‘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.
I'm glad someone else is in the dark! I'm also confused about the larger picture of 'growth'. One expert says the earth is already overcrowded with future dire consequences; another says 'Yippee! We're all going to live longer and cure all disease!' To what purpose? I know I sound brutal but I really don't get it!
ReplyDeleteI think you absolutely get it, RR. When you say 'in the dark', I think you're at risk of falling into a trap which I'll call 'Mustn't Grumble'. Because the media kowtow to so-called expertise, they cow us into submission - whereas in fact they haven't a clue either. Oh dear, we're sliding into intellectual entropy.
ReplyDeleteSorry, bit heavy there. What's the weather like where you are?
The weather is pleasantly cool and grey for the visit of Obama.Summer arrived last weekend and we had a temperature of 33 degrees C.! Then it went away again. What do you think about the new alliance between America and Australia? I feel a bit uncomfortable about it myself, because I think we're bound to be Asian in 100 years time.
ReplyDeleteThanks for 'following' me. (I don't get many followers at my age!)
But, all the time our minds are occupied with the economy, eurozone, increasing energy bills, asteroids, David Beckham's future etc, the darker, deeper political shenanigans continue.
ReplyDeleteFor many years, the integrity of war journalism has been compromised by propagandists who are attuned to the benefits of embedded reporters, at the front-line. Why should it be any different with economics? Yes, you can interview the Chancellor, and these are the questions you'll ask.
A Guardian journalist has clarified that 1% growth isn't nearly enough to take up the new entrants to the labour market. What he didn't mention was those exiting the labour market at the other end; but of course government policy is to keep them working till they drop, isn't it, because they need the tax and can't afford the pensions and ... oh, I give up!
ReplyDeleteWhen's the invasion? I want to have my camera ready.
ReplyDeleteAs to growth, I think we've done enough of it. Time to do a bit of pruning.