...statistics. That's the saying isn't it? Churchill I believe but I could be quite wrong. But do you ever think that your life is conditioned, not by reality, but by the statistics and whatever else you are told by the government? Because the news is ceaselessly punctuated by talk of "recession" and "austerity" we think that times are really tough; we mope about with long faces, huddled against the wind and rain of this unseasonably miserable late spring (which seems to be in perfect sympathy with the bleak landscape painted by the news media.) Despite the unprecedented low interest rates, we avoid the temptation to splurge our money around and we lend it to the banks who delight in paying us no interest. Thanks very much.
But what if none of this were true? What if you awoke tomorrow to headlines full of stories of growth, economic boom times just around the corner and general all round cuddliness? No question you would feel much better and nip down the high street with a spring in your step to buy that nice new pair of shoes, electronic gadget, car, whatever that you'd been coveting but had denied yourself thanks to the general apocalyptic scenario oozing from your TV/radio/newspaper/web browser.
You see none of us really knows what the rate of inflation or unemployment is. I bet you haven't gone out and tried to calculate the balance of payments position have you? All you know is what you experience and what the government tells you. And my experience tells me the economy is booming.
I base this on our latest round of so-called "home improvements". Since you ask, we've had a new shower put in, all sorts of landscaping work in the garden (mostly involving cutting some things down and ripping other things up) and we've eventually got round to this new garage+studio over, that we've been planning for years. So we are definitely doing our bit to kick-start the economy.
A gardening war zone in a small corner of Marshside Acres
Very laudable, I hear you say, thanks awfully but so what? Well the thing is that, given all the gloomy news around these days, you might expect tradesmen to fall at your feet, begging to be the chosen one and desperate to start work that very day at prices so low as to have you fearing for their children's welfare. But instead of this, you get a scenario of unreturned phone calls, quotes at levels to make your average Russian oligarch think twice and in terms of start dates it's "...ooh, not until the end of next month, mate. At the earliest."
So I deduce from all this that this talk of recession is a nonsense. It's a kind of corollary of the North Korea situation, where everyone's told they're living in a land of milk and honey, despite the fact that they live on a diet of boiled insects and old shoes (actually, the UN is encouraging all of us to eat more insects so maybe things aren't so bad there?)
My point is though that in economics, expectations are a crucial factor. So if you expect things to look up, then you will behave quite differently to how you would if you thought a North Korean lifestyle was your imminent destiny. That being the case, coupled with my point about none of us knowing what the level of the various economic indicators really is, why doesn't the government just feed us a diet of good news: unemployment is almost zero, retail sales are booming, the NHS has invented a cure for death, etc., etc. The economy would perk up in no time and lo, a self-fulfilling prophecy has come about.
Plus, interest rates would go up and those of us with a few quid in the bank might be able to eat again. Spare a fiver for a Starbucks, guv?
Another corner of Marshside Acres disappears under cement - booming economy clearly pictured
