It’s amazing how the commentariat, and if they are to be believed, their readers, are all keen economists, avidly scrutinising GDP figures. Hence the excitable reaction to the provisional growth figures of the last quarter, which were of course, negative.
This was aggravated by the ascendancy of Ed “Blinky” Balls, who because he is not entirely stupid, did not himself go overboard. He didn’t need to, given the media froth.
It seems to me that there is a neat parallel with domestic finances, which are particularly lean right now, not surprisingly. I anticipate things will be better in 12 to 18 months time. Given the train wreck of the public finances under the Brown/Balls Terror, it would be remarkable, would it not, if the path out of recession was complication free?
In any event, as the dust settled, a more measured approach has emerged, summed up by Fraser Nelson, Alex Brummer, and the not remotely Tory Hamish Macrae. The last named prompted a slightly huffy response from the chief economist from the Office for National Statistics.
However, it was a Labour chancellor, Denis Healey, who observed that:
“The figures are so often wrong. When I was Chancellor they were nearly always wrong.”
He did so as part of the audience for a lecture by yet another chancellor, Nigel Lawson. The lecture, inspired by Adam Smith, is a typically brilliant mix of calm analysis and precise prose, entitled Five Myths and a Menace.
Lawson’s writing befits his former profession as a distinguished journalist, and adheres to the advice of the great medical writer, Richard Asher, who hated wordy, specious and complicated prose. His views are well summed up in a masterly piece called Why Are Medical Journals So Dull?, from more than 50 years ago.
That piece should be required reading for all medical writers, as Lawson’s should be for all of today’s hacks and politicos.
The next milestone is the provisional GDP figure to be released in April 2011. If this is also negative – and there is not much consensus on the likelihood of this at the moment – then technically it’s a recession again. That is something The Knife poured scorn on a few posts ago.
However, in the interests of fairness, here are Labour’s responses, via the then chancellor Alistair Darling, after the sixth successive negative quarter:
“We’ve always said that we remain cautious as a result of the high degree of economic uncertainty.
‘That’s all the more reason to continue the action the Government is taking. To remove it now would be madness.”
If it was fair comment then, it is certainly so now.