"The more interviews that an expert had done with the press, Tetlock found, the worse his predictions tended to be."? Nate Silver, The Signal and the Noise: Why So Many Predictions Fail - But Some Don't.
Before every other expert gets his knickers in a twist, the reference in the quote is to Phillip Tetlock and his book "Expert Political Judgement: How Good Is it? How Can We Know"? Accordingly in the above particular context, political experts are the singular targets. Mr Tetlock's findings are based on a detailed study, stretching over two decades, of forecasts and guesstimates made by political specialists in the western world.
What is rather enjoyable to note is that analysts, including perhaps opinionated anchors, on television chat shows know as much about politics as the common man on the road. What remains to be done is tabulating the number of appearances in the media of each anchor and analyst to determine how bad the respective predictions are. Considering that there are about 3 dozen news channels and everyone is raving on one or the other channel, almost everyday, the sum total of political predictions logically should tantamount to nothing!
Curiously, Mr Nate in his aforementioned book, also noted that the quality of weather forecasts have actually improved over the last few years. Kudos to the weatherman! And as expected, Mr Nate finds that a lot of smart people have failed when they thought they could beat the market!
So next time, sitting in front of the idiot box, if a prediction appears prescient, quickly compute the number of appearances of the speaker, and than change the channel.
Notwithstanding all of the above (an accountant's favourite phrase), today's write up was actually motivated by an advertisement in the newspapers, which was most likely sponsored by the ex-ruling party, and asserts an excellent performance over the last 5 years based on certain key economic indicators. And that was not enough; the advertisement blatantly challenges noisemakers to deny "these" facts and figures. So where are the noisemakers?
Belonging to a rare apolitical breed, perhaps almost extinct, which vigorously opposes the idea that democracy is the panacea for every social, economic, political and all other worriment, the particular challenge was too amusing to ignore. Logically, the data included in the advertisement should be accurate and under all assumptions is verifiable from the Central Bank archives. The forestalled conclusion is based upon the simple deduction that a political party is not expected to commit political suicide by misquoting statistics, in a widely circulated advertisement, which can be vouched independently.
In order to provoke the noisemakers to respond, it would have been far more appropriate to reproduce the data in a comparable format here under. Unfortunately since anything associated with politics today is viewed conspiratorially, a simple summary will have to suffice.
According to the advertisement, the GDP in rupee terms grew 86% from 2007-8 to 2013. Notwithstanding personal views on the efficacy of GDP as a measure for economic growth, economic gurus generally swear by it. And an 86% increase in 5 years is an above average, in fact quite a fantastic achievement. Curiously however, the GDP growth rate was only 1.7% in 2007-8 and only 4.3% in 2013. Although there is an apparent improvement, a layman must wonder why the figures don't reconcile.
The next one is a major surprise, inflation decreased by 68% between 2007-8 and 2013. A commendable performance indeed; this is obviously supported by a decrease in interest rates from 15% to 9.5% between the same years. Abnormally though, a low interest rate monetary policy is recognised as expansionary, with inflation a natural consequence. But when have the economists ever been right!
The fiscal deficit decreased from 7.6% in 2007-8 to 6.5% in 2013 which perhaps was due to, on a larger extent, the 136% increase in tax collection between the same years. And here the pundits had the populace convinced that the nation was faring miserably on account of tax collection with serious repercussions for the future. Perhaps all that was an excuse to tax agriculture! And last but not least, the faith reposed by non resident Pakistani's in the last government is evident from the phenomenal increase of 117% in foreign remittance.
Presented thusly, which was most likely the intent behind the advertisement, there appears to be a marked improvement in the country's fortunes over the last five years. So why aren't the experts predicting a clean sweep for the previous government in the forthcoming elections. One reason could be Mr Tetlock's findings espoused upon in the beginning of this article, the experts are obviously wrong. But something is amiss. Its not only the experts who remain skeptical, the masses remain unsure as well. And herein lays the quagmire.
The politicians, the journalists, the populace, the civic society, and even some economists, in fact most everyone is unable to fathom the mysteries of economic policies and economic indicators. Economics is a labyrinth of complicated theories and fallacies, which on the face of it appear simple enough for everyone to quote off hand, but as soon as the debate goes above a few notches, everyone is loath to continue. No wonder that debates on economic performance are never conclusive, which in itself is a mystery, since of all the performance measures, economic indicators are the most objective, except they need to be appropriately understood.
Having experienced a few economic tête-à-têtes on the channels, the general feeling after the debate is of utter confusion. Perhaps the opposing noisemakers, in response to this advertisement, will quote a handful of other statistics, which will purport to evidence the failings of the previous government, and rest assured that there are many such statistics in an economist's quiver, but even than the eventual outcome will be a big fat nothing. Most definitely, the populace will remain unable to choose the most appropriate indicators from this plethora of statistics, and will simply nod their heads in skeptical disbelief.
But is ignorance really bliss in this case? In a world where, for most of history, wealth and economic stability has been the singular catalyst for success, definitely not!
Personally, freedom of speech, quality education, development, social challenges and all the rest are subservient to wealth. As history proves, minus resources, all else will remain a pipe dream. Those who believe that the equation balances in reverse surely have their algebra wrong. So if economic stability is the top agenda for any nation, and the voters are clueless about the subject, how do they choose who to vote for? And that dear reader is the biggest dilemma of democracy. Generic literacy, however high, is just not enough. If it was, would educated rational western voters have elected governments which drove them over the economic cliff?
The objective today was simply to foster a debate and perhaps in time create awareness amongst the masses on the most important issue, as they go to vote. Otherwise the noisemakers will continue to reign supreme.