Ron Paul vs. Paul Krugman on Bloomberg TV

[mustang19]

That quote proved it, too!

From that post, I take it that you’re no longer interested in contesting the observation that free banking produced worse economic outcomes than central banking.

See you later, Aristophanes.

[Aristophan3s]

EDIT: You know, you cannot expect us to read you papers as you provide them for evidence, but refuse to read ours. It really is as simple as that. You are here to troll us.

You have no idea what you are talking about. All your claims are rhetorical devices. You show no understanding of the concepts yourself, you are taking quotes from papers and appling no thought whatsoever to things (reapeating ad nauseum that “free banking” is worse than central banking to a group of people that do not only oppose central banking on econonmic justice grounds, but also on a “legitimacy of power” grounds) and when you do try to counter a point that is made…

“The fed doesn’t make predictions. They make forecasts…”

…you cannot even get it right…Tell me about economics when you won’t read the papers and cannot think through simple rhetorical contradictions.

My first criticism was in the first Bernanke paper that you posted. And every other academic criticism I have leveled has been met with omission and poorly thought out rhetoric.

Here’s an example:

A capital adequacy and reserve ratio are separate concepts. The latter was never enforced. The former, if enforced, could greatly reduce financial crises by requiring banks to put away funds to provide their own liquidity support during crises.

You argue for regulation (saying lack of it was bad) but then say, “well, the regulations weren’t followed.” That doesn’t negate their existence and codification…Regulations are counterproductive. Risk is the only unbiased regulation.

And when you say the 18th century is worse than central banking century, you provide no criteria for this assertion. There are far more variables in those kinds of quasi experiments than you can even explain to me. You also must not be familiar with the plethora (Rothbard, Schumpeter, Grey, and Friedman all come to mind) of literature than points to the late 1800’s as being the best generation of economic growth the US had.

When you get out of high school and grow the balls to read ‘long papers’ then post.

[mustang19]

My first criticism was in the first Bernanke paper that you posted. And every other academic criticism I have leveled has been met with omission and poorly thought out rhetoric.

The VOX paper (I have presented no papers written by Bernanke) suggested that a percentage point increase in interest rates raised house prices 2%. If you agree, I have never been in disagreement with you on that point. I was emphasizing how much more important fractional reserve banking was to credit expansion than minor changes in interest rates.

You argue for regulation (saying lack of it was bad) but then say, “well, the regulations weren’t followed.”

Basel II was enforced. Basel III is expected to be. I have not stated otherwise.

That doesn’t negate their existence and codification…Regulations are counterproductive. Risk is the only unbiased regulation.

It’s difficult to see how increased bank capitalization will worsen balance sheets during a recession.

The argument that deposit insurance eliminates bank runs has validity,
though it is questioned by the proponents of ‘free banking’ (see the final
section of this chapter). An important side effect of a system of complete
(i.e. 100 per cent) insurance of deposit is that it creates a moral hazard
problem. (You should recall this point from unit 24 Principles of
banking and finance.) Under full insurance, depositors lack incentives
to monitor a bank’s activities, because they will suffer no losses if the bank
fails. With depositors not monitoring the bank, its managers will have
an incentive to take greater risks than they would otherwise have done
(hence bank behaviour is distorted by the complete deposit insurance).
Two possible solutions are co-insurance (where deposits are less than 100
per cent insured) or requiring riskier banks to pay higher deposit insurance
premiums (see unit 24 Principles of banking and finance for details).

This provides support for regulation based on reserve ratios and capital
adequacy. An important manner in which excess asset risk can be regulated
is by linking banks’ shareholder capital to the risk held by the bank in its
assets. Central banks and other regulatory agencies have typically utilised
two measures of capital adequacy, namely the gearing ratio and the risk–
assets ratio.
The gearing ratio is based on bank deposits relative to bank capital. It is an
indicator of how much of the deposit base is covered if a given proportion
of the bank’s borrowers default.
Let the balance sheet be described as:
A = D + E
where A is total assets, D is deposits and E is equity. The gearing ratio, g =
D / E , hence D = g E , and:
A = g E + E
A = E (g + 1)
If μ is the rate of default on assets, and max μA = E, then:
max μA = A / (1 + g)
max μ = 1 / (1 + g)
If μA of assets is lost due to default, it can be absorbed by bank capital (E)
and deposits are covered. In other words, the maximum default rate which
can be absorbed without affecting deposits is equal to 1 divided by (1 +
gearing ratio).

