In the next few days, you’re going to see a lot of predictions about what’s going to happen to the economy and in business in 2009. If you’re an entrepreneur working on your business plan, we realize that the temptation is to read them, and take them to heart.
Don’t do it.
The fact is that 99% of the time these sorts of predictions are flat wrong (excepting, of course, the predictions we asked you to make for this week’s survey). Don’t believe us? Let’s take a little trip back in time to late 2007. Here’s what Business Week and MSNBC said were “Ten Likely Events in 2008″:
“There will be a backlash in the green movement after it becomes clear that many of the companies claiming to be green are in fact nothing of the sort.”
And then there was this:
“New York Mayor Michael Bloomberg will enter the Presidential race in February, after it becomes clear which nominees will get the nod from the major parties.”
Right. So by “likely” they meant “not going to happen at all.” Yahoo News points that other sources got it wrong as well. Last December, the National Association of Realtors sent out a press release with the following headline: “Existing-Home Sales to Trend Up in 2008.” And economist Rich Yamarone, the director of economic research at Argus Research in New York, told the International Herald Tribune that: “the economy will chug along, expanding at a solid 2.7 percent rate next year. He expects consumers, supported by a healthy job market and low interest rates, to do what they have done for 63 consecutive quarters: Spend more.” Well, at least he got the part about low interest rates right!?
If you were listening to Ben Bernanke early last year (and acted based on what he said) you probably kicked yourself several months later as well. In February he announced:
“I expect there will be some failures. I don’t anticipate any serious problems of that sort among the large internationally active banks that make up a very substantial part of our banking system.”