Economics: Anything Can Happen

TORONTO, ONTARIO - A big trend lately seems to be the excuse that "nobody saw the financial collapse coming." A variation on the theme--much more reasonable in my opinion--was President Barack Obama's admission on 60 Minutes yesterday that he was surprised at the rate at which jobs have been lost. No, I didn't predict the financial collapse, and I certainly didn't predict its rate. However, I get very tired of people being surprised by these kinds of events. Unpredictable things happen, and especially when there's some reason to believe that some underlying fundamentals are not in order (for example, the housing market), one should not act completely surprised when they do.

Recently, I had reason to go back and listen to a portion of the Year in Review for 1991 that I produced early in 1992. I made these hour-long programs yearly for a time in the early 1990's. I closed each of the programs with a short poem on the year, and for that year it was the following (excuse the bad poetry):

At the beginning of 1991,
The world stood ready for war.
Nobody knew how soon it would be done
Nor that casualties would stay a low score.

Few dreamed that the Soviet Union would end,
That Mikhail Gorbachev would be out of work,
That to Russia foreign aid we would send
Or that for free enterprise they’d go berserk.

Who could have possibly foreseen
Abandoning a base in the Philippines,
The economy staying slow and lean
And that a judge would be accused behind the scenes.

If this past year has taught us one thing
It has taught us to respect unpredictability.
Perhaps of these events someone should sing
That the new world order requires adaptability.

So keep both eyes peeled
As you face this new year 1992,
May all your ills be healed
And, the best of luck to you.

A lot can happen in a year. The Soviet Union can cease to exist, or world financial markets can go into a free-fall. Don't say now that something unthinkable can't happen in the remainder 2009, or act surprised if it does.