Predicting the Economic Forecast
Predicting the Economic Forecast
What Economists and weathermen share in common is our ability to make forecasts for the future. Where we differ is in the sad fact that weathermen tend to be more accurate and uniform in their predictions. I believe I can say this with more of a vein of truth then sarcasm. Back in the good old days of 2007 while lecturing at college and discoursing with the business community about the upcoming economic debacle. My predictions fell on deaf ears, and harsh rebuttals from the business community stating that I was a doomsayer, and the American economy is too solid to fail because we are number one.
Recently while going through my personal archives I came across an article from January 2008 written by Marc Goloven, cited in the article as “one of the region’s best-known economic analyst. The article also stated he is a former senior economist with JP Morgan Chase; impressive credentials to say the least. In this article, Mr. Goloven goes on record to state, “ the American economy is solid.”He further goes on to state, “ the talk of a prolonged economic downturn from the media and economic analysts should not be taken seriously”. Mr. Goloven’s talk was presented to a professional group of Construction executives and businessmen concerned about the economic slow down that was starting to plague the industry. He also reassured them the banking and mortgage sectors of the economy were also in good shape?
Well here we are four years later, the construction industry is still in the throes of an economic depression, with unemployment among trade workers as high as 40%. With real nationwide unemployment/underemployment running as high as 20-30%; with as many as 6.6 million Americans classified as long time unemployed; and a foreclosure rate the highest since the great depression. In light of such positive economic forecasts by the ‘experts” it is difficult to accept any positive predictions as credible.
More recently, many economists were making the claim the recession ended in 2009, and it was to be a jobless recovery; and, we our currently on the road to recovery, though there is little data to support this claim. The headlines are ripe with corporate and public sector layoffs, more jobs being outsourced overseas, then are being created in the U.S.; record numbers of homes being foreclosed on, as well as all off our nation’s key economic indicators slipping down to charts to third world status. Regretfully, our nation’s precipitous fall into this economic abyss goes unchecked as our nation’s leaders fail to find a solution to our economic debacle.
Now after five long years of economic hardships placed upon America’s working class and small business owners, no relief or hope appears in sight. As we enter this year’s Presidential election we still see incumbents, and candidates alike talking about their sure fire recovery plans. But, is this just more false talk about a new and near promising economy?
For many informed and concerned American’s today, politics and economics is no longer a battle of ideologies between Republicans and Democrats or conservative and liberals. But rather a watershed class war between the top 2% of Americans and the bottom 98%. In essence, it is fight for the survival of America’s diminishing middle class. Regretfully, what our elected politicians fail to realize is the key to a strong capitalist economy is a strong middle class. Once a nation’s middle class finds itself in the downward spiral of social mobility and much compromised expectations, a nation’s ruin shortly follows- as we are currently experiencing.
A few economists attribute this rapid decline, and some would argue war against the middle class. Is the result of the fact that the majority of our elected politicians in Washington come from the top 2% of America’s upper economic class. Thus being insensitive to the needs of America’s middle class; after all the top 2% do not need the government to pay their healthcare- except if you are a politician, nor need the government for recreational public beaches and, or public services. They can simply be paid for by themselves.
Ironically, some of our politicians and corporations attribute this exodus of jobs going over seas is the result of higher salaries in America, and Union workers taking away the profits and competitiveness of our nations corporations. There is some bit of truth in this statement that many American workers are overpaid which compromises the bottom line. But it’s not the lowly office worker or union employee making the national average salary of approximately $45,000 per year. But the C.E.O’s who earn on an average 120 times more then the average worker. Ironically, while some states are trying to break the backs of the Teacher’s and civil service workers unions for earning excessive salaries and benefits: Apples C.E.O, Tim Cook earns $189,000 per hour. One need not be an economist to figure out how many people you can add to a corporation’s payroll at $189,000 per hour.
But is it poor economics that has created this economic debacle, or simply the greed that results from our nation’s lack of morality and ethics. According to the Berlin based, Transparency International which rates a nation’s CPI (Corruption Perception Index) form 0-10, 10 being the most corrupt. America comes in at a pathetic 7.1. The Scandinavian counties all made it to the top 14 of least corrupt countries in the world. These are also the countries that have the highest academics, quality of life, and social mobility indexes in the world as well.
In closing, our nation’s economic policies and decisions are based on the morality of out times. Today our business morality is based on the “agency theory” of management that refutes the old traditions that managers should be held to the high standards of stewardship, stakeholder interests, and promotion of the common good. But rather simply sheer self interest. In this age of the Marketeers, where the goal is to maximize profits at the expense of employees, consumers, society, and subvert and change laws to reduce regulations that protect employees and consumers alike. In essence, our nation’s actions and the current state of our economy have confirmed we are still #1 in the race to the bottom.
Dr. Richard Cirulli: Is a business consultant, professor of economics, and Business ethics, and hosts a weekly cable show dealing with current economic topics. He can be reached at profcirulli@optonline.net
Adam has worked in the local news industry for the past two decades in Westchester County and the broader Hudson Valley. Read more from Adam’s author bio here.
