Not one of the "Blue Chip" 50 economic forecasters saw the coming of the 2001 recession in the fall of 2000. How could 50 intelligent informed observers make independent assessments of the economy and fail to see a major event that was right in front of their eyes. The obvious answer is that forecasters do not make independent assessments. They try to make sure that their foecasts are consistent with the rest of the forecasts. This way, if they are right, they can be happy. And, if they are wrong, well, who could have known? This history is important to keep in mind as we approach a period of extrordinary economic uncertainty. It is also a good reason that reporters should not be asserting that, "with Americans earning more and spending more, economists expect that the gross domestic product will expand faster than it did in the third quarter." Reporters who gave their readers the wisdom from the Blue Chip 50 in the fall of 2000 would have badly misled them about the state of the economy at the time. There are in fact many pessimists about the current state of the economy (not just me), reporters should present their assessments also.
-- Dean Baker
