The United States must be approaching the end of the recession when economists begin offering their retrospectives. Even if the data are pointing to an end to the recession, in technical terms, the economy is a long way from recovery. Just look around at the people out of work. Even those who have maintained their jobs are finding it difficult to qualify for mortgages, keeping the real estate industry itching for more handouts like the extension to the home buyers’ tax credit.
And some economists are not convinced that the worst is over. We may be in the lull of a double-dip recession. Wherever the economy is, making predictions, like critiquing wine, is often no more accurate than randomness.
For Fortune Magazine, economist and actor Ben Stein contributed four of the lessons he learned during the recession.
- Economic forecasting is still an extremely difficult gambit
- Financial market forecasting is even more troublesome
- The amount of lying and deception by the financial sector of this country has been breathtaking
- The government has no special abilities to forecast or predict a darned thing
Ben Stein is usually a strong supporter of the financial industry, so it’s nice to see him pointing out some of the flaws inherent in the system. He goes on to reassure investors that staying invested in stocks and bonds while keeping enough liquidity is the best way to weather recessions in the long term. If the second dip rears its head, I would like to believe it will provide more opportunities for investing for growth over the coming decades.
Are you prepared for the next recession?
Photo credit: simonhn
4 lessons from the recession, Ben Stein, Fortune, November 19, 2009
Updated September 17, 2011 and originally published November 20, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @flexo on Twitter and visit our Facebook page for more updates.
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{ 5 comments… read them below or add one }
I like Stein’s comments. I usually don’t agree with what he says, but I find #3 interesting. I read a lot of the non-fiction business thrillers like House of Cards and A Colossal Failure. What I took away from these books is that these guys are smart and incredibly cocky – anything they contrive that your do not understand DO NOT INVEST! Stick with basic investing, keep up with the news as best you can, watch your investments, and don’t assume you are smarter than you are. Don’t be cocky.
The other thing I took away from these books is – isn’t it a shame these incredibly intelligent people have gone into finance. Too bad they didn’t choose to tackle medicine or the sciences. As smart as they are we could cure a lot of the world’s ills.
I just remember Ben Stein from Ferris Buehler’s Day Off. Can’t can’t him seriously :)
Anyone with even a touch of cynicism would realize that investing is always a gamble. I didn’t need this recession to tell me that. But I was definitely surprised by the depth of the deceptions by these financial outfits.
I like Ben, but with his recent gig playing a tout
for a credit bureau has almost destroyed his credibility
for me. grrrrrr
Ben Stein is a fraud. With books titled “How to time the Market” and advertisements for Credit Score companies that rip you off, the man is no better than Jim Cramer or Bernie Madoff. It’s obvious he’s a smart guy and understands the market and all, but he uses it to rip off consumers.