3-Minute Wisdom

“Never underestimate the inventiveness and tenacity of the U.S. economy. In time, it tends to overcome bad luck and policymaking blunders.”

Ken Mayland, president of ClearView Economics, Pepper Pike

Q: What is your best or most interesting piece of
economic wisdom?

A: The economy is cyclical. The cycle has phases: expansion, peak, contraction and trough. If you want to know where you are going, you better know where you are. Business will never remain constant; expect change.

Q: And where are we now?

A: In the current situation, the economy was in a contraction, or the recession phase, from late 2007 through about the midpoint of [2009]. We hit the trough, that bottom transition point, around the midpoint of [2009], around June or July, and now the economy is expanding again. I always underscore that “recovery” is not synonymous with “recovered.”

Q: How reliable are economic forecasts?

A: As someone who has won a number of forecasting derbies, I have to admit, only modestly reliable. The future is not written in stone, and decipherable, if only you had the Rosetta Stone model. There are unknowable things that will happen in the future, many not economic in nature that will have strong bearings on what happens. — Interview by Brittany Moffat
(For more wisdom from Ken Mayland, visit ibmag.com.)

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