The bad news that’s good news hits the headlines every day. Commissioning editors send their camera teams to the four corners of the world to film the most grief-stricken events for that night’s TV news programmes. Mass murders, volcanic eruptions, drought-created distress – you name it, they love it. And then there’s the bad news that they keep out of the headlines, off our TV screens…
Tim Harford is a best selling author and columnist on the Financial Times. In his article on 22 January, he offered a revealing insight into the bad news that editors don’t want to know about. He wrote:
“When making a series about economics for BBC2 in early 2006, I tried and failed to persuade my producer and director that a house price crash was pretty much inevitable. (They disagreed and we tore up the script for that episode.)”
Harford was convinced that prices would collapse by more than 40%. Should the BBC have alerted its viewers? This was bad news that would upset a lot of people who regarded the rise in the price of their properties as “hard earned”. They were living millionaire lifestyles by withdrawing some of the equity and spending money like there was no tomorrow.
This, indeed, was important news for buyers of properties in 2006 – bad news for them to be buying at the top of the cycle.
But was Harford a reliable forecaster?
He admits that “I was anticipating the mother of all crashes in 2003. And 2004. And 2005, 2006 and 2007”.
Sooner or later, Mr. Harford was going to be proved correct. And, no doubt the media would have flagged him up as one of the gurus who “saw it coming”. But would you bet your house on the forecasting skills of Mr. Harford?