The point of capital adequacy requirements is to increase the financial system’s ability to absorb losses and reduce the need for government guarantees to restore system functioning. Banks are required to hold a certain ratio of liquid capital to total assets to reduce the gearing ratio. It does not require any new spending, as the banks hold their own capital reserves to replenish losses. By doing this, they reduce risk throughout the financial system. If increasing the frequency and severity of financial crises is your goal, then perhaps you should oppose it.

You also must not be familiar with the plethora (Rothbard, Schumpeter, Grey, and Friedman all come to mind) of literature than points to the late 1800’s as being the best generation of economic growth the US had.

That was in spite of, not because of, the worsened business cycle under free banking. Wildcat banking was a notable problem under this system.

Edit: The point of the paper covering the 19th century business cycle was changes in cyclicality of credit over the period. It’s possible to compare the credit cycle before and after the introduction of central banking. After this occured, credit movements became more countercyclical, dampening the business cycle. This displays the difference between private and government management of credit.

[Aristophan3s]

Isn’t this…,

Basel I/II had capital requirements around 7% of assets. That’s nothing.

…this,

You argue for regulation (saying lack of it was bad) but then say, “well, the regulations weren’t followed.”

Basel II was enforced. Basel III is expected to be. I have not stated otherwise.

…?

and this is such a load of BS. I said,

You argue for regulation (saying lack of it was bad) but then say, “well, the regulations weren’t followed.”

Basel II was enforced. Basel III is expected to be. I have not stated otherwise. I have not stated otherwise.

But if I remember you said,

Under countercyclical policy, it reduces credit growth during booms and increases it in recessions.

which reinforces my point that

I understand that is old school Keynesian logic, but it hasn’t been followed for forty years.

and you also said this highly specious statement of

If you’re asking me my opinion on what the Fed should have done, I believe that they deviated slightly from the Taylor rule, and should have followed it better- which would mean slightly raising interest rates. But I wouldn’t expect it to have made more than a few percent difference in the size of the bubble.

So, this

I have not stated otherwise.

Is not true.

I’ll refer you to this…

met with omission and poorly thought out rhetoric.

and this

The Fed does not make predictions. It makes forecasts

The definition of “prediction”:

1. To state, tell about, or make known in advance, especially on the basis of special knowledge.

2. To foretell something; prophesy.

"Synonyms: predict, call, forecast, foretell, prognosticate"

Your petty semantics may have a causal relationship with your refusal to read a paper based on its length, as opposed to your refusal to read them based on the intellectual brutality that your perspective will have wrought upon it in them…

I was emphasizing how much more important fractional reserve banking was to credit expansion than minor changes in interest rates.

This is asinine. Fractional Reserve is still limited to what the market can sustain in its savings held at any given time, the central bank pushes money to the banks and this allows their natural fractional expansion to grow larger.

WHAT THE HELL DO YOU NOT GET ABOUT THAT?

Anyway, whatever the first link was used Bernanke as a citation in it.

My point was that that,

A reduction of 10 basis points in long-term nominal interest rates caused by an expansionary monetary policy shock raises real credit and house prices by about 0.3% and 0.2%, respectively, after ten quarters and real residential investment by about 0.25% after three quarters.

10 basi points and nominal long term goals will do nothing. Long term rates do not fluctate on that low if an intensity. Jesus christ. If you’d read that fucking Bagus paper you wouldn’t excuse this kind of logic from Bernake. It is like saying that, “If I take out one trillion gallons of water from the ocean it produces a .2%-.3% difference in saltyness of the water.”

That was in spite of, not because of, the worsened business cycle under free banking. Wildcat banking was a notable problem under this system.

Notice how you side step my point and interject another point (with a 20 page paper nonetheless…that irony fish is stinking up the…wait). This is a red herrring and also an example of being rude and talking at someone. I’ll remind you of my image of you and your ilk, “Cite our papers for your reasoning. If they challenge one of our foundational assumptions and ask you to acknowledge that point, say that their ‘papers are too long’. Then tell them you are ‘open to questions’.”

Because you do remember…

This is a rather long paper. I would appreciate any specific theses you would like to discuss.

Where are you getting your education from, by the way?

