You Say No One Predicted this Financial Crisis?

It’s popular for pundits on TV to remark that no one predicted any of this. (Recall that 94% of them aren’t economists.)

Here’s a good one: Larry Summers predicted something like this 20 years ago. Is he no one? That’s just for starters.

I think if we put our aluminum foil hats on to filter out the garbage, and wrote down what we thought of a statement like “no one predicted this” coming from someone paid to make predictions, we’d probably come up with two points: 1) someone did predict it, and 2) it wasn’t the person talking.

Having said that, forecasting the economy isn’t easy, and each recession is different from all the others, so a lot of this is akin to predicting that the Jazz will win the championship this season … at the beginning of every season.