One swallow doesn’t make a summer…
.. Is a phrase we start to hear more often as we move through April and May and Spring gears itself to bid farewell for another year.
Every quarter we present at the NW Lancashire Chamber of Commerce business breakfast where we consider that quarter’s latest business confidence survey – called the Quarterly Economic Survey (QES), which pretty much sums up what it is all about.
You might wonder what links the seasonal habits of avian visitors to our shores and the local economy – a not unreasonable question.
But i was reminded of the title of this blog when trying to understand and make sense of the latest QES data because against the wider macro-economic landscape and it becomes clear, as it has been for every previous QES that “one set of data doesn’t make for a balanced understanding of our economy.”
What is particularly interesting ishow the QES can often have a feeling of slightly more optimism than the picture we are usually given in national media.
This would perhaps be no surprise to economists such as Anatole Kaletsky who have suggested for some time that our good old headline economic statistics of GDP and the particular way we measure productivity are somewhat wanting.
Wanting because, inter alia, they are inadequate at capturing the positive economic impact of the development and growth of the internet. See his articles in recent copies of Prospect magazine for a fuller and more elegant exposition of his views.
This isn’t just of interest to political-economy geeks (guilty as charged!). It is of deep, fundamental relevance to Government policy.
You see, Kalestsky (and others’) view is that our economy is far stronger than the economic statistcs suggest and and hence there is no need to persist with austerity policies which serve to starve demand from our economy. Precisely what we don’t need as oiur current economic problems are rooted in demand deficit – not Government deficits.
Kalestsky’s view that we must abandon austerity (it has done enough damage he would say) will seem controversial to some. But they should also familiarise themselves with the recent announcements by the IMF and the OECD who are in harmony with the view that Government should turn away, and quickly, from cutting expenditure to deal with national debt levels.
On the contrary, say both organisations, the way to get the debt down is to get growth up (and hence tax receipts up also – no sniggering at the back!). This means spending money on investment in the UK infrastructure. Pot holed roads could be a start.
To commit literary butchery, the great Roman orator (and extremely wealthy banker and tutor to the boy emperor Nero – that bit didn’t end well) Seneca said “Life is long enough if you know how to use it.”
When it comes to our economy, if Kalestsky is right we could say “The UK economy is strong enough if we know how to measure it!”.
Next time we might look at morality and ethics in the economic context – lawyers permitting!
For more information on the topic, please contact Stephen Gregson.