So, I’m done responding until you address the points in this paper.

Bagus - Term Structure of Savings - You need to understand the purpose of the yield curve not just its function. (Also, how banks use it) Understanding the yield curve only as a function is why you think the Fed can just willy nilly decide rates and we can somehow correctly forsee (predict, forecast; get it!?!?) the market conditions based on their assumptions.

Until then, I cannot be sure that you have any idea of the function of savings in the market at all.

Also, if you want to talk about the free banking system it might help to know that ther is a lot of historical stats that can be used to back up about any perspective. You will get nowhere unless you can do a better job of scowering these stats than the people here already have in other threads.

History of Money and Banking in the U.S. From the Colonial Era to WWII

The Panic of 1819

[NEPHiLiX]

Pre-Fed, the First and Second Banks of the United States acted in concert with the Treasury Department as early as the late 18^thC to expand the supply of credit. Afterwards (toward the mid-19^th), federal and state governments often ramped this practice up and intervened further: bailing out banks, suspending specie payments without requiring the bank to declare bankruptcy, etc. Furthermore, IMO the National Banking Act period (1863-1913) hardly qualifies as a genuine free banking environment to the degree that business cycles can be automatically chalked up to private banks.

http://http://mises.org/document/2745/Money-Bank-Credit-and-Economic-Cycles

Given that, your conclusion should have read: "Free banking with some government management of the economy appears to produce worse outcomes than central banking ". However, it does not follow from that hypothesis that central banking produces better outcomes than free banking without central management of the economy. In fact, it doesn’t even follow that free banking with some management is worse than a central banking system, a fact implied by your discipline’s methodology (where “is” in this sentence is taken as a certainty, see below).

The fact is that, as a result of his methodology, Mustang will never accept that free markets are more rational and effective and, given ours, we will never accept (unless an Austrian axiom is shown to be wrong, forcing a complete overhaul of our understanding of ABCT) central banking as being more rational.

There is clearly a one-way engagement here: Austrians can take on Econometric premises by examining their inherently flawed methods. Econometricists take on Austrians by pointing out their lack of econometric evidence, then can simply cite reams and reams of econometric data to support their positions. And to the Austrian response that far too many crucial things cannot be quantified for processing through formulae—Bastiat’s lessons, etc—the response is: “Yes you can, we have formulae for that!”. But those formulae, again, succeed only at quantifying something that can only ever be very abstractly and erroneously quantified for the purpose of humoring an econometric model. All econometric findings are, can only ever be, conjectural.

Finally, let’s not forget anti-Austrian Bryan Caplan’s admission that (in spite of some strong WE-KNOW-THIS econometric prescriptions and defenses) not a single of the most important ideas to have come out of economics since the inception of econometrics owes its existence in any way to econometrics (or even to mathematics). But still we’re battered with their “conclusive” findings…

[mustang19]

The fact is that, as a result of his methodology, Mustang will never accept that free markets are more rational and effective and, given ours, we will never accept (unless an Austrian axiom is shown to be wrong, forcing a complete overhaul of our understanding of ABCT) central banking as being more rational.

I’ll oblige.

Godel’s second incompleteness theroem.

Additionally, humans are not necessarily rationally self-interested or able to predict future events. Although not all Austrians deny this, it does indicate market failure.

On top of that, there’s problems such as agent heterogeneity, private vs. macroeconomic returns, human capital, and discontinuous preferences that ABCT doesn’t properly address, along with a range of other things looked at in detail here. Rothbard, for instance, claimed that wage rigidity existed but all available monetary base would always be utilized to the fullest extent.

Rothbard’s tendency to attribute all wage rigidity to governments and unions probably explains why he repeatedly emphasizes that “there is no such thing as ‘too little’ or ‘too much’ money, that, whatever the social money stock, the benefits of money are always utilized to the maximum extent.”[43] How can this be reconciled with Rothbard’s admission that given wage rigidity, increases in the money supply can increase employment, and decreases can reduce it?[44] In the final analysis, Rothbard’s characteristic lucidity conceals an underlying confusion: while on occasion he conceded that wage rigidity could exist on the totally free market, and while he repeatedly acknowledged that the quantity of money could affect employment given wage rigidity, he also invariably maintained that the quantity of money is always “optimal” and harshly criticized monetarists, free-bankers, and other economists concerned about avoiding monetary contractions or compensating for shifts in money demand.[45]

The Austrian theory also suffers from serious internal inconsistencies. If, as in the Austrian theory, initial consumption/investment preferences “re-assert themselves,” why don’t the consumption goods industries enjoy a huge boom during depressions? After all, if the prices of the capital goods factors are too high, are not the prices of the consumption goods factors too low? Wage workers in capital goods industries are unhappy when old time preferences re-assert themselves. But wage workers in consumer goods industries should be overjoyed. The Austrian theory predicts a decline in employment in some sectors, but an increase in others; thus, it does nothing to explain why unemployment is high during the “bust” and low during the “boom.”

