Lost year, or lost decade?

Growth will flatline over the next year, but already things are back where they were in 2002.

I wrote yesterday that it doesn't really matter that the UK is in a technical recession. The zero boundary is unimportant in many aspects of economics, and growth is one – the difference between -0.1 per cent and 0.1 per cent is the same as the difference between 0.1 per cent and 0.3 per cent.

But when economics feeds into politics and the media, the difference does matter. Headlines of "UK not in recession" are far more likely in the event of 0.1 per cent growth than headlines of "UK remains in crippling stagnation"; similarly, the news yesterday was always going to be about the two consectutive quarters of negative growth, not the seven consecutive quarters in which the UK economy has barely changed. Headlines affect how people think, how people think affects how they act, and how they act feeds back into the economy.

All of which is to say that if it didn't matter that we were in a technical recession when the stats were released at 9:30am yesterday, it probably did by the time the front pages were fixed at 9:30pm.

Gerard Lyons, Standard Chartered's chief economist, said:

The likelihood is that the data will further dent confidence and push the recovery back.

The second quarter of 2012 was always going to be a weak one. The OBR, which overestimated Q4 2011 growth by 0.1 per cent and Q1 2012 by 0.5 per cent, predicts a flatlining Q2 2012, with 0.0 per cent growth. If their past pattern continues, we should expect a third quarter of contraction - especially as consumer confidence, hit by the news of recession, will depress that quarter still furter.

Little wonder that Philip Aldrick, the Telegraph's economics editor, is calling this a "lost year", fearing that the overall contraction in 2012 could be 0.1 per cent. But even there, talk of a lost year glosses over the longer term weaknesses. Nominally positive growth below the rate of population growth results in GDP per capita contracting. Even if we find out, after the final GDP figures come out in two months, that we weren't in a national recession, we've been in a per capita recession for a while. And under OBR and ONS predictions for the rate of GDP and population growth, it won't be until 2016 that GDP per capita is back to where it was in 2007. That isn't a lost year; it's a lost decade.

And even talk of a lost decade is understating the problem. Pay rises have been near at or below inflation for so long that the average weekly wage now is worth the same as it was in September of 2002 – and because price inflation remains higher than wage inflation, this is getting worse, not better. In terms of what you can buy for your wage, we've already lost a decade. The trick will be to not lose two.

Buckingham Palace during the Golden Jubiliee, the last time real wages were this low.

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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The economics of outrage: Why you haven't seen the end of Katie Hopkins

Her distasteful tweet may have cost her a job at LBC, but this isn't the last we've seen of Britain's biggest troll. 

Another atrocity, other surge of grief and fear, and there like clockwork was the UK’s biggest troll. Hours after the explosion at the Manchester Arena that killed 22 mostly young and female concert goers, Katie Hopkins weighed in with a very on-brand tweet calling for a “final solution” to the complex issue of terrorism.

She quickly deleted it, replacing the offending phrase with the words “true solution”, but did not tone down the essentially fascist message. Few thought it had been an innocent mistake on the part of someone unaware of the historical connotations of those two words.  And no matter how many urged their fellow web users not to give Hopkins the attention she craved, it still sparked angry tweets, condemnatory news articles and even reports to the police.

Hopkins has lost her presenting job at LBC radio, but she is yet to lose her column at Mail Online, and it’s quite likely she won’t.

Mail Online and its print counterpart The Daily Mail have regularly shown they are prepared to go down the deliberately divisive path Hopkins was signposting. But even if the site's managing editor Martin Clarke was secretly a liberal sandal-wearer, there are also very good economic reasons for Mail Online to stick with her. The extreme and outrageous is great at gaining attention, and attention is what makes money for Mail Online.

It is ironic that Hopkins’s career was initially helped by TV’s attempts to provide balance. Producers could rely on her to provide a counterweight to even the most committed and rational bleeding-heart liberal.

As Patrick Smith, a former media specialist who is currently a senior reporter at BuzzFeed News points out: “It’s very difficult for producers who are legally bound to be balanced, they will sometimes literally have lawyers in the room.”

“That in a way is why some people who are skirting very close or beyond the bounds of taste and decency get on air.”

But while TV may have made Hopkins, it is online where her extreme views perform best.  As digital publishers have learned, the best way to get the shares, clicks and page views that make them money is to provoke an emotional response. And there are few things as good at provoking an emotional response as extreme and outrageous political views.

And in many ways it doesn’t matter whether that response is negative or positive. Those who complain about what Hopkins says are also the ones who draw attention to it – many will read what she writes in order to know exactly why they should hate her.

Of course using outrageous views as a sales tactic is not confined to the web – The Daily Mail prints columns by Sarah Vine for a reason - but the risks of pushing the boundaries of taste and decency are greater in a linear, analogue world. Cancelling a newspaper subscription or changing radio station is a simpler and often longer-lasting act than pledging to never click on a tempting link on Twitter or Facebook. LBC may have had far more to lose from sticking with Hopkins than Mail Online does, and much less to gain. Someone prepared to say what Hopkins says will not be out of work for long. 

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