Not one to make wild claims, at the start of the recession Gordon Brown said that Britain was best placed both to withstand a global downturn and to lead the world out of its slump. Being the Chancellor for a decade and having a good idea what state the countries finances were, most of us had no reason to disbelieve him. Us fools.
The United States has become the fourth G7 country after Germany, Japan and France to emerge from recession while we enter an unprecedented six straight quarter of falling output.
The majority of economists, financial experts and the Chancellor all predicted a GDP rise last week only to see a -0.4% fall turning instead.
The economy is now almost six per cent smaller than it was before the start of the downturn, meaning Britain is creating £90bn less per year than 18 months ago.
The same economists, financial experts and Chancellor who were upbeat about everything days ago, were said to be amazed and shocked by these figures.
The simple translation must be that haven't had a clue what's been going on since the start and they don't have any idea how to fix it. And these guys are the experts!
They shouldn't be trusted with a weather forecast, let alone an economic one.
8 comments:
If you disregard the figures (which I'm sure the government would like you to do) you could make a pretty convincing argument that Brown's response to the banking crisis (i.e. making sure thousands of ordinary people didn't lose everything because of the irresponsible behaviour of certain financial institutions) did indeed 'lead the world', and influence other major governments, including the Obama administration, to do likewise... This is because Britain's competitors could hardly stand by as their own banks failed while our own had the benefit of being bankrolled - in the short-term at least - by the taxpayer.
Of course, we shouldn't forget that Brown's financial policies between 97 and 08 greatly contributed to our precarious situation in the first place, but that's by the by...
This is a terrible headline for the government - and, if one were needed, the final nail in their electoral coffin next year - but even the economies showing growth during the last quarter won't start to experience the real end of the recession until unemployment starts to fall again. Despite what the figures say.
I would expect Brown and Alistair Darling to be positive and optimistic because they have to talk the economy up, but it was the experts that most irked me because they got it so spectacularly wrong.
Yes, the financial world is a tricky blighter to pick alright... you'd read Taleb's book 'The Black Swan' (if you haven't read it already) and find lots to agree with, I'm sure...
Lucy,
the US recovery is likely false - remember we injected a trillion dollars of debt to get things going including tax advantages for buying a home and cash for clunkers. cash for clunkers was approximately one half of the 3.5% GDP growth in 3Q2009...
q
Would that be the W shaped recession i heard mentioned Q? The shapes the recession may be (U, V, W, L) are probably the only bit i have followed when the economists have been spouting their stuff.
Lucy,
Yep,a "W economic recovery" not to be confused with a W "egornomic retrocovery"...
The vast majority of economists in the US expect a slow recovery aka "U". perhaps 15% are predicting a "W" or "L" due to the affects federal debt or sudden commodity inflation (gasoline, then everything else). around 15% are calling for a "V" recovery because historically (hysterically i say) we've always had robust recoveriers.
Q
You got the W recession, we seem to have been landed with an I.
lucy,
the US economy is still bigger than numbers 2, 3, and 4 combined. thus, the US will likely lead the recovery and the rest will follow including the UK...
soon enough (2025 - 2030) china will have the biggest economy and everything can be blamed on them and laid on their doorstep - yeah, good luck with that - I'll be gone, but my daughters will have to deal with it...
q
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