Why does the press continue to interview so-called "experts" that haven't a clue what's going on?

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Robert Herriman
Why does the business press continue to interview so-called "experts" that are frequently incorrect?

Lakshman Achuthan is the managing director for Economic Cycle Research Institute and is a regular when the media want to talk about economic isues like inflation and the recession. His opinions are laced throughout the media as an expert we should pay heed to. But should we?

Merriam-Webster defines expert as ”having, involving, or displaying special skill or knowledge derived from training or experience". So when the news media have you on as an expert, this is exactly what the public should expect.

In his latest interview, Mr. Achuthan states that the economic recovery is progressing normally. He also claims that there is no indication of a double dip recession. Are we really out of the recession now? He tends to think so, I vehemently disagree.

Mr. Achuthan either refuses to acknowledge or just doesn't understand that the fundamental issues still exist. The debt is still burgeoning, the deficit isn't decreasing, spending and printing is still way up and instead of encouraging people to save, we are pushing them to spend. Are we out of the recession--Hell no.

What are his magical predictions in the past that makes him this guru-expert that everyone wants to interview?

Back in August 2007, he was interviewed by PBS's Susie Gharib. In this timely and telling interview, Mr. Achuthan made the following "expert" predictions about inflation and recession-

"on both counts, we don't see a lot of trouble in the near term. Inflation is not spiraling out of control. So they have leeway to cut if they wanted to. It wouldn't be irresponsible in terms of being an inflation steward. On the other hand, the economy is not about to tip into recession. We had some revised GDP numbers out today, 4 percent growth in GDP. This is well above trend. I mean I was looking into the numbers. You had over 27 percent growth in nonresidential construction. That's -- that's business spending. That is big, booming activity".

That was the conventional wisdom (CV) of most of the “experts”, Ben Bernacke and Washington DC at that time and they were all wrong.

Then it took Achuthan till March 2008 to finally acknowledge we were in a recession or he calls it, a “recession of choice”?

Again the CV was used to explain why we didn’t avoid this recession—

“the economic stimulus package passed by Congress this year is too late to help many consumers and businesses and that the Federal Reserve was too timid when it started trimming interest rates last fall”.

Recession of choice? Those of us that understand the boom-and-bust cycle thoroughly understand that no amount of stimulus would have prevented the recession; as a matter of fact it will surely extend it if economics and history is any indicator.

We could look at Mr. Achuthan’s words in a couple years and again see how thoroughly off-base and misinforming he really is.

But unfortunately this won’t matter to the media who will continue to call on Mr. Achuthan as others of that ilk to offer their “expert” analysis for a mostly uneducated citizenry.