PLATFORM:People are fed up with the dismal science and need accurate forecasts from our economists, writes SHEILA O'FLANAGAN
THESE DAYS I have a lot of friends who are ex-bankers. Or ex-brokers.
Some of them now feel relieved at being ex. There was no sympathy forthcoming while they still had jobs in the financial services industry; now that they’ve finally been culled they can get on with their lives. Although, as one said to me, walking in to a job interview and saying that you once worked in a bank doesn’t always hit the right note straight away. Not, of course, that there are many job interviews going.
Recession is a time when many people are forced into making career changes and when jobs which previously weren’t seen as glamorous take on a new importance. Ever since the financial storm first broke, dealers and analysts have been shoved ignominiously out of the way to make room for the new stars. For so long the backroom boys and girls of the markets, economists have hustled their way forward as they are called upon to explain our current financial crisis and give us their best estimate of when we emerge from the gloom.
The reason economics is called the dismal science is because almost every economist I know is more comfortable with worst-case scenarios rather than the more optimistic possible outcome. Having lost their way to unreasoned optimism over the boom years, they have now rediscovered their souls and reverted to type. Which is a good thing.
You can’t afford to have cheerful economists, it’s against their nature. Now they can indulge to their hearts’ content in the worst economic crisis since the 1930s. Each economics editor is vying to be the one to reveal the latest in bad news, to tell us how severe our penance has to be for our flirtation with the good times. For most of them, the idea of a return to growth is practically against their moral principles.
However, it’s possible that the tide has turned for the economic profession now that George Lee has taken the plunge and decided to become part of the problem rather than simply a commentator on it. The sign of a good market participant is in getting the timing right.
Enter the market before the hordes, exit it before them too. Is it the case that people are now fed up with the purveyors of the gloomy science? Have we overdosed on economic commentary? And has George effectively called the beginning of the end by his switch to politics?
Unfortunately, even if we are in the region of the beginning of the end, there is still a long way to go and still a lot of opportunity for economists to beat us with the big stick of depression. The media is complicit in allowing them to stand centre stage as they hold up our current circumstances for incessant scrutiny.
What we really need from economists is accurate forecasts for the future. But the truth is that most of them merely explain where we went wrong in the past.
There are always a few ahead of the curve – and to be fair, George Lee was one of them – but, like a battered shareholder who can’t bring himself to sell, most economists grimly churn out the same stuff, convinced that one day they’ll be right. And eventually, like the stopped clock twice a day, they are.
Obviously, for those of us living in the real world, economic predictions are important but getting on with our lives is even more so. Yes, we know that times are tough because we can see it for ourselves. Yet while nobody can help but feel anxious during difficult times, there are still plenty of people looking to find opportunities no matter what the circumstances.
I recently attended two different events for women in business: a cross-Border networking lunch on International Women’s Day and a Women’s Executive Network breakfast held in Dublin. Women have never been as adept at networking as men and it has taken a long time for these type of events to be given the respect they merit. On this occasion, at both events, the women attending were aware of the challenges that recessionary times brought, but they were equally aware that good business models could survive.
In fact some of the speakers had set up businesses in previous recessions and were reaping the benefits of their experience of tight controls on all areas of their operations now. Most agreed that your business had to have a focus, a reason for being there in the first place. And although it was about making money, it was also about the passion to succeed.
And fortunately a passion to succeed is something that even the most dismal economist can’t take away from us.
www.sheilaoflanagan.net