ABCT also doesn’t explain why banks fail to consider central bank interest rates unsustainably low, while supposedly being perfectly able to set rates themselves, or why entrenpreneurs base investment decisions in interest rates rather than overall conditions.

Finally, let’s not forget anti-Austrian Bryan Caplan’s admission that (in spite of some strong WE-KNOW-THIS econometric prescriptions and defenses) not a single of the most important ideas to have come out of economics since the inception of econometrics owes its existence in any way to econometrics (or even to mathematics). But still we’re battered with their “conclusive” findings…

The success of countercyclical policy in ending crises such as the Great Depression, public infrastructure and education investments, and mandatory financial accounting standards have all been broadly validated by both theory and empirical evidence.

One rationale for countercyclical monetary policy is the possibility, never disproved in ABCT, of a recessionary slump, where saving exceeds investment for a prolonged period of time and an underutilization of available capacity occurs.

[NEPHiLiX]

Really? You retorted with Caplan? Really?? Please tell me that you’re not that lame and blind that you personally cannot spot how he purposely unkindly misquotes and misconstrues the AE. Well, I’d like to want to have more faith in you than that but, in any case, that guy’s like a scorned lover… I used him because he’s an econometricist–see the difference? I’m using someone in your field to put your field in “perspective”.

That being said: so what axiom then was wrong en route to the foundation of ABCT? Or do you even understand the progression? I have a feeling you just sped through what I wrote that before you started rifling off your response.

Well, since you’re apparently reading now–how would you like to take a look at Econometrician-extraordinaire Peter C. B. Phillips?

Laws and Limits of Econometrics

A few highlights from an icon IN your field:

Forty years of empirical experience in macroeconomic forecasting suggests that there are limits to our capacity to make predictions about economic activity. In fact, the performance of aggregate predictions has improved little over this time in spite of much early optimism, enormous bodies of research in macroeconomic theory and modeling, improvements in econometric methods, and larger data sets of better quality. A primary limitation on empirical knowledge is that the true model for any given data is unknown and, in all practical cases, unknowable. Even if a formulated model were correct it would still depend on parameters that need to be estimated from data.

Second, all models are wrong.

Yet these models continue to be used, often because they contain a kernel of truth that is perceived as an underlying ‘economic law’. Also, many see it as advantageous to use this information in crafting an empirical model even though it is at best only approximately true…

…when the models give results that are considered totally unrealistic, the modelers themselves make intercept adjustments to get the forecasts back on track…

See what I did there?

PS: no AE thinks people can predict the future and your quip about rational self-interest demonstrates that you have missed the essentials of Mises’ Human Action.

[Aristophan3s]

…never disproved in ABCT…underutilization of available capacity occurs.

More rhetoric that shows lack of familiarity of the vicitim. Sigh.

all the complexities of human choice and action working within a closely coordinated price and profit system. What looks like non-productive idleness may actually be very productive, indeed essential to the smooth working of the system. Is it more productive for a highly trained but unemployed engineer to bag groceries for pay or to invest time without pay in looking for an engineering job? If he or she took the grocery bagging job, Keynes would presumably be satisfied; we would be closer to full employment. But the economy would clearly not be more productive, which it must be to create new jobs. We should also keep in mind that an employment agency employee job searching for the engineer would be considered gainfully “employed,” while the engineer doing the same work would still be “unemployed.”

This brings us to Hutt’s crucial concept of sub-optimal employment, not fully worked out in this book, but a crucial contribution to economic thought. Government intervention to stimulate the economy and increase employment not only reduces employment over the long run. It also creates an enormous amount of “sub-optimal employment, ”which means that it leaves people unable to find the work for which they are best suited.

