Why I make economic predictions, and why I smell like a bear and brag about it
Some people predict the economy is going down in order to sell gold. I call them the “gold bears.” Others make economic predictions as a way of guiding people in their stock or bond investments. They are the golden calves of the Wall Street bull. I have completely different agenda than either.
The gold bears and the golden calves
The gold bears constantly predict economic collapse, so that it is always the right time to buy gold bars. When the economy does go down after five to ten years of constant growling, they let you know they told you so. They may just be the broken clock that is right twice a day. They have cried “wolf” so many times, however, that many investors now look at gold as an inferior metal, which only conspiracy theorists buy as bricks to build their radiation-proof bunkers. The heavenly alignments, though, are in favor of the gold bears right now, even though the bears have long been the minority voice.
The problem with the golden calf majority, on the other hand, is that they see stars when they look at Wall Street. Love blinds them from seeing downtimes or Wall Street wrongdoings with any clarity. They are obsessed with Wall Street money and idolize the people who have it due to years of bubble-building that created long runs to success. That success is deemed as proving these people are right, even though they have missed every prediction they’ve made for four years and running now that things aren’t running there way anymore.
The calves are wishful that the long runs continue, so they sing the hallelujah chorus every time the bull raises its head. They are easily convinced by all the easy-money bubbles over the last thirty years that we’re in for another bull run … because that’s what we do. When the bull lays its weary head back on the ground, instead, the golden calves mull about, murmuring amongst themselves about what happened to their “recovery.” They are actually silly enough to believe we’ve done things that could cause a real recovery because we have listened to a lot of their bull.
My self-serving economic agenda
Confidingly, I’ll tell you that I have a somewhat bearish nature. By that, I mean that I often find I am more willing than most to see bad news. I don’t just mean to read or hear it, but to anticipate it and to see why it is coming. I know there are many people who will never have interest in what I write because they are not wiling to hear what they regard as bad news. I’m not a pessimist. It is just that right now, reality happens to look like a bear’s world, and there are a lot of people who don’t want to face such grim facts.
I am not, however, running gold investment services that drive me to predict bearish economic events. I am also not one of the conspiracy lemurs who share the night with the bears. You know them: the ones whose eyes bulge at every possibility of government wrongdoing. (I tend to hold most conspiracies at arm’s length because they smell funny.)
So, while I am brutish regarding the markets, I do not regard myself as one of the bears. I simply have the right nature to be able to see well in this present darkness, which happens to be a good time for bears, as it is for me. The nearsighted bears roam the night because they can follow their noses to the golden honey. I, on the other hand, am more of a lone owl, flying above it all with an eye suited for dark times and really no interest in what gold does. I am more interested in picking out the individual rats that creep through the moonlit fields and lifting them up in my talons to expose them.
You may see ads from time to time on this site for either gold or for stock market investments or bonds, but I do not choose those ads. I only get involved as far as blocking companies if I see them pop up and know they are bad or hate what they stand for. Otherwise, I am too focused on my writing and reading to spend much time selecting ads. The ads rotate all the time based simply on computer algorithms that place them on sites have content best suited for specific ads, so I often do not even know they have been on my site. I DO personally select the book ads based on writing that I think viewers of this site will enjoy or that I think add understanding to our economic situation because providing useful content is my biggest agenda item. This can generate me some income while helping you find more good reading. So, it’s a win/win.
With that said, let’s turn a magnifying glass on my selfish agenda. If I am going to be a purveyor of truth with a clear eye toward reality, as is my goal, I’d better be honest about this: I aim to make a good living off this site, but my goal is to do it by providing rock-solid content. Because I saw very few people writing accurately about what was happening in our economy, I came to believe I could do better. That meant there was a niche I might be able to fill.
In downtimes, such as we are in, my own economic concern was to find a focus for my labors that will continue to bear fruit no matter how bad the economy gets. Being bearish on the economy for many reasons, anyway, I decided there was nothing more suitable for the times than actually writing about the nighttime economy, as few seem to have the eyes to see clearly during this time. One who can, should be able to profit off the times as somewhat of a guide through them.
