mark for economic forecasters may have been in the days of the Carter administration, when any medium-to-large U.S. corporation or bank was eager to find a Nostradamus to guide them through the era of high inflation and rocky financial markets. Fear breeds calls for guidance.
By the late 1980s, the U.S. economy had settled into a comfortable pattern of growth and lower inflation. Many companies started shedding Ph.D. economists from their payrolls. Occupants of the executive suite could buy prophecies from independent economic forecasting firms for less than the cost of an economist on staff.
Plenty of economic forecasters today remain employed, of course. They’ll probably continue to drive economic decisions, public and private.
That’s OK, as long as everyone understands the obvious: To continue could be misleading.
Mike Meyers, a former Star Tribune business reporter, is a writer in Minneapolis.
The Opinion section is produced by the Editorial Department to foster discussion about key issues. The Editorial Board represents the institutional voice of the Star Tribune and operates independently of the newsroom.