• September 30, 2014

At a Small Campus in California, a Top-Ranked Economist Predicts What's Next

At a Small Campus in California, a Top-Ranked Economist Predicts What's Next 1

California State U.-Channel Islands

Sung Won Sohn

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close At a Small Campus in California, a Top-Ranked Economist Predicts What's Next 1

California State U.-Channel Islands

Sung Won Sohn

With highly paid analysts and resources to burn, giant financial companies should be able to pinpoint economic trends.

But Sung Won Sohn does plenty well, all on his own. In this year's Wall Street Journal ranking of the country's top economic forecasters, Mr. Sohn, a professor of economics at California State University-Channel Islands, in Camarillo, ranked third, the only academic in the top 10. Other economists high on the list are from big-name establishments like Societe Generale, FedEx Corporation, and PNC Financial Services Group.

The newspaper asked economists in January 2011 to predict the year's fortunes for 10 key indicators. Mr. Sohn's third-place finish echoed earlier performances in the prestigious ranking: He came in fifth in 2010, and in 2006 led the whole pack. This year, among academic economists, the only others in the top 50 were Sean M. Snaith, University of Central Florida, 28th; Edward E. Learner and David Shulman, UCLA Anderson Forecast, 39th; and J. Dewey Daane, Vanderbilt University, 45th.

How does Mr. Sohn, working alone at a small campus, fare so well? Aside from working tirelessly—"You don't just get up in the morning and write down a bunch of numbers; you have to keep up with it, every single day, every minute," he says by phone—he has vast experience. He has served in senior economic-adviser positions at the White House, major banks, and large corporations. Among his many present positions, he is one of five commissioners who oversee operations of the Port of Los Angeles, the country's largest port.

He says he started his career with a global outlook, as a Korea-raised graduate of Harvard Business School and the University of Pittsburgh, and now works 30 years' worth of contacts around the world: "For example, if I want to know what's happening in Greece, or in Detroit, I can call right now on the phone and get the firsthand information, on the ground. That's important. A lot of times, most economists analyze government data, and by the time you get that, it's really old news."

Since 2008 he has been at CSU-Channel Islands, an institution of 4,200 students, attracted by a longstanding friendship with its president, Richard R. Rush, who has led the university since it opened a decade ago. Another attraction, Mr. Sohn says, was the opportunity to set up the Institute for Global Economic Research at the School of Business and Economics. So far that is really just him.

What are his best tips?

In the short term, the United States will be OK, because the subprime mortgage crisis has been "somewhat cleaned up," businesses have "tons of cash," and financial institutions are "pretty well capitalized."

In the medium term, certainly Europe will fare poorly ("it's in a pretty serious situation, with a lot of bad sovereign debt"), and before long, China will, too ("too dependent on exports," "too government-directed" and thus liable to misallocate resources, "that bubble is going to burst").

In the long term, the United States will be hurt by entanglements with struggling economies.

"You can't be too optimistic," he says. "There will be more volatility and more uncertainty and unknowns." And yet, "I still believe as an economist that private capitalism is the best way to go," he says.

And he is usually right.

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