The Public Policy/Economic Boom Boxers
Ulmer, Melville J.
THE PUBLIC POLICY ECONOMIC BOOM BOXERS by Melville J. Ulmer T he perpetually burning question I of what lies in store for the economy—prosperity or recession—flares with particular brilliance in...
...It is the kind of thing that dying fathers,-in their traditional wisdom, would tell their children if they lived long enough to say it: Be prepared as best you can for all conceivable eventualities...
...By every possible measure, business cycles display the bewildering diversity of their individual characteristics...
...Even a prognosticator's impressive record of past successes, experience suggests, can promise no more for the next venture than a crapshooter's string of three consecutive sevens...
...A concise chronology of the terrible decade with facts and dates...
...History as well as verifiable theory bear that statement out...
...It is easy to imagine, too, the lot of individual freedoms in an environment created by zealots...
...In perhaps the most meticulously documented study on record, 1 Mitchell found that a free market economy moves naturally in wave-like patterns that, though broadly similar, differ in significant details...
...Published by THE...
...The temptation grows strong to accept presumably expert presentiments, including those of the politically biased, especially when proffered in apparent good faith and free of charge...
...I would agree that it seems unlikely but wouldn't bet a junk bond either for or against...
...Such heterogeneity among business cycles, he wrote, is insured by what he called "exogenous" intrusions—the pepper of technological changes, droughts, monopolistic forays, strikes, wars, fortuitous over-production, drastic institutional changes, bank failures, speculative fevers, critical political policies or legislative decisions...
...Price $7.50 ea...
...Box 10448, Arlington, VA 22210 Editor (Name and Complete Mailing Address) R. Emmett Tyrrell, Jr., 1101 N. Highland St., P.O...
...Livingston subsequently recorded a systematic poll of leading forecasters annually from the war's end through the early 1970s, with as many as fifty respondents...
...The record of professional forecasters is a thoroughly predictable result...
...That record, insofar as it has been compiled, is almost ridiculously lamentable...
...A valuable resource tool for all concerned with public affairs and current history...
...According to the account of economics writer Warren Brookes, the consensus of leading forecasters queried by the press missed the "worst recession in forty years," the one of 1974-75...
...Mortgages or Other Securities (If there are none...
...That was less than the result one might expect from tossing a coin...
...Nor should credence be given to miraculous statistical devices designed to yield "objective" insights into the future that elude biased and otherwise limited human beings...
...His basic theory has become so thoroughly absorbed in modern thinking that it is taken for granted, like gravity or the apparent movements of the sun...
...They may even develop their own "feelings" about the future, opting for a rise, a fall, or a placid continuation of the present...
...THE AMERICAN SPECTATOR DECEMBER 1988 37 though certainly not all economists and business analysts...
...ORDER COUPON...
...It remains a useful early indicator of what seems to be happening now, predating release of the comprehensive GNP by three months or a bit more...
...Although economic knowledge has grown some, there is as yet no evidence that it has penetrated the "art" of forecasting or that it ever will: Fisher's notable error has been replicated regularly ever since, although (given more modest opportunities) not so theatrically...
...Copies (Nn Press Run) C Total Prod andior Requested Circulabon (Sum or 1081 and 1082) 13 Free Distribution by Mail, Carrier or Other Means Samples, Complimentary, end Other Free Copies G TOTAL Dion 4 E. Floral 2—should equal net press run shown in A) E Total Distribution (Sum of C and D) F Copies Not Distributed 1. Office use...
...For government leaders the lesson of experience is to modify their traditional inclinations and exchange some bravado for larger measures of modesty...
...Business contractions have ranged from just six months in 1980 to the four terrible years from 1929 to 1933, or to almost ten years if we take the entire 1930s as one extended depression, as many do...
...Mitchell founded the famed National Bureau of Economic Research to carry on his work, which it still does...
