I believe reporters should stick to reporting what happened earlier and stay away from predicting what will happen later. Why? The skills that make for good reporting (i.e., keen observation and understanding of facts and context, common sense, skepticism, a tenacity for truth) are often at odds with the skills one needs to be a forecaster or prognosticator (i.e., the ability to know the facts yet dismiss them when a hopeful hypothetical gets in their way, a high threshold for ambiguity, a childlike faith that unsolvable challenges can always be solved, more guts than brains, a willingness — some might call it a “wish” — to be astoundingly wrong.)
The most important reason journalists can’t predict the future is this, however: Reporters base their predictions on the wisdom of “the experts” — those who academically study a field or financially analyze a market. Unfortunately (at least for predictive purposes) such experts are typically active participants in the echo-chamber that spawns top-down conventional wisdom. By definition, “conventional wisdom” is never the source of bold predictions (just ask, President-elect Clinton). Conventional wisdom is more like the setting of Los Vegas odds — the average of all bets that results in a comfort zone for those who must pay-up if their prediction is wrong. But the events and developments that actually are “game-changers” are rarely, if ever, top-down and are never the result of conventional wisdom. Game changing events are long-shots or, as in one of my favorite new buzz-words, “black swans.”*
Because of this, end of the year prediction stories typically reflect a thinking that merely is a linear projection of the present reality: Last year, oil was going to get more-and-more expensive and we were all going to be buying hybrid cars by now. This year, there are predictions that gasoline is going to fall to $1 a gallon and the only way we will buy hybrids will be if the federal government slaps a big tax on gas (which I predict will soon be known as the Friedman tax**).
This year, the 2009 prediction stories all start with how bad the economy is now and how it will stay bad or get worse before it gets better, but not too much better, and “the future” could be anywhere from six months to maybe a year, or, several years. In reality (or fantasy?) those predictions are about as reliable as the Farmers Almanac, daily horoscope, wooly worms or the ground hog. In other words, they may be entertaining and they may get lucky, but they’re based on nothing more than conventional wisdom and semi-educated speculations.
I think a more honest and accurate prediction story would say, simply, next year will be just like this year except a little bit better or a little bit worse, unless something “big” flies in from left field. It will either be something good — say, a breakthrough related to alternative energy sources; or something bad — I could list a dozen, but it’s too early in the morning for me to start writing scary stuff.
*I recommend reading Nassim Nicholas Taleb’s book, The Black Swan: The Impact of the Highly Improbable that explores the nature of the rare and improbable events that occur much more than we think. Taleb argues convincely that our thinking is usually limited in scope and we make assumptions based on what we see, know, and assume. Reality, however, is much more complicated and unpredictable than we think.
**Thomas Friedman, with whom I agree on a surprising number of things, makes no sense to me on this one. The low price of gas is helping low-income Americans weather the current economic storm. I agree with his advocacy of policies that discourage our use of oil, however, I’d prefer to see tax policies that reward those who purchase hybrids and other alternative energy vehicles than punish those who can afford it least.