I had noted in February that the members of the Assembly who were fearful that even the downwardly revised budget forecast did not capture the full extent of the fiscal challenges that the Commonwealth might have to face could well be correct.
Since I am not an economist, I did not have any special expertise to back up my concern. Nor did I have any real reason to doubt the professional judgment and commitment of the people who were involved in making the forecast or consulting about it.
I have a number of friends that I higly respect who sit on the advisory boards with whom the Governor consults. Any one of them knows far more about economics than I’ll ever learn.
And Rick Brown, the Secretary of Finance and the entire Planning and Budget staff are some of the finest, most knowledgeable and most dedicated public servants I’ve ever met. I spent quite a bit of time with them when I was Executive Director of the Wilder Commission and could not have been more impressed.
I just have this seat of the pants sense that volatility tends to outrace eminently rational predictions of where it will end up.
And I have spent a lot of time over the years talking to former Governor Doug Wilder who, when the economy starts to go south, invariably tells me to add another $50-100 million to the projected shortfall to see what the bottom line is likely to be.
In good times, the economy takes off far faster (especially in NOVA) than we can typically forecast and, in bad times, the combination of problems that arise tends to be worse than we can typically foresee.
In the previous post, Delegate Albert Pollard explained why he was concerned and how he ultimately became a lonely voice in his party when he wondered aloud whether the revised February forecast was still too optimistic.
Albert has always been the kind of individual who speaks his mind, who is willing to challenge the conventional wisdom, and doesn’t worry all that much if he is off-kilter with his own party on occasion. If you value authenticity, Albert Pollard has it.
It also seems to me that he raises an important question: if economic volatility (of both the desirable and undesirable sort) tends to outpace our rational analysis of it, how do we begin to factor it in to our analyses more fully?
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