An odd combination of smugness and fatalism
Yesterday I expressed some anger with how the media appeared (in general) to be reacting to weak growth as if it were somehow good news.
I fully expect another bout of this today following a stronger than expected Services PMI, despite the fact that the release itself notes that:
However, this is no run-away recovery. Although on the rise, job creation and inflows of new business continue to run well below rates generally seen in the years prior to the financial crisis.
My colleague Matt has just reminded me of a quote from Paul Krugman’s ‘The Return of Depression Economics’ which really sums up where we now are in the UK economic debate:
The slowness with which Japan’s economy deteriorated was in itself a source of much confusion. Because the depression crept up on the country, there was never a moment at which the public clamoured for the government to do something dramatic. Because Japan’s economic engine gradually lost power rather than coming to a screeching halt, the government itself consistently defined success down, regarding the economy’s continuing growth as a vindication of its policies even though that growth was well short of what could and should have been achieved. And at the same time, both Japanese and foreign analysts tended to assume that because the economy grew so slowly for so long, it couldn’t grow any faster.
So Japan’s economic policies were marked by an odd combination of smugness and fatalism – and by a noticeable unwillingness to think hard about how things could have gone so wrong. (My emphasis)
I wish I’d put it so well.