As well as writing about Britain I am also writing about the outlook for the world over the next couple of years. I have been reading reams of articles and ploughing through drifts of data to try and understand what is going on. I have just heard someone on the radio say that J K Galbraith (economist who wrote about the depression of the 1930s) describing economic forecasting as something that astrology look respectable. For me, this is cheering news as I was wondering about adding predictions about being in the year of Ox to the otherwise gloomy list. (Year of the Ox means determined hard work, small gains and steady progress - compared to most forecasts this is positively optimistic).
Anyway, having looked at the economic statistics I wondered why the news is so negative when the overall falls in the economy as relatively small. Even the latest IMF figures are expecting only a few percentage point falls. Why if 96% of the spending continues does the missing 4% make such a difference.
Luckily for me I went to a party and managed to talk to a well-respected economist about this (which has saved me days of trying to read economic text books). He explained that in Europe if we have less than 2% growth then jobs will be lost. Apparently ongoing efficiency measures mean that there tends to be 2% increase in efficiency each year and that usually means fewer jobs. So if growth is less than 2% then lots of people tend to lose their job. And that is where we are at the moment.
I am still going to concentrate on the 90+% of the economy that is still there. For those who have lost their or don't have a regular income (self-employed etc) then there is good reason to stop spending. But for those with a job and a regular income, please go and do some shopping. Your country needs you to shop.
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Perhaps the hope is in growth of a different kind, not the continued growth of a dysfunctional economics. I met a young man last night at a dinner party who is working on wind energy, in New Mexico. He says the technology is here, a new kind of grid is ready, we just need the go ahead from politicians and corporate entities. He sees jobs and energy and abundance. Now this is America and he does conclude that we will be owned by the Chinese, but he's out to get his piece of the pie. Perhaps nationalism is fading. And that might be a good thing. We are all human after all, and this is one planet.
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