Monday, 28 July 2008
Don't talk down the economy, stupid
You'd think that by looking at the media that we're going to hell in a handcart with the economy.
Which makes this piece by noted economics editor Liam Halligan in the Sunday Telegraph - one of the in-house papers of the Conservative Party - very revealing.
"The highly respected DCLG house measure - which surveys mortgage completions from 50 lenders each month - showed an average price of £207,577 at the beginning of 2007, rising to £219,054 at the end of last year.
"The latest DCLG number is £218,521 - lower, but not disastrously so."
That's a staggering drop of the average house price in the seven months of the credit crunch of £533!
By reading some papers and listening to the likes of Osborne, you'd be forgiven for thinking it must be at least ten times as much as that.
The perception is - and even I believed it - the economy is spiraling into recession and there's little we can do.
Liam's argument is that the prospect of a recession is not guaranteed at all. Which makes all the talk of it by the Tories, the right-wing media and the City all the more reckless.
There's no doubt times are tight and we're all feeling the pinch. But the recession is not a foregone conclusion.
But if people continue to talk down the economy it'll become a self-fulfilling prophecy.