By William H. Stewart, E.R.R.O.
(Economic Raconteur & Resident Omphalopsychite)
     As an observer, and often a participant, in a variety of analyses
concerning  economics and population, I am aware of the criticism often
leveled at studies by many people who expect action in solving a
particular problem rather than words in a printed report. The frequent
complaint by critics of economists being, “no more studies to collect
dust on a shelf - action is needed” is not an uncommon statement. I
think it is reasonable to state that people who undertake economic
studies are rarely equipped to carry out their recommendations for the
simple reason they either lack the authority to do so or the suggestions
made often require the consensus of a group, be they legislators,
corporate directors or investors. In the case of the latter when
advancing business suggestions, “practicing” economists are not usually
endowed with the risk taking entrepreneurial spirit. That’s why they
make their living within the dismal science. There is also the real
possibility that they simply do not know how to implement their
recommendations. In this respect they are not unlike a particular
elected body in Washington which I won’’t mention.
     What then is the value of their work?
     For one thing the recommendations submitted within a printed
analysis are usually accompanied by the interpretation of hard facts,
articulated assumptions and, hopefully, conservative projections all of
which should be reviewed to support conclusions frequently advanced by
both a “worst” and “best” case scenario, with the truth somewhere in
between. Developed societies and their economies have become so
complicated with issues of concern which are so interlocked that often
the only way to evaluate a proposed project, policy or, indeed, an
existing situation is to attempt to “unravel” the various elements of an
issue and identify the unintended and possible unanticipated
consequences of one form of action or another.
      To add a little frivolity to an otherwise dull subject - the
results of many studies are often promulgated only after all factors of
issues of import have been considered in relation to all the relevant
matters involved. When examination of these factors should reveal it to
be desirable to take one course of action rather than the other, then it
will perhaps be best to do so. If, on the other hand, such examination
should show the better wisdom to lie in some other course, then it  is
possible that the other course will have to be followed. It should be
one’s intention to study all pertinent factors before determining
whether it should be one course, or the other, which should be followed
and if at first you don’t succeed, just transform the data set and hope
the user of the results of the study will remember that to “err is
human” but to really foul up requires a computer. If you can appreciate
the above “gobbledygook”, then you have the makings of an economist.
      Studies are also useful for “buying time” when a difficult
decision can’t be made. This technique can be employed as a delaying
action, at least until some more important problem arises requiring
solution. Then one can forget about attempting to solve the first and
concentrate on the second. Economists love the malignancy of this
process.
     There are several rules useful in evaluating the relevance of
economic studies. The first concerns the value of the report in relation
to the weight of double spaced, extra wide margin pages. This practice
refers to the recommended method for weighing studies and assigning
consulting fees. Obtain a perfectly symmetrical plank and balance it
across a sawhorse. Place the report on one end of the plank and begin
piling rocks on the other end until the plank is perfectly balanced. At
this point guess the weight of the rocks and apply that to the client’s
invoice for services rendered.
         Still another rule useful in evaluating the worth of an
economist’s study is to consider the distance he or she must travel from
their point of origin to the Commonwealth. The greater the distance
traveled the more valuable the advice must be. The best consultants must
journey at least 5,000 miles to reach their destination. The reason for
this rule is ancient in its origin and based on the common belief that
no one in the local village could possibly know the answer to a
community’s problem. I suspect that Jesus Christ himself wasn’t listened
to in Jerusalem because He hadn’t traveled far enough and besides -
familiarity breeds contempt in the Holy Land (as well as other places I
can think of).
    Many people ask economists to advise them as to what the future may
bring - at least in terms of the economy. One of the things I have
learned is that economic forecasting is very difficult especially if its
about the future. For this reason, he who attempts to earn a living by a
crystal ball should also learn to eat ground glass.
      However, returning the tools of the profession, when it is
necessary to examine various economic data within a series of
statistical tables and one searches  for a decision as to which data  to
first evaluate - the decision is often like trying to determine which
side of a slice of bread to butter. The story is recounted about the man
whose bread fell and landed buttered side up. He ran straight away to an
economist friend and reported this deviance from one of the basic laws
of the universe which holds that the bread should have fallen buttered
side down on an expensive carpet and, after much discussion, finally
convinced his friend that it had actually happened. After weeks of
pondering this strange event the economist reasoned that the bread must
certainly had been buttered on the wrong side.
       It is an economic truism that each problem solved introduces new
unsolved problems - which by their very nature - keep economists and the
closest of their kin - attorneys employed.
     Now a word about the term “average” which economists frequently
use. For the uninitiated it is similar to the following definition:
“when you stand with your feet in a bucket of ice water with your head
placed in a lighted oven - on the ‘average’ you feel fine.”  With
respect to our frequent use of “assumptions”  economists sometimes use a
similar line of reasoning. It is a bit like the application of the “Rule
of Accuracy” which states, “when working toward the solution of a
problem, it is helpful if you know the answer providing, of course, you
know there is a problem.” As for “estimates” none are ever  complete
failures since they can always be used as  bad examples.
     After long years of meticulous study my own observation is “any
theory can be made to fit any facts by means of appropriate additional
assumptions.” This is where some economists recommend the use of the
modified law for economic studies commonly known as “Factoring
Undecipherable Data Generously Exaggerated”, (FUDGE), which confirms, if
the assumptions employed are wrong, the conclusions aren’t likely to be
very good.”
      Unfortunately, the results of the formula will remain unknown
until it has been applied and then failed. At which point it is usually
too late and irreversible damage will have resulted. This usually
requires an additional study to determine how to correct the second
situation which was recommended to solve the first problem. Take it from
an ol’dog who can recognize  bovine solid waste on the printed page, if
you absolutely  must commission a study, insist that it be written in
plain English, (unless you’re Chinese), have all assumptions and
projections clearly described and then have the study studied by another
consultant. And remember, as the old IBM motto counseled - “Thimk” -
it’s  always wise to plan aheaD.
      Seriously, most economic issues can be resolved by the simple
exercise of applying common sense. So don’t be confused or intimidated
by esoteric mathematical formula and complicated theory. Its all
professional jargon designed to impress. That’s why economists are
frequently compared to attorneys and their legal obfuscation.
       One wonders if the leadership of several of our Asian neighbors
was ever made aware of the value of common sense and practical economic
advice. No doubt many are probably graduates of Moscow’s Patrice Lumumba
People’s Friendship University which has the distinction of wrecking
more economies than Attila The Hun.

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