An article today titled ‘A second half recovery is suddenly not a sure thing’ and subtitled ‘An end to the green-shoot rally?’ says “For months, policymakers from Federal Reserve Chairman Ben Bernanke on down told investors that a second-half recovery was a safe bet”, that “Investors, optimists by nature, eventually bought in”, and that “But now, even though the second half has actually arrived, the curtain on the recovery has so far remained down and questions are being raised on whether it will go up at all”.  I suggest you read the article.  It comments on the views of ‘optimistic economists’ and ‘pessimistic economists’.  The question I have is:  How is it that economists – broadly speaking working from a base of common theoretical knowledge albeit varied lengths of experience – can differ so much given a common fact base?  In the 40 years I have rendered business valuation opinions for fees – a highly subjective thing to do –  in literally 1,000’s of litigious or potentially litigious engagements I have never experienced experts working from a common fact base differing in their opinions to the extremes of one group saying that in the next six months ‘this business is going to flourish’ and a second group saying ‘this business is going to go bankrupt’.  Why are economists different?

I again state that I am not an economist, and reiterate the old saying:  “the least common thing about common sense is that its common”.  Since the first reported coining of the phrase ‘green shoots’ 2 – 3 months ago I have been saying ‘green shoots’ need good soil and a good water supply to thrive, and that without U.S. job and consumer confidence recovery the people who leaped on the so-called ‘green economic shoots’ bandwagon could not be right in terms of their second-half recovery forecasts.  I hope I am wrong and that there is U.S. economic recovery alive and well by the end of 2009.  However, if I am right I continue to constantly wonder how I can be right in the face of all the ‘economist firepower’ the Press and others report on.

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