For Once, August Looks Auspicious

AUGUST, 1991. Mark your calendars. Everything is going to get better in August, 1991. That’s what nine out of 10 economists are saying.

In August, 1991, the seas will be calm, the recession will begin to ebb, and the lion shall lie down with the savings-and-loan officer. In August, 1991, you can sell your house. You can buy a car. You can dance with your wife. You can spend again. In August, 1991, we burn the 10th economist at the stake.

The economist is the modern equivalent of the witch. Why speak of “voodoo economics�? What is all economics but witchcraft, number crunching, number cooking, omen reading, chicken sacrifice, statistics and prayer?

I was in a roomful of economists the other day. They hold data instead of bat wings these days. They use calculators instead of caldrons. They wear sharp gray suits instead of black capes and pointy hats with stars and crescent moons. But the effect was still the same.

“Why will it get better in August, 1991?� I asked each economist in the room. “Every time I pick up the paper, the forecast is gloomy. All the numbers keep going down except unemployment. And yet, all these stories are followed by the same message. It sits there like a modern mantra: Things will begin to improve in August, 1991. Why?

“The groundhog will see his shadow,� quipped economist No. 1.

“The groundhog will commit suicide,� joked economist No. 2.

“The groundhog will see prices are down and start spending again,� offered economist No. 3, the sober economist.

“But what will make him want to start spending again?� I shouted as the economists left the room. They were only on a joke break. They had to start consulting again. If I want to know the answer, I’ll have to cross their palms with contracts. You don’t get freebies out of economists.

OK, let’s not blame the prophets. Let’s accept it as a given then, the way we do in math class. Things will get better in August, 1991. It helps to think of things as having a beginning, a middle and an August of 1991.

That is when the curse will be broken. The economy is cyclic, the experts tell us. We are paying the price now for nearly a decade of unprecedented borrowing, reckless spending, unlimited deal making--the years of living leveragedly. But we won’t have nearly a decade of unemployment, declining real estate values and decreased business spending. We will have a short, shallow punishment until August, 1991.

Think of it as one of the mysteries of the universe that you and I are too feeble to understand in our head-scratching search for common sense and reason. We are just followers, spending when everyone else spends, saving when the herd starts saving. The prophets understand us. They look in their crystal balls and see us waking from our economic hibernation in the sunny days during the second half of 1991.

Until then, we are left to ponder the mysteries.