- by New Deal democrat
Why should you read me?
After all, there are about a bazillion economic commentators out there, a significant number of whom feel obligated to give their take on the latest statistics. As far as I am concerned, for reasoned commentary on daily statistics, 90% of the time you could read Bill McBride a/k/a Calculated Risk, and Doug Short (maybe the most informative graphs in the entire econoblogosphere), and just stop there. There's no point in my feeling the need to add my $.02.
So what is it that I bring to the table? Fitting the data into the business cycle.
I know of nobody else in the econoblogosphere who so relentlessly parses the economic data into long and short leading indicators, coincident indicators, short and long lagging indicators, and midcycle indicators -- and backs up the categorizations with as much historical data as possible, sometimes going back an entire century.
I know of nobody else in the econoblogosphere who so relentlessly parses the economic data into long and short leading indicators, coincident indicators, short and long lagging indicators, and midcycle indicators -- and backs up the categorizations with as much historical data as possible, sometimes going back an entire century.
So when I read somewhere that, e.g., employment will drive consumer spending, or housing, I already know that the historical data shows exactly the reverse: housing drives employment with a 12 month or more lag; consumer spending drives employment with a much shorter lag. I know that, over the longer term, corporate profits lead stock prices, not the other way around. I know that bank lending only turns up once an expansion has started. I know that the trend in hiring, whether up or down, slows and then turns first in comparison with the trend in firing. And so on.
In short, I see myself as the ECRI (Economic Cycle Research Institute) for those who don't have the $64,000 (last I heard) annual subscription fee to spare.
And I am particularly focused on how that data will play out in the lives of ordinary workers. A modern industrial democratic society ought to be improving the lot of the vast majority of its people. If it's not. something is seriously amiss.
A side effect of my focus is that unlike most observers, I do not fall prey to the fallacy of projecting the present trend into the future. In November 2006 I forecast the last recession being 1 year ahead. In January 2009 I forecast that the bottom of the Great Recession was likely to be that summer. For the last 6 years, with various amounts of waxing and waning, I have been bullish on the economy, and relentlessly eviscerating Doomers. I still am bullish.
Now more and more of the midcycle indicators have appeared to hit their inflection points. That just means the numbers underlying the expansion will remain positive but in general be gradually less so as time goes on.
Just remember, when the time comes - and it hasn't yet and may not for quite a while - that I yellow-flag the next recession, all of the coincident numbers like industrial production and employment will still be quite positive. You will think I have gone over to the Dark Side. I won't. I will simply be "skating to where the puck will be," in the words of hockey great Wayne Gretsky. That's why you read me.
