Wary of the experts

Back in the old days — the ’90s — Minnesota Public Radio frequently sought the expertise of a “mortgage consultant” to comment on the housing market. Then one day, a sharp-eyed editor — fine, it was me — noted that he often said it was a good time to buy a house. Forgetting for a fact that it really was a good time to buy a house (if you sold before the bubble burst), it didn’t make a lot of sense to seek analysis from someone who was in the business of processing mortgages.

Those who often have the most expertise in a given field, also often make their money in that field (that’s why they’re “experts”) and, hence, lack — shall we say — objectivity. Political “analysts” in the Twin Cities are quite often people who are directly tied to a particular political party. When’s the last time you heard a DFL “analyst” criticize the DFL? Or, similarly, a Republican “analyst” criticize Republicans?

That’s why reporters, who cover these people every day for no other reason than that’s their job, often make better “analysts” than the analysts. Unfortunately, most political reporters don’t want to be analysts because they think it’ll hurt their credibility with people who may not agree with them.

This was a particular problem, too, with questions of investing. Prior to the collapse of the housing bubble, and subsequently the stock market, it was always the perfect time to invest in the market, we were told. How many times did you hear that leaving your money in the market was the best thing to do during the market collapse? Maybe it’s true. Maybe it’s not, but what else would you expect someone in the business of the stock market to say?

National Public Radio provided a good example of the conflicts between “analysts” and reality this afternoon when All Things Considered host Robert Siegel called up a Realtor to talk about today’s pathetic housing sales report.

“Houses that were selling for 45-50 thousand are selling in the 70s now. We have very little inventory. We hit bottom in February, ” she said, suggesting that the worst is behind us and low interest rates make it a good time to buy a house. And maybe in Manassas, Virginia, that’s the case. But today’s report appears to contradict that assertion, given that it was the worst one-month drop in 40 years. But what else did Siegel expect her to say? It’s a lousy time to buy a house? Save your money?

Fortunately, NPR turned to other “experts” to say that.

  • http://www.thedeets.com Ed Kohler

    I attend a real estate conference that has a bulls vs bears prediction segment twice a year. The bulls are always agents. The bears are always economists. I don’t think I’ve ever heard an agent say that now is not a good time to buy.

    The experts who crack me up the most are working for the yellow pages industry. Rather than make pragmatic but believable statements explaining that the industry isn’t what it once was, but still significant, they act like it’s bigger than ever.

  • John P.

    “When’s the last time you heard a DFL “analyst” criticize the DFL? Or, similarly, a Republican “analyst” criticize Republicans? ”

    It was Tom Horner on MPR. That’s why I respected him and his opinions so much. Then again, I guess he’s not quite a Republican any more.

  • Bob Collins

    Then let me tell you an inside story.

    It was primary season and I don’t recall what the race was, but I think it was governor, and the two analysts — I THINK it was Meek and Horner but it may not have been — were sizing up the candidates of the other party.

    The DFL analyst just thought the GOP candidate that was the best was CLEARLY the weakest. And the GOP analyst thought the DFL candidate who was the best was CLEARLY (to anyone who knew anything about politics) was the weakest.

    And everyone knew what they were doing and why they were doing it.