One of things that has been worrying me in recent weeks has been that people in Britain seem determined to be more gloomy about the economy than the data warrants. You can pick that up in the letters columns of the newspapers, in surveys of public opinion and indeed in comments by readers in response to my writings.
If you look at the data there is a clear slowdown taking place, maybe even the “Wile E. Coyote” effect that I referred to a few days ago.
You know the scene in the Warner Bros cartoon: Wile E. is chasing the Roadrunner, who screeches to a halt just before going over a cliff. Wile E. fails to stop, goes over and keeps on running until he suddenly realises there is nothing below. Only then does he plummet to the ground.
But even if this is happening the real problems are likely to be towards the end of this year and next year rather than now. Employment is still within a whisker of record levels, living standards ditto. Sure, things will get more difficult and I could see growth next year as low as 0.5 per cent. Sure, inflation is a real concern. But this nothing like the inflation chaos of the 1970s or the unemployment misery of the 1980s and early 1990s.
So why the gloom? Is it just reflecting contempt for the present government and its leader? Or is it that we are not used to any pause in the growth of living standards? Or are the people to make a noise unrepresentative of the population at large? Or, maybe, could the professional economy-watchers be wrong and the gloom-mongers right?
People believe that what goes up must come down. We've been going up for so long now that there hasn't been a proper, noteworthy, recession since I was a kid (I'm nearly thirty). This has led to a lot of inefficiencies in the economy and people know this. How many people sat at work actually admit that the vast majority of their time contributes nothing? How many of these work for the big institutions that supposedly support society? How many people see huge discrepancies between where effort is expended, pointless service industries and pointless consumables, and not to where it should be going, environmental problems and social problems e.t.c. People basically know that the next time the wheels come off it could be far worse than it's ever been before... The "doom and gloom" factor is the worry at what could happen!
Posted by: loza | Tuesday, 15 July 2008 at 01:02 PM
You ever hear of the South Sea Bubble? Because that basically what we've been looking at for the past couple of decades and artificially created boom based on cheap credit and ever increasing cost of property. Even the City knew it was unsustinable but was going to milk it and us for all it was worth and boy, have they taken this country to the cleaners!
I don't know what's gpoing to happen or how it's going to end because their are now too many factors beyond our control at play. As an old mate used to say, "All the Jokers are wild"!
As loza say's this could be a lot worse than any that has gone before as most of our "Industry" is now services rather than manufacuring, while we also have to import everything, including basics.
What's the percentage of accountants, MBAs, Meeja types etc do we have in relation to engineers and technicians, in comparison to Germany, France, Japan, China and Korea? When I left the Offshore Engineering Industry over fifteen years ago we were already finding it hard to get UK trained engineers and were having to find them abroad.
Posted by: flipped | Tuesday, 15 July 2008 at 02:52 PM
I am asking people to put a sticker on the back of their car with the initials of the PM, beside a flag of the UK. Many other people seem to be doing this. Support and loyalty to him is still very high.
Keep GB running the GB.
The Lord Haw Haws in the tory party need to grow up and shut up. Stop putting our country down. :
Posted by: dirty European socialist | Tuesday, 15 July 2008 at 04:21 PM
dirty European socialist:
You claim to be a socialist and yet you support Gordon Brown? The political landscape has been dragged so far to the right that New labour can be described as left-wing only in comparative terms (and even then.....) Perhaps your political compass is broken?
http://politicalcompass.org/index
Posted by: Mark Underwood | Tuesday, 15 July 2008 at 05:27 PM
Politics is the art of the possible what is the point in having a tory government?
Youyr attitude cuased americans to elect president bush over gore on the basis there was no difference between the two.
So is it right wing to support the mini wage, gays rights, equal rights for women and ethnic minorities, tax credits that redistribute wealth.
I have my own political dreams but in democracy you have to have balance. The chopice is centre left v right wing.
I want to get rid of the monarchy. But I realise no leader could do that. :
Posted by: dirty european socialist. | Tuesday, 15 July 2008 at 09:04 PM
Nobody seems to realise that Gorrdie is going to go out in a blaze of glory - and be made King of Scotland. He will have achieved success in his Glorious Plot to avenge past wrongs against Bonnie Scotland. Past wrongs committed by the damned sassenachs, such as nicking their oil. He will have led the auld enemy England over the cliff edge into social and economic ruin. Across the border there'll be a meeting of the Clans and he will be elected unanimously as Monarch of the Glens.
Posted by: john problem | Wednesday, 16 July 2008 at 08:03 AM
Maybe people are nervous because a lot of big things are all happening at once. Economic growth for the last couple of decades has been fuelled by easy credit and rising house prices. Both are coming to and end simultaneously. Oil prices are rising steeply; and it was oil price shocks which signalled the end of the Keynesian consensus in the seventies. Stress levels are very high, working hours are very long, and it is doubtful if the workforce can produce very much more. More and more people are saying they find it hard to make ends meet. People are quite aware of “negative multiplier” effects; i.e a firm closes, the people who were employed there no longer have money to sped, economic activity shrinks as a result, other firms suffer.
Then there are non-economic reasons. People seem to be becoming increasingly disenchanted and disaffected, for a variety of reasons; revelations about sleaze and cronyism, unease about the surveillance society, a general feeling that government is unresponsive to ordinary people, while always being very kind to those already privileged. A feeling of discontent, doom and gloom in one area of life is liable to lead to similar feelings in other areas of life; not completely rational, perhaps, but certainly powerful.
A lot of big things all happening at once indeed.
Posted by: John Davies | Wednesday, 16 July 2008 at 11:50 AM
"he will be elected unanimously as Monarch of the Glens."
Oh Aye and when does the stalking season begin in Scotland?
Posted by: flipped | Wednesday, 16 July 2008 at 12:23 PM
Peopel's main asset, their house, is falling in value with no bottom in sight. Energy inflation is hitting poorer people very hard, as is the non stop above inflation increases in council tax. real inflation as felt by most people is twice government figures, and because its food, poorer people are struggling. But not just poor in the traditional sense, people in skilled work / professional jobs are forced to cutback. Shopping in cheap shops instead of premium ones, not buying the car, running it less etc. Its easy to see why real people are gloomy, because what affects them is hitting them badly. Stats from economists and politicians are out of touch with real people and simply not believed.
Posted by: Neil Murphy | Thursday, 31 July 2008 at 11:58 PM
Perhaps it it also because many people are fundamentally sick of pointless consumerism and waste and understand that this kind of economy cannot endure.
They also actually want to live in a more sensible society and are disgusted with the greed and excess and sheer dishonesty of recent times. They would like to live simpler more meaningful lives. It cannot be a coincidence that the increase in newspaper articles advising on how to lead thriftier more environmentally concious lives pre- dated the credit crunch. More and more people are sensing that we need to change to much more sustainable ways of living and that the old goal of continuous growth is an outmoded aim.
Posted by: sheila | Friday, 01 August 2008 at 08:35 AM