...Copies of Single Issue Published Neatest to Filing Date .45,594 45,594 37,459 39,252 40,674 1,793 1,422 2,728 2,192 11 I certify that the statements made by Signature an ale of Edi Publisher, Business Manager, or Owner me above are correct and complete Publisher PS Form 3526, D. 1987 (See instructions on reverse) 38 THE AMERICAN SPECTATOR DECEMBER 1988...
...Short biographies of the leading personalities on both sides...
...Title of Publication The American Spectator -3 Frequency of Issue Monthlymarket during the previous year and a half in eight out of ten cases...
...Box 10448, Arlington,VA 22210 5. Complete Mailing Address of the Headquarters of General Business Offices of the Publisher (Not printer) Same as above 6 Full Names and Complete Mailing Address of Publisher, Editor, and Managing Editor (77dr item MUST NOT be Monk) Publisher Name and Complete Mailing Address) Ronald E. Burr, 1101 N. Highland St., P.O...
...sum, by the nature of the phenomena there can be no infallible signs or even highly reliable indicators of coming turning points from prosperity to recession or back again from recession to prosperity...
...AMERICAN FOUNDATION FOR RESISTANCE INTERNATIONAL...
...Such independence is commendable...
...Price $7.50 ea...
...left over, unaccounted, spoiled after printing 2 Mail Subscription (Paid and/or requested) 2 Return from News Agents The American SpPrtator Fauratinnal Foundation, Inc...
...A compilation earlier this year by the Wall Street Journal showed that the most widely (and successfully) touted stocks of the nation's ten leading brokers underperformed the 1A...
...The prime reason is that modesty promotes a profound reluctance to act, an essential counterweight to the public pressures usually prevailing...
...Therefore wise public leaders would keep fiscal and -monetary powder dry but for real and present emergencies only...
...In 1929 America's top economist, Irving Fisher, foresaw a surge in the nation's production, income, and the stock market no less, just weeks before the crash...
...hedge every bet you are compelled to make on the future...
...In addition, irrational psychological reactions, cultural fidelities, and ephemeral fashions distort the simplified pecuniary calculus often assumed (by neoclassical economists) to dominate the market...
...But be assured that the feelings, your own or anyone else's, assuming they are reasonably reflective and informed, are as apt to be unerring as those of the world's most renowned fatidical specialist, no less but no more—which is to say that on the average they most likely will be worth nothing at all...
...and in stocks among industries and individual corporations...
...They inevitably flounder when they assert, unreservedly, what will happen next year...
...That liberals are currently the most pessimistic—considering the level of business activity, that is—is simply further proof that hope springs eternal...
...Bulk orders 10 or more, $6.00 ea...
...The lesson of this record for individuals, households, and government leaders is crystal clear...
...A half-century ago one of history's greatest students of economic dynamics, Wesley Clair Mitchell, demonstrated that the turning points of business fluctuations are inherently unpredictable...
...Present and future outlook...
...This piece was inspired by the nightmares of a post-World War II depression which were widely circulated as that conflict neared its end...
...Even in flamboyance it was at least approached fifty-three years later by the equally renowned George Stigler, winner of the 1982 Nobel Prize in economics...
...They predicted 8 to 15 million unemployed as the nation's resources were shifted cumbersomely from wartime uses to peace...
...In particular, they swerve, swing, stall, clobber, and stimulate business activity in habitually unforeseeable ways...
...mists versed in prophecy what the next twelve months will bring...
...1B...
...as name and address Marc be stated and also immediately thereunder the names and addresses of stoth.tolders owning or holdsm I percent or mare of total amount of stock not owned by a corponstion, the names and addresses of the individual owners T. be given Downed by a parnsership or other unincorporated firm, its name and address, as well as that of each individual must be given p the publicanon is published by a nonprofit organikation, as some and address mat be stated I (rem man be completed...
...Meanwhile, citizens throughout the nation may tingle in anxiety to glimpse beyond the economic horizon, whether out of public spirit, political hopes, or concern for the fortunes they may gain or lose...
