While the markets take a breather and consolidate I thought it be fun (or not) to step away for a quick look at politics (a subject I try to avoid). The WSJ asked economist’s their view on the potential impact the individual presidential candidates would likely have on the economy. Like all predictions, I put zero faith in the results but find the discussion interesting and fodder for some fun.
Q: Why did God create economists? A: In order to make weather forecasters look good.
Three econometricians went out hunting, and came across a large deer. The first econometrician fired, but missed, by a meter to the left. The second econometrician fired, but also missed, by a meter to the right. The third econometrician didn't fire, but shouted in triumph, "We got it! We got it!"
A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Lets smash the can open with a rock." The chemist says, "Let’s build a fire and heat the can first." The economist says, "Let’s assume that we have a can-opener.”
More than three-fourths of forecasters in a new Wall Street Journal survey say the presidential election has introduced more uncertainty than is typical from a change at the White House.
Their current economic forecasts aren't all rosy: On average they see about a 20% risk of recession in the next year, down slightly from 21% in the previous survey. They forecast the economy will be too fragile for the Federal Reserve to raise rates before June. They predict the economy will add fewer jobs this year than in 2014 and 2015.
More than four-fifths of economists rate the possible election of either Mr. Sanders or Mr. Trump as an outcome that may force them to lower their economic forecasts. About half the survey’s respondents rate them as “significant” risks. Regardless of who wins, it is unlikely the new president would be able to change policy quickly enough to affect 2017.
As with most things, the economists polled could not reach consensus, unlike their past recession predictions where they accurately forecasted 29 of the last 3.