My last post got moderated. Luckily, I copy/pasted it and will repost if necessary. Mustang stop pretending like you are super familiar with the Austrian school.

[mustang19]

Models have problems, no disagreement there. They just seem to be more consistently in disagreement with Austrian theory than the other way around. In fact, Austrian Economics is a theoretical model.

Second, all models are wrong.The
models developed in economic theory are metaphors of reality, sometimes
amounting to a very basic set of relations that are easily rejected by the data. Yet
these models continue to be used, often because they contain a kernel of truth that
is perceived as an underlying ‘economic law’. Also, many see it as advantageous to
use this information in crafting an empirical model even though it is at best only
approximately true because to do so may well be better than using an entirely
unrestricted system or an arbitrarily restricted one. Whether or not it is worthwhile
doing so is, of course, an empirical matter..

In light of that statement, it appears that the author is aware that models, including Austrian Economics, can only be approximations of reality.

More rhetoric that shows lack of familiarity of the vicitim. Sigh.

That discussion does not discuss the possibility of a recessionary slump. Specifically, it states that:

The application of the conceptions of this essay to monetary theory
has yet to be done

on page 103.

My last post got moderated. Luckily, I copy/pasted it and will repost if necessary. Mustang stop pretending like you are super familiar with the Austrian school.

I apologize if I gave that impression. Please give me any background information when necessary.

[Caley_McKibbin]

Mustang19, this is not a novel discussion by mises.org standards.

Btw, some (many?) here disagree with Rothard about there not being too much or to little money.

[Aristophan3s]

The application of the conceptions of this essay to monetary theory has yet to be done on page 103.

And apparently you really are incapable of extrapolating the concepts.

Please give me any background information when necessary.

It starts by reading the source material instead of just typing in keywords.

Also,

The Fed does not make predictions. It makes forecasts

[NEPHiLiX]

Please give me any background information when necessary.

Here’s a novel idea: read the material yourself.

…the author is aware that models, including Austrian Economics, can only be approximations of reality.

No, the point is to show empirical evidence that you’re being a prat by virtue of the way you champion econometrics as superior to AE even though you admittedly don’t understand it (or even the limitations that the methods used in your discipline should impose upon you regarding how you present findings). You should consider changing your name to Krugman19. Furthermore, you’re not using “model” here in the way that the author is, which should be obvious even to you (though I won’t hold my breath).

[mustang19]

Austrian Economics is a model like any other, a theoretical construct describing economic processes.

If there is any point in the links provided that specifically discuss the possibility of a recessionary slump in Austrian theory, and how this cannot occur, please direct me to them.

A “savings glut”, which is what we are in now, occurs when firms are unwilling to borrow due to reduced expectations of future demand. As firms reduce their investment, demand falls and potentially remains below capacity indefinetly.

[NEPHiLiX]

Furthermore, you’re not using “model” here in the way that the author is, which should be obvious even to you (though I won’t hold my breath).

Austrian Economics is a model like any other, a theoretical construct describing economic processes.

So you really are being wilfully clueless then. You don’t even understand the unambiguous use of the term “model” used in that paper by one of today’s most noted econometricians. I genuinely feel sad for you.

[z1235]

@mustang19

If there is any point in the links provided that specifically discuss the possibility of a recessionary slump in Austrian theory, and how this cannot occur, please direct me to them.

A “savings glut”, which is what we are in now, occurs when firms are unwilling to borrow due to reduced expectations of future demand. As firms reduce their investment, demand falls and potentially remains below capacity indefinetly.

Mustang, this is basic AE stuff. You’re neither debating nor trolling here. You’re asking to be educated – for free.

[mustang19]

Mustang, this is basic AE stuff. You’re neither debating nor trolling here. You’re asking to be educated – for free.

I’m already aware that the ABCT is more than a little contentious. I was asking for a defense to be presented from someone here. Theory and an individual’s interpretation of it are not necessarily the same.

ABCT essentially requires entrepreneurs to rely on interest rates in investment decisions. If they instead rely on other information about market conditions, then the theory does not necessarily apply.

So you really are being wilfully clueless then. You don’t even understand the unambiguous use of the term “model” used in that paper by one of today’s most noted econometricians. I genuinely feel sad for you.

Oh, silly me. But it’s not so much any individual axiom of the theory that is incorrect, but the incompleteness of the theory as a whole.

