Academia : The Final Frontier

From the LA Times, a while back, we have Lisa Girion writing about: UCLA analysts back forecast of 'soft landing'.

Despite the housing downturn, the California and U.S. economies are headed for a "soft landing" because trouble in one sector alone is not enough to trigger a recession, UCLA economists said in a quarterly forecast to be released today.

California could have a soft landing — slowing growth but without recession — as long as its economic woes are limited to the housing sector, economist Ryan Ratcliff said in the UCLA Anderson Forecast outlook.

"The question for how bad this thing is going to get over the next two years is whether or not something else comes along and becomes the double whammy," he said.

Leamer's national forecast devotes 14 pages to explaining why several economic models foresee recession.

Then, in the final page and a half, the forecast says such models are wrong because "they can't seem to be taught that something is very different this time."

Never forget the immortal wisdom of Ludwig von Mises: "The four most expensive words in the English language are 'it's different this time'."

Fourteen pages devoted to why "several" economic models say recession, and in one page and a half, suddenly there's no recession. Magical!

Now, let's take a quick look at the contributors to the UCLA Anderson School:

Citigroup - Salomon Smith Barney & Citibank
First Pacific Advisors Inc.
PricewaterhouseCoopers Foundation
Roth Capital Partners, LLC
Arden Realty LP
Bank of America
KeyBank National Association
Apollo Real Estate Advisors, L. P.
CMS Bond Edge
Deutsche Bank
Dimensional Fund Advisors Inc.
Fidelity National Title Company
First Property Realty Corporation
Goldman Sachs Group Inc.
J. P. Morgan Chase
KPMG LLP
Barclays Global Investors N.A.
Capital Group International Inc.
CB Richard Ellis Inc.
Chicago Title & Trust Company
Countrywide Home Loans Inc.
East West Bancorp, Inc.
Eastdil Realty Inc.
Merrill Lynch
Moody's Corporation
Morgan Stanley
Pacific Investment Management Company
Suntrust Bank
Union Bank of California Foundation
Union Bank of Switzerland
Wells Fargo Bank
Western Asset Management Company
Arden Realty, Inc.
Bank of the West
Catellus Development Corporation
Washington Mutual Foundation

No sir! No vested interests there.

His conclusion: "The models say 'recession'; the mind says 'no way.' I'm going with the mind."

Yes, why look at the evidence? Let's go for 'faith' instead!