Fortunately, this selfish agendum also works in your interest: I believe, if one provides interesting content and solid, accurate predictions, there is some hope one can build an audience. A large audience is always enticing to advertisers, so it always has economic potential. Building that audience will not happen as easily or as quickly as many bloggers think it can. I know it will only happen if the economic predictions I venture out on can stand the test of time and if my writing is interesting to people. That’s why I keep my predictions posted long after I’ve made them and point out whenever they become right in order to show they are standing the test of time so far. Because I keep them posted, right or wrong, you can check my track record.
I know that most of the world is not interested in reading about economics and there are numerous economic/financial pages to read everywhere, so success is not assured. I have to keep striving for the goal of useful and interesting content, which is in your interest as well as mine. So, we have a mutual interest. Writing for a down economy may be a niche worth exploiting, but it’s no slam-dunk. Since I have no gold to sell, I will only do well if YOU decide my economic predictions and commentary are worth reading. I can, in other words, only do well by serving your interest.
Why do I boast about my economic predictions so often?
This is where I come to my more interesting agenda, which have nothing to do with making money. I am tired of the many daytime creatures who keep talking as if they can see in the dark. I want to pull their audience away from them because they are misleading the world down the primrose path of destruction.
I underline the failures of the world’s bullish economists in order to undermine the unfortunate influence these narcotically influenced economists have. I do so in hope that the opiated masses might start to see the gravity of our situation as it truly is and not see the economy as they wish it to be. Because I know most people will not listen to bad news, my only hope of getting them to listen is to be accurate in predicting economic events. When these things come to pass, some people may remember where they heard what they didn’t want to hear.
Why is this important? It is vital. Only when we see reality as it is can we deal with our problems in the creative way that will bring about major changes that are needed for a sustainable recovery. Until then, all recovery is a mirage. All talk of it is foolishness because we are far from doing the things we need to do to have a sustainable economic recovery.
The longer it takes the public and our leaders to “get real,” the less likelihood there is that we will be able to manage the changes that are necessary to create a solid economy, for we are consuming our opportunity to do so. We are rapidly expending our economic resources and energy in the wrong directions. We continue to push our problems straight ahead into ever higher mountains of debt, rather than to the side. Thus, we only pile them up ahead of us until they become impossible to push.
The reason I speak so brashly about my own predictions is to fly in the face of the experts — to show people that the experts know very little. I know it looks arrogant, but I keep flagging my predictions for attention, hoping people may start to turn away from the languid voices of the expert economists when it becomes clear that they consistently miss seeing things that should be obvious to them if they are the economic experts everyone believes they are.
Let me give you an example:
Larry Kudlow with his smug little smile is the resident economic expert on CNBC. He hangs with the right crowd and is listened to by millions; but I cannot remember ever hearing Larry predict a major economic downturn accurately. Still, he retains an enormous following. Recently, he spoke for the credentials of another economist who has a large following. Larry was upset on April 27th with the U.S. Treasurer for blasting one of Larry’s colleagues, so Larry came to the rescue:
[Timothy Geithner] recently fired a broadside at top-Romney economist Glenn Hubbard, who is presently dean of the Colombia Business School…. Geithner said, “That’s a completely made-up, remarkably hackish observation for an economist.” Hubbard a hack? Besides running a highly respected Ivy League business school, he was the chairman of President George W. Bush’s council of economic advisors. He also earned his Ph.D. in economics from Harvard. But Hubbard is advising Romney, and before that he counseled Bush, so the very political Mr. Geithner blasted him as a hack.
You see, that is exactly the problem with the way people think. It is all about credentials and alliances. Larry is a Republican to the core, so he defends Hubbard — a Republican’s economist. If Hubbard really knew how to advise, clearly we would not be in this mess, because he had, as Larry almost manages to point out, years as Bush’s chief economic advisor to see this coming and steer us away from it! Obviously, he failed to do so. So much for his advice. Complete failure, however, apparently doesn’t matter. All that matters to economists like Larry Kudlow is the importance of Hubbard’s position, his past credentials, and hist party alliance.