AE does not consider preference discontinuity- indifference to minute changes in utility, which are important in instances such as public infrastructure. Additionally, it doesn’t fully account for transaction costs and externalities- to give a concrete example, air pollution or secondhand smoke as a form of pollution that cannot practically be litigated against. AE is only internally consistent as long as it excludes a range of real world phenomena.

No offense. Just sayin’.

PS: no AE thinks people can predict the future and your quip about rational self-interest demonstrates that you have missed the essentials of Mises’ Human Action.

Had to test for Randroids. Fortunately, this place looks clean.

[Aristophan3s]

Here is Rothbard on “models” (Page 576):

“It will be noted that we have avoided using the very fashionable term “model” to apply to the analyses in this book. The term “model” is an example of an unfortunate bias in favor of the methodology of physics and engineering, as applied to the sciences of human action. The constructs are imaginary because their various elements never coexist in reality; yet they are necessary in order to draw out, by deductive reasoning and ceteris paribus assumptions, the tendencies and causal relations of the real world. The “model” of engineering, on the other hand, is a mechanical construction in miniature, all parts of which can and must coexist in reality. The engineering model portrays in itself all the elements and the relations among them that will coexist in reality.”

preference discontinuity- indifference to minute changes in utility…air pollution or secondhand smoke as a form of pollution that cannot practically be litigated against. AE is only internally consistent as long as it excludes a range of real world phenomena.

This is not true. Preference discontinuity is a part of marginalism…

Externalities, so far as they actually become a problem, are ‘litigated’ by the state (in reality), or by means of property rights. Secondhand smoke is a strawman for externalities, anyway.

It is not su much as AE “doesn’t account for” these things, as much as your 15 year old high school ass hasn’t read enough of it.

Theory and an individual’s interpretation of it are not necessarily the same.

Obviously. This must be why you won’t read any of it. Some kind of epistemological qualm with experience vs. second hand accounts (where you are wanting for secondhand experience hahaha). There is a word for this…but I won’t post it o_O … !!

I need to remind people that Mustang19 said this:

The Fed does not make predictions. It makes forecasts

even though,

The definition of “prediction”:

1. To state, tell about, or make known in advance, especially on the basis of special knowledge.

2. To foretell something; prophesy.

"Synonyms: predict, call, forecast, foretell, prognosticate"

This demonstrates that he has no credibility; his lack of understanding of rhetorical contradiction (which I think is why no one can shut him up).

Mustang, I will add your idiotic quote to my signature if you do not tell me where you are going to school at (or went to school).

[z1235]

Aristophanes, regardless of Mustang’s initial intentions or motives, I don’t see profit in completely shutting the door for him to learn something unexpected in the process, as your tone seems to be attempting. There’s rarely a need for rudeness, IMO.

[Aristophan3s]

Read these posts, man. I do not care.

[mustang19]

This is not true. Preference discontinuity is a part of marginalism…

If so, I don’t think it’s consequences are fully realized, but I get it.

Externalities, so far as they actually become a problem, are ‘litigated’ by the state (in reality), or by means of property rights. Secondhand smoke is a strawman for externalities, anyway.

We’re not talking about empirical validity. It is possible for one to conceive of a system where the expected utility of secondhand smoke is strongly negative!

Externalities, so far as they actually become a problem, are ‘litigated’ by the state (in reality), or by means of property rights.

Nevermind transaction costs then, I’ll try building up a legal case for suing General Motors and the major car companies $50 trillion for causing global warming.

It is not su much as AE “doesn’t account for” these things, as much as your 15 year old high school ass hasn’t read enough of it.

Must be all that keynesian indoctrination in the school system, amirite?

Mustang, I will add your idiotic quote to my signature if you do not tell me where you are going to school at (or went to school).

Go ahead. Knock yourself out, Aristophanes.

If economists can reject empirical evidence, they’re probably not the only science that can get started on this. I’ll look into registering my praxeological surgery practice where I poke patients with pointy things in accordance with human action.

Anyway, I think I need to lay off from posting here. If people want to remain in their own circularly reasoned praxeological space, I’m cool with that. I just expected a lot more, uh, econometrics, and I came to the wrong place.

Oh, by the way, a prediction is an expectation of a specific outcome, while a forecast is an expectation of a range of outcomes. I learned that at Storyland Preschool, my alma mater.