Tough times make his job more fun, economist says

To many of us, economics is that subject we struggled with in college and then gladly purged from our memories when we left. Way too complicated and, frankly, kind of boring. Then you grow up and wish you’d paid a lot more attention to how it all works.

Luckily, people like Anil Puri weren’t daydreaming in class. Not only was he paying attention, he loved it and has devoted a good part of his career to trying to explain it to people.

In the way that some people love to predict Academy Award or Super Bowl winners, Puri is an economic forecaster. He likes to figure out which way the economic winds are blowing and then put his findings on the line.

Easy to do in times of relative calm (remember the mid-1990s?). What I wanted to know was whether the juices flow much faster during uncertain times like these.

“It’s actually more fun when it’s challenging,” Puri says, “because you’re actually exerting more reasoning power and people are paying more attention.”

That, of course, makes the stakes higher. “It’s never really easy, in fact,” he says of economic forecasting. “Every situation, every time, there’s a slightly different twist on it, whether you’re looking at inflation or economic growth, the reasons why they’re going up or down. You’re constantly working at making sense of what’s happening. It’s never just a gimme. It always requires work. Some situations are harder, like now. The world is changing dramatically in a fundamental way, and it becomes riskier to forecast.”

It’s not like Puri doesn’t have a day job. He’s the dean of the Steven G. Mihaylo College of Business and Economics at Cal State Fullerton, where he began in 1977 as an assistant professor.

“If there’s one thing rampant in economic forecasting, whether it’s the stock market or other kinds of financial decisions, it’s that people have too much information and confusion and too many people are saying, ‘I know the answer,’ ” he says. “The reality is that nobody has the answer, but we have ways of interpreting what is happening.”

Puri grew up in India and came to the U.S. for doctoral studies at the University of Minnesota.

He published his first economic forecast in the early 1990s and since 1994 has teamed with the Orange County Business Council to present his year-end analysis and forecast at its annual conference. He updates his forecasts in April.

Although he never wanted to fit a stereotype as a dry economist, Puri wasn’t sure how people would take to his predicting. Which, of course, only made things more interesting.

“One, it’s a challenge to see if I can forecast something and it turns out to be true or not,” he says. “But second, I was amazed that people were actually paying attention. They listened to me and got something out of it. They got sense out of the chaos.”

He chuckles at my confessions of shortcomings in grasping economics. “That comes when people have formal training in economics and spend a number of years thinking about things,” he says. “The average person doesn’t have that kind of training. It’s not a matter of smarts, but of taking the time to study economics and think and concentrate on it. I’m not any smarter than the average guy out there.”

I couldn’t let him go without some quick predictions.

He sees a continuing downturn in local housing prices for the next 12 to 18 months, with another 10% to 15% decline in prices.

As for gas prices, he sees them settling in closer to $3 than $4 a gallon in the months ahead but doubts we’ll ever see $2-a-gallon gas again. He sees slower economic growth for the next year but not a full-blown recession.

With such complex factors at play and with people putting credence in his opinions, does he agonize over his predictions?

In a word, no. “I like to be right more often than wrong,” Puri says, “but in economics, we’re not magicians. We rely on numbers and our understanding, but this is a dynamic, changing world. Every once in a while we’re thrown a curve by reality, so we have to be humble about what we do.”

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Dana Parsons’ column appears Tuesdays, Thursdays and Saturdays. He can be reached at (714) 966-7821 or at dana.parsons@latimes.com. An archive of his recent columns is at www.latimes.com/parsons.