‘Growth’ is ‘predicted’ to ‘flatline’ at 1% for this and next year. That’s plus 1%, which is bad news. I have no idea what this means, and nor, it seems, do any of the politicians, economists or journalists who spray this kind of talk around. Percentages mean nothing unless it’s clear what the percentage is of – ask any statistician. Is it per annum, which means the base would be the twelve months preceding the date of the prediction? Or month by month, for example comparing October this year to October last year? Or some other formula? I know there’s an answer, but I have never seen it clearly written down. The Wikipedia article starts ‘This article has multiple issues’, and goes on from there, which just about nails it; but nowhere, as far as I can see, does it define a consensual mechanism by which it’s measured. And yet, they carry on spraying, for all the world as if they were saying something meaningful. They’re not.
I’m not going down the ethical, social or biodynamic byways, that’ll have to be for another day, but let’s just pretend that this ‘growth’ stuff constitutes, in some way, an increase in productive economic activity. So, if this activity, however measured (but with the proviso that it as to be productive), was, say, 100 units in year one, in year two it would be 101. In year three, just over 102, and so on. That’s an increase (however slow against perceived expectations). So, given that economic activity is increasing exponentially, year on year, how come what I’ll call well-being (for example, employment, earnings for those employed, support for those who aren’t or can’t be, education for entrants, etc.) is, by any objective measure, declining?
That’s enough. Well, nearly. On a lighter note, I heard Mervyn King tell us that he can’t predict what’s going to happen to the euro next week, never mind next year; and then go on solemnly to deliver his confident forecasts for growth, inflation, interest rates, solar flares, asteroid activities, alien invasion (okay, I exaggerate slightly). Ha ha. Not funny, actually.