You may notice that we don’t run certain types of stories very often here. For example, "Experts predict…" pieces. Why not? Because expert predictions about economic matters are nonsense.
Take a story appearing today on DSNews.com, "Experts See Risk of a Housing Bubble Resulting from Fed Policies."
Reading the story, you learn that a recent poll by Zillow found, essentially, that about half of the "real estate experts" thought the Fed’s policies posed little or no risk of a housing bubble, and about half felt there was "moderated to high risk" of a bubble." (Technically, 4% said no risk, 48% said little risk, and 48% said moderate to high risk.)
Put another way, flipping a coin would be just as accurate as asking a "housing expert."
Then it went on to ask those experts to predict housing prices out to 2017. ("A cumulative rise of 22.3 percent is forecasted [sic]," if you’re interested.)
As if.
In the March/April 2005 Commonwealth, with a headline of "No boom, no bust, no bubble," we cited four big-league economists — including Michael S. Miller (chair of the DePaul University’s department of economics) and then-Federal Reserve chair Alan Greenspan — saying there was no housing bubble.
If experts can’t see the volcano they’re standing on, I really don’t expect them to be able to tell me what’s gonna happen in three or four years.
Bottom line: That’s why you’ll rarely see prediction stories appear here — unless they’re particularly interesting.
