Recession deniers proved wrong

Our economics editor gives his verdict.

So the recession deniers were wrong again. As I predicted, rather than GDP growth for the first quarter of 2012 being revised up it was actually revised down by the ONS today from -0.2 per cent to -0.3 per cent. Output in the production industries was -0.4 per cent, manufacturing was flat while services grew by+0.1 per cent while construction was -4.8 per cent.  The fall in construction is very serious and, according to a report of the Bank of England's agents this week, "in large part due to declining work for the public sector".

Over the last six quarters that I have called the Osborne Collapse the economy has shrunk by -0.4 per cent.  He inherited an economy for Alastair Darling that grew by 3.1 per cent over the preceding four quarters.  Here's the chart.  Four of the last six were negative:

There is every prospect that the next quarter will be negative also even if the euro area doesn't implode.  If it does things will be much worse.

David Cameron in a speech on the economy on the 17 May 2012 said:

"Despite headwinds from the Eurozone, we are on track...We are moving in the right direction.

This is total balderdash. The economy is tanking and the coalition appears totally lost on what to do about it and they still don't have a growth plan. Saying they have a Plan A doesn't do it. We are now paying the price for them not having or implementing a plan B.

Today is the time to do three things:

  1. Cut VAT to 17.5 per cent.
  2. Cut National Insurance on anyone under 25 to zero for two years.
  3. Announce a program of £50bn of infrastructure spending on shovel ready projects. Local authorities can bid for the money for any project already through the planning process. The Monetary Policy Committee can fund it via Quantitative Easing.

It really is time for the cabinet to start working hard.

Photograph: Getty Images

David Blanchflower is economics editor of the New Statesman and professor of economics at Dartmouth College, New Hampshire

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Boris Johnson's "juddering climax"? Don't let it distract you from his record as mayor

As Johnson finishes his term as mayor of London, his own parting shot leaves this mole feeling cold.

Initially, the feeling down here in the Mole townhouse was that Boris Johnson's "Operation Juddering Climax" tweet wasn't worth giving airtime to.
 

After all: it's an attention-seeking device as old as the hills. Sex sells; unfortunately, so does the soon-to-be-former Mayor's brand of weird bombast. So it's not surprising some press officer realised if you can get the voters to imagine Johnson in gaudens (see, Boris, bit of Latin for you there!), they'll get distracted. At the very least, it'll rechannel their disgust so they're not thinking about the fact he's a man whose past achievements include such gems as calling black people “picanninies” and, recently, suggesting “part-Kenyan” Barack Obama may have an “ancestral dislike” of the British empire.

Like a dead cat, once the possibility of an active penis is on the table people tend to get distracted.

So yes, reading Johnson's account yesterday did feel a little like supervising a class of fourth-formers who have just discovered euphemism and can't stop slipping it into their answers in class, continuing long after it stops being funny, massive shit-eating grins on their faces all the time. The temptation is always to ignore it, in the hope they'll get bored with their own supposed cleverness.

But it's actually more sinister than that. Because when Boris pulls this sort of sniggering schoolboy rhetoric out about the "climax" of his mayoralty, what he's actually doing is urging you to forget the stray pube of his water cannon, the crumpled tissue of his awful, boiling busses and the crusty sock which is his environmental legacy.

Well, here at the NS we believe a gentleman should always offer to sleep in the wet patch. So here, as a parting gift of sorts, is a short selection of some things you might remember Boris for:

The bus stock whose internal temperature “breaches legal limits for livestock”

Championed the contentious Garden Bridge

Installed a cable car that is used by fewer passengers than London’s, er, 400 busiest bus routes

Abused his planning power in the mayoral office in what the Guardian called “an assault on democracy”

Spend over £200,000 on two second hand water cannon from Germany – which he’s not allowed to use

That's that done. This mole's off for a cigarette.

I'm a