When it comes to the state of Mammon at the moment, there is I think a parallel of great importance, and it’s this: people confuse the economy with the deficit in the same way that the warming-or-not debaters confuse weather with climate.
Talking about ‘the economy’ and how it may or may not be pulling out of a recession is a bit like going to the Copenhagen conference and saying “It was 34 degrees on my patio yesterday”. The only reason that piece of information might be relevant would be if yesterday had been 27th December in northern Europe. The same is true of economic ‘recovery’.
Wall St went marginally potty today because the US economy grew by 3.2% in Q1 2010. Some of you may have spotted that it’s been very quiet over at Lord Mandelson’s Ministry of Alchemy this afternoon; not even he can compare a 0.3% UK growth rate with 3.2%. Although Mandy can describe a dead sheep sitting in a DIY hole as “barnstorming to victory in the debate”, he’s too cute to suggest that maths can be denied. But as it happens, Wall St is silly to get excited about just one quarter anyway.
Business generally has had the quarterly return instant-gratification disease for nearly three decades now. The difference in the 2010 context is that responses to such short term data are even dafter, because getting a rise of 3.2% a year is not going to do a lot for the employee who earns £30,000 a year – but owes his creditors £680,000. This is a roughly accurate analogy. More concerning for we Brits is that getting a 0.3% rise when you earn £18,000 isn’t going to do anything to pay off creditors owed £1.3 million. This too, sadly, is an accurate comparison.
This morning on the Daily Politics show, I heard Ben Bradshawe – the man who thinks a balance sheet is ecologically sound bed-linen – whingeing on again about how taking all £6 billion out of an economy worth £1.3 trillion will spell the end of Blighty as we know it. His mentor Mandelson in turn demands we accept that this removal of just 0.4% of largely uneconomic activity will be enough to squash the fragile recovery. This is fragility of a different order to anything I’ve ever experienced.
So here for your delectation is a fact to put some if this nonsense into context: the UK economy could be growing at 6% per annum, and we would still be in a well of deep doo-doo. The economy is only important in the sense that its medium term GDP needs to be of a large enough size to facilitate paying off a debt of terrifying proportions - and an O-level Economics student could tell you that, structurally, the UK economy does not make or grow anywhere near enough of what would be necessary to pay off half the debt by 2014. Or rather, not without swingeing rises in taxation and cuts in welfare services.
I read earlier that Consumer confidence in the UK fell for the second straight month in April – down one point from March to a score of -16, according to a poll conducted by the European Commission. This is encouraging evidence that at least a proportion of the electorate isn’t entirely deluded. But I also read that the main Parties had the gall to defend their plans for spending cuts – despite another think tank (the NIESR) warning that far more will need to be done.
Of course, Mr Brown continues on his merry way of refusing to use the D-word, preferring instead to indulge in E numbers. But Andrew Neill rightly pointed out this morning that the voters aren’t stupid. And even Will Hutton admitted that the cuts were “nowhere near enough….and they’re capital cuts, which are never a good idea”. Will is obviously feeling a lot better following his spell in The Priory.
Politicians are evading what they will do with OUR votes, and evading the issue of how THEIR dilatory control of the finances means a coming decade of austerity. This isn’t democracy, it’s fraud. We should all make our point – insofar as the electoral system allows us to do this.
So this evening – having at last received my postal vote – I have written on the ballot paper ‘None of the following’. And next to the Labour candidate, I added ‘Especially not this one’. It will be treated as a spoilt ballot paper. But this is merely the insufficiency of an arrogant electoral system: it didn’t spoil my experience of doing it one bit.