Kudos to Geoff at Innocent Bystanders for creating a chart that's significantly better than my chart on the exhaustion rate. Geoff simply took the chart from Christina Romer's presentation (Council of Economic Advisors, 1/9/2009), and added the actual unemployment data to it.
As my friend Ted put it: "This is the scariest thing ever - not because unemployment is at 9.4%, but that we were so optimistic as recently as 2009!"
File this under "the main reason you shouldn't get excited when an economist tells you the recession is over, or will be over in a few months." If you can't draw the logical conclusion - it's that economists consistently demonstrate that they can do one thing well - FAIL to accurately predict what will happen in the real world. I don't really think the topic needs any more explanation - but if you're looking for more, Karl Denninger covered it pretty well today also.
-KD
As my friend Ted put it: "This is the scariest thing ever - not because unemployment is at 9.4%, but that we were so optimistic as recently as 2009!"File this under "the main reason you shouldn't get excited when an economist tells you the recession is over, or will be over in a few months." If you can't draw the logical conclusion - it's that economists consistently demonstrate that they can do one thing well - FAIL to accurately predict what will happen in the real world. I don't really think the topic needs any more explanation - but if you're looking for more, Karl Denninger covered it pretty well today also.
-KD
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