...His lifetime objective (which, professionally, spanned the years from 1900 to 1948) was to probe the nature of cyclical swings so that, once underway, society could move intelligently toward their moderation...
...ince those days aspiring seers have 1.3 performed no better, at least not in their critical mission of spotting turning points...
...Please send me copy(ies) of AFGHANISTAN - THE TERRIBLE DECADE 1978 - 1988...
...Name* Address...
...And they would be correspondingly abstemious in exercising other government prerogatives...
...They differ qualitatively in a mirror image of the immense variety of the exogenous factors sporadically at work...
...County...
...To be sure, his personalinterest was not in debunking the business forecasters who, when he began his work, would have been casually ranked with hapless clairvoyants or unblushing charlatans anyway...
...After thanking the President for his congratulations at the White House threshold, he turned to reporters to proclaim a great depression on the brink of what proved to be the longest business expansion in history...
...Bulk orders 10 or more $&..0a ea...
...They are generally good at that...
...I enclose my check for $ Made payable to The American Foundation for Resistance International and mail it to 6 East 39th St., Suite 1209, New York, NY 10016...
...Hence I cringe when, at the turn of every year, daily newspapers ask econoMelville J. Ulmer is emeritus professor of economics at the University of Maryland, a one-time student of Wesley Mitchell, and an associate of the National Bureau of Economic Research...
...The politics of the various resistance factions explained...
...Annual Subscription Price 12 $27.00 10 Extent and Nature of Circulation (See instructions on reverse side) A Total No...
...It is clear there is no ineradicable law governing the timing...
...Box 10448, Arlington, VA 22210 Managing Editor (Name and Complete Mailing Address) Wladyslaw Pleszczynski, 1101 N. Highland St., P.O...
...They were drawn, most notably, by the pens of Robert R. Nathan, then deputy director of the Office of War Mobilization and Reconversion, and Lawrence R. Klein, later a Nobel laureate...
...Unfortunately, the question of what credentials are appropriate for passably accurate forecasting must remain one of the unsolved mysteries...
...Yet as history has shown, a free market system reacts to a hyperactive government the way human organisms react to carbon monoxide...
...For postage & handling, add $1.50 for first copy and $0.50 for each additional copy...
...None of the cycles' separate phases—defined as recovery, expansion, recession, and contraction —is heralded by unmistakable portents...
...They might as well ask Jimmy the Greek or the nearest bartender...
...In a sense the situation is gratifying, since it is so easy to find an authority, no matter what the credentials, whose opinion will confirm one's own...
...But the one particular lesson drawn from his work of prime interest here has been forgotten, in some instances willfully, by many THE AMERICAN FOUNDATION FOR RESISTANCE INTERNATIONAL 6 East 39th Street Suite 1209 New York, New York 10016 AFGHANISTAN THE TERRIBLE DECADE 1978 - 1988 Curtis Cate, Editor A TIMELY REFERENCE HANDBOOK An overview of the Soviet Union's failed conquest against a background of 20 centuries of Afghan history...
...Box 10448 Arlington, VA 22210 8 Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or More of Total Amount of Bonds...
...So far as I know, there were none prepared to predict that the last "recovery" would persist to the present writing...
...It also provokes an avalanche of responses from scholars, professional crystal gazers, necromancers, and the more determined partisans of the two major political parties...
...Fug Name Complete Mating Address 1101 N. Highland Street F.Q...
...Economists serve legitimately in the first capacity when they tell us what will happen if a specified event occurs, such as a rise in interest rates, provided all other potential stimuli remain unchanged...
...Thus on the average they last about three and a half years, measured from peak to peak, but their expansionary phases have varied from a brief nine-month postwar splurge in 1919 to a stretch of at least five years—the duration thus far of the present record-breaking prosperity...
...Including Alexandre Bennigsen, Michael Barry, Rosanne Klass, Anthony Hyman, Rawan Farhadi, Chantal Lobato, Abdul Hakim Tabibi...