Many people look at things the same way Larry does, placing all their respect in creeds and credentials. I want to break that up by making it really clear how poorly people see when they just follow their party dogma (be it Republican or Democrat) and pay too much respect to pedigrees. Larry has seen poorly. The people he admires have seen very poorly. And the people who follow Larry will see nothing at all. The way to prove that is to make the predictions Larry and his ilk are unable to make and then call attention to how they missed it. That way, they cannot just say, “We are human. You cannot expect us to see the future.” When the future is a freight train screaming down the tracks you’re standing on with its whistle stuck, you should be able to see it!
Another issue I have with economists is their utter lack of courage in a time when we need great courage. Here’s another example from Larry Kudlow’s show:
After declaring that the world was in a state of “late Great Depression” on Tuesday, renowned Yale economist Robert Shiller hedged his words. “Did I say that? Well, I think there are a lot of analogies to what we’ve been going through to that of the Great Depression, but I don’t really think we’re in a depression, so I might have said it slightly wrong.” Shiller, co-developer of the Case-Shiller index on housing trends and author of “Finance and the Great Society,” said that while the United States wasn’t in a recession, certain elements of the economy resembled one.
Shiller was on the show because he has the credentials, but he backs down from calling our economic crisis a “great depression” to saying it is not even really a recession. These guys lack the conviction to stand on their own statements as quickly as they make them, lest they be held accountable. I, on the other hand, have said to friends who regaled me for it, “This IS a depression,” and I’ve said so from the very start. I hold that line, even at times when it appears for a few months that we are recovering.
In this economy, we need people with with clear vision and courage to speak against the flow
The immediate goal of my predictions, then, is to demonstrate that these events that surprise so many experts can be seen before they happen. They have a clear line of cause-and-effect if people are willing to ditch their dogmas and take their truth straight up. Thus, I wave my hands and say, “Notice what is being said over here! I want you to take note of it, even though you won’t believe it.” I say this so that, when it happens, the expert economists are without excuse this time. They can be shamed by someone who is not an economist in terms of credentials but who knows how to see economic reality.
Perhaps a trickle of attention will come this way, which will become a small brook and eventually a noisy stream. The purpose of that is to erode the attention away from the wrong voices. We have for decades now followed economic policies that are driven by greed, waste, short-term, short-sighted focus, and political dogmas that people embrace with religious zeal.
Until people recognize the true nature of this widening, deepening depression that we call “The Great Recession,” they will not yield their vaunted beliefs. I realize people will have to experience the failure of those beliefs before they will turn from them. Even then, many will find other beliefs to blame. Democrats will continue to blame Republicans and Republicans, Democrats. The greed that caused our society to allow banks to become too big to fail will never fall away until the banks do fail. There are too many very wealthy people wanting to keep that corporate gigantism in place for it to give up. It is the way of the world and will continue to be until it utterly fails.
My hope in the middle of that cacophony of greed is that the few small voices that continuously speak from principles that yield accurate predictions as to where the economy is going will eventually find enough of a following to strip the current leaders of the majority audience they need in order to continue with their ways when the old economy lies dying, unable to get up another time.
So, I pound my drums to get a little attention because very few are looking in this direction. Most are mesmerized by the credentials and not interested in a new voice. But have the PhD’s predicted anything right yet? Did they see clearly enough to steer us away from this mess with all their politically correct, tax-break ideals? We’ve had, for example, nearly a decade of the Bush tax cuts, which are solely intended (on the face of every presentation) to help the “job creators” create jobs. When you’re ready to drop your own dogma, you’ll recognize that ten years is more than enough time to know that this clearly has not worked. Where are the jobs? In China?
Bush took a surplus government and bankrupted it. Obama has merely repeated the Bush formula for recovery — bail out the big banksters so they don’t fall on everyone. Why? Because neither have ideas of their own, and they’re both listening to people they deem experts based on credentials. There is no job growth. There is no recovery. My only credentials will be my ability to accurately see (as you can, too) what they have failed to see and to boldly speak it in the face of their rosy pictures of economic recovery … a recovery that somehow always seems to be just a few more months away.
So, if you read something here and go away because you hear what you don’t like, just remember when it comes about where you were when you heard that it would.
See you again soon.
On the other hand, if you already believe the kinds of things you find predicted here, they will seem to you to be self-evident. Just note that they obviously are not for most people, or you’d hear them everywhere. You’ll be glad to have found one of the few voices that is concordant to your own.
See you again soon, too.