There are plenty of people making hay over credit agency Moody’s declaration that the UK economic outlook has turned ‘negative’. This may or may not be correct. The rider that there will be “a prolonged period of uncertainty” doesn’t look like a particularly insightful comment, whatever their data sources. It’s not that long ago – February 2013 in fact – since Osborne’s economic approach was hammered using (Moody’s) removal of its Triple A credit rating. This was because “the government’s debt reduction programme faced significant “challenges” ahead”.
Well, something must have happened that was unanticipated by the agencies if Moody’s rival, Standard & Poor only yesterday, after Brexit, decided they would remove the Triple A status, apparently joined by Moody’s, as well as Fitch (the third big agency). One suspects that Moody’s original claim had been rather overdone (and possibly this one too). Had they in fact restored their Triple A rating in the interim? It looks like it.
My point in all this is that these agencies are big businesses in themselves, with their own agendas. When they get it wrong it gets less publicity. Even uber-liberal cat loving Nobel economic guru Paul Krugman thinks it’s overdone :
“…right now all the talk is about financial repercussions – plunging markets, recession in Britain and maybe around the world, and so on. I still don’t see it. It’s true that the pound has fallen by a lot compared with normal daily fluctuations. But for those of us who cut our teeth on emerging-market crises, the fall isn’t that big – in fact, it’s not that big compared with British historical episodes. The pound fell by a third during the 70s crisis; it fell by a quarter during Britain’s exit from the Exchange Rate Mechanism in 1992; it’s down about 8 percent as I write this….This is not a world-class shock”
These appeals to authority, in this case credit ratings agencies, are an omnipresent feature of modern life, hugely abetted by the intrinsically unreflective nature of much of the internet and its social media. That is not to suggest that all such pontifications embody the fallacious appeal to authority – but clearly some/many of them do. Nearly all of the EU referendum campaign was built on unreliable speculation on both sides (which is why this was the single best argument I read on the topic).
I call it the Formula 1 argument. F1 as we know and (possibly) love it, is a suitably important sounding name for the fastest level of motor racing. It is overseen by FIA (Fédération Internationale de l’Automobile) otherwise known as the Association Internationale des Automobile Clubs Reconnus, where the last word means ‘recognised’. Recognised by whom? In other words, although FIA has historical precedent, it is essentially a self-appointed authority. There is nothing to stop the entire set of F1 teams decamping to a brand new tournament calling itself whatever it wants. Boxing has already recognised this, which is why there are currently four ‘world’ authorities – the WBC, WBO, WBA and the IBF. Big bucks all round with their many different titles to fight for.
Football is the same. Let’s dump FIFA and invite all the countries to play every four years in a new tournament, preferably in somewhere with an appropriate climate (not Qatar). We can call it the Mundial. Who decided a bunch of corrupt phonies like FIFA should still get the prize? The main reason of course is that like Formula 1, like boxing, there is a very healthy living to be made from the many lucrative sidelines., and it’s worth clinging on to.
And you get it in medicine, all the time. The phrase ‘top doctors’ is regularly trotted out, and is frequently associated with the most paternalistic self-important drivel. One of my favourites is when the grandly named King’s Fund pronounces. They self describe as a “health charity that shapes health and social care policy and practice”. Perhaps they do produce the odd good idea that no-one in the NHS would come up with, but in reality, they are a private body with plenty of well paid staff, some of whom may have a sketchy knowledge of actual health care delivery. An acquaintance of mine went for a job there, and it was very revealing. The key thing is the brand name, which relates to a long lost charitable fund named after King Edward VII (died 1910). Somehow, if it was just called ‘private NHS advisory think tank’ – a more accurate description – I feel its authority may appear diminished.
And on that note, what about the ‘Royal’ colleges of medicine, surgery etc? The presidency of these bodies is undoubtedly a classic bully pulpit, but what are they for? The answer is that they organise the odd educational event, they run (very good and necessary) postgraduate exams, and they produce not very good journals. None of this comes cheap. They also, however, choose to proclaim on NHS issues where they may or may not have any real insight. Naturally they tend to get a media hearing, and sometimes a governmental one. This lapses rapidly into ex cathedra nonsense in many cases, and gets the NHS nowhere. An academic colleague of mine, who is extremely competent, distinguished and sensible and did himself hold high office in such a college, wearily confessed to me recently how disillusioned he was by the institution “I’m not sure what it’s for these days”. Like most clinicians, he now favours his own specialty organisation when it comes to practical issues, and for very good reasons.
What makes an ‘expert’ and thus an ‘authority’ has been debated and often healthily derided in the EU referendum, one of its more beneficial side effects. As is often the case, Thomas Sowell provides the necessary wisdom. On balance, Eddie Izzard probably doesn’t make the cut.
So Moody’s, FIFA, numerous ‘royal’ institutions and many, many more, maybe your time is running out. It’s long overdue.