...The first to notice this was the famous financial writer J. A. Livingston, in an article in 1953 entitled "How Wrong Can Economists Be...
...None U.S Postal Service STATEMENT OF OWNERSHIP, MANAGEMENT AND CIRCULATION Required by 39 U.S C. 3685) 2. Date of Filing October 1, 1988 a. Complete Mailing Address of Known Office of Publication (Street, Cloy...
...For household investors that means diversifying liquid assets as much as possible among stocks, bonds, cash, C.D.'s, mutual funds, and money funds...
...True enough, philosophers hold that the proof of knowledge lies in prediction, but they do not say in soothsaying, and there's a big difference...
...PUBLICATION NO...
...0 4 8 8 4 1 4 3A 7,=11:"" Published 38...
...Foreword by Sidney Hook...
...Aside from their duration, business cycles also differ widely in vigor, varying weak and hesitant recoveries with blazing upturns, withering plateaus with steamy booms, gentle declinations with tobogganing drops and devastating depressions...
...A must for the classroom...
...And these may appear anywhere in the world and, in a tightly knit international society, affect all the rest of us...
...Contributed by the world's leading experts...
...The end of the war, instead, brought immediate and unprecedented prosperity...
...The present upturn is already approaching twice the average length of an entire business cycle, and who's to say it won't make it...
...Effervescent media pundits, with appropriate forecasts at hand, call constantly for quick fixes to remedy the often irremediable—to maintain prosperity or to regain it, to lower prices for consumers or raise them for farmers, to cut the deficit or support free childcare, to make the rich poor or the poor rich, and so on...
...The federal government's monthly index of twelve leading indicators is sometimes so heralded, but in performance it has been wrong or seriously misleading more often than right, just like us humans...
...Copies Each Issue During Preceding 12 Months 41,912 33,169 35,074 36,500 3,341 2,071 41,912 1,905 1,426 Actual No...
...Trying to follow such advice could be upsetting...
...The distinction is between conditional anticipations, such as confirmed in science laboratories, and flat-out unqualified divinations, which may or may not materialize...
...Stole and ZIP,4 Code) (Not pruners) The American Spectator, 1101 N. Highland Street, P.O...
...failed to foresee the major one that arrived in 1982, and finally underestimated the vigor of the 1983-84 expansion by more than 50 percent...
...In 'The study appeared in a series of monographs beginning in 1903, the best known of which are Business Cycles: The Problem and Its Setting, 1927, and Measuring Business Cycles (with A. E Burns), 1946...
...He found that, in deciding whether next year's real gross national product would go up or down, the consensus was correct just four out of twelve times...
...T here are solid reasons for this futility...
...If that seems like mere common sense, it even so implies a fortitude, beyond the historical average, to resist the silken tongues of brokers and other salesmen...
...Otherwise, it provides just another brick in the wall of truth supporting economic adviser Arthur F. Burns's statement to newly elected President Eisenhower in 1953: "Economists have not yet evolved, if they ever will, a technique for developing dependable forecasts...
...Box 10448, Arlington, VA 22210 7. Owner (If owned by a corporation...
...THE PUBLIC POLICY ECONOMIC BOOM BOXERS by Melville J. Ulmer T he perpetually burning question I of what lies in store for the economy—prosperity or recession—flares with particular brilliance in election years, for obvious reasons...
...so state) Fug Nana, Complino Mating Address 9 For Completion by Nonprofit Organizations Authorized To Mail et Special Rates (DMM Season 423.12 only) The purpose, function, end nonprofit status of this organikation and the exempt status for Federal Income tax purposes (Check one) 111 tit] fp.:tsc1.4:,tn9C a2nuodnIt3husr 121 Has Changed outing (f changed, publisher must submit explanation of change with Ms statement ) El Paid and/or Requested Circulation 1 Sates through dealers and carriers, street vendors end counter sales Average No...
...Edited by Curtis Cate...
...then they wrongly predicted recessions in 1978 and 1979...
Vol. 21 • December 1988 • No. 12
