Seeing vs. believing. (Comment).

Our old friend Conventional Wisdom has come back to rear his uninformed head. Just when we start to believe CW's knee-jerk speculation and expectations, he whacks us in the backside.

Some examples:

Oil Prices: It was only a month ago that the steep run-up in gasoline prices was being blamed mostly on world oil markets--specifically, uncertainty over Iraq, Saudi production capacity, a contentious strike in Venezuela, etc. There was even talk about the United States tapping into its Strategic Petroleum Reserve in an effort to control prices, which were approaching the $40-a-barrel mark.

So what happened? Just as the U.S. entered Iraq, oil prices tumbled to the mid-$20s. So pump prices will tumble, too, right? Not right, at least for California, the result of the unusual way that gasoline gets refined in this state in order to meet environmental requirements. As pointed out in the Business Journal weeks ago, those costs can easily add a quarter to each gallon, no matter who wins in Iraq and how much oil OPEC happens to pump.

And don't look for much relief: According to a new government report, summertime prices nationwide could be 17 cents a gallon higher than a year earlier. California was singled out as especially vulnerable to tight supplies.

SARS: The mysterious illness otherwise known as severe acute respiratory syndrome did the seemingly impossible: land on page one in the midst of all-Iraq, all the time. It just goes to show the power of health threats, even if they are vague and far away. (Also, don't underestimate the power of those pictures from Hong Kong showing folks going to work wearing surgical masks.)

The thing is, SARS has not reached epidemic levels--certainly not in the United States and not even Asia. Dr. Shirley Fannin, an epidemiologist with the Los Angeles County Department of Health Services, was honest enough to label much of the reaction close to "hysteria' "If this was a truly pandemic disease like influenza," Dr. Fannin said the other week, "we would have millions of cases."

Even in Hong Kong, wrote Philip Bowring in a New York Times oped piece last week, there is irrational fear out of proportion to the danger." Bowring notes that among those infected in Hong Kong, "fewer than 15 percent have needed intensive care. The mortality rate has been around 4 percent, the norm here for pneumonia, which kills 2,000 to 3,000 people a year!' When folks are obsessed with fear, they tend to forget about the everyday stuff that's just as important, like diet, exercise and checkups. Bad idea.

Economy: Corporate America has had no shortage of excuses for its inability to snap out of a three-year-old slumber--all of which becomes part of the Conventional Wisdom until the excuses burn themselves out and a new one comes along. The latest came around the beginning of the year and involved the then-potential war with Iraq. "Whoaaa!!!" the CEOs were saying in unison, "we couldn't possibly consider expanding our operations until this nasty Saddam business is resolved."

Uh-huh. Well, now the war is almost over and guess what--more tap dancing about not wanting to jump into the pool. Meanwhile, the stock market, which was supposed to embrace victory in Baghdad with a boost of several hundred points, keeps stumbling along as of last Thursday.

Somebody is sure to come along with another excuse that will become next week's Conventional Wisdom. Before you start believing it, however, best to take a breath or two. There's a pretty good chance it's just passing through.

Mark Lacter is editor of the Business Journal.