 From the Ludwig von Mises Institute, this is the Mises Report, a public policy and economic issues commentary series. In this program we present another part of ten great economic myths. The material heard today was prepared by Murray and Rothbard, Ph.D. of New York Polytechnic Institute for the Mises Institute. Myth number five. Economists using charts or high-speed computer models can accurately forecast the future. The problem of forecasting interest rates illustrates the pitfalls of forecasting in general. People are contrary cusses whose behavior, thank goodness, cannot be forecast precisely in advance. Their values, ideas, expectations, and knowledge change all the time and change in an unpredictable manner. What economists, for example, could have forecast, or did forecast, the cabbage patch kid craze of the Christmas season. Every economic quantity, every price, purchase, or income figure is the embodiment of thousands, even millions, of unpredictable choices by individuals. Many studies, formal and informal, have been made of the record of forecasting by economists and it has been consistently abysmal. Forecasters often complain that they can do well enough as long as current trends continue. What they have difficulty in doing is catching changes in trend. But of course there is no trick in extrapolating current trends into the near future. You don't need sophisticated computer models for that. You can do it better and far more cheaply by using a ruler. The real trick is precisely to forecast when and how trends will change. And forecasters have been notoriously bad at that. No economists forecast the depth of the 1981-1982 depression and none predicted the strength of the 1983 boom. The next time you're swayed by the jargon or seeming expertise of the economic forecaster, ask yourself this question. If he can really predict the future so well, why is he wasting his time putting out newsletters or doing consulting when he himself could be making trillions of dollars in the stock and commodity markets? You've been listening to the Mises report from the Ludwig von Mises Institute. Funds for this series come from the Friends of the Ludwig von Mises Institute, a non-profit educational foundation. Address your comments and inquiries to the Mises Institute, Thatch Hall, Auburn University, Auburn, Alabama, 36849.