Optimistic economists?

Even though we are clearly now in the worst recession since the 1930s, economists surveyed by Blue Chip Economic Indicators -- such as those working for investment banks, trade association and large companies -- are now viewing 2009 with some optimism and declaring the worst to be behind us. From a New York Times story:

If the dominoes fall the right way, the economy should bottom out and start growing again in small steps by July, according to the December survey of 50 professional forecasters by Blue Chip Economic Indicators. Investors seemed to be in a similarly optimistic mood on Friday, bidding up stocks by about 3 percent. But in the absence of that government stimulus, the grim economic headlines of 2008 will probably continue for some time, these forecasters acknowledge...

Even if the economy begins to right itself by this summer, the recession would still be the longest since the 1930s, which was the last time the government engaged in widespread public spending to overcome the persistent inertia in consumer and business spending...

Still, it's important to remember that most of these economic forecasts are based on computer models -- the same kind that completely missed the misery of 2008. That's because although economics is based on numbers -- and therefore lends itself to mathematical formulas -- since it's really a study of human behavior, such models can easily miss swift changes in consumer sentiment and other factors.

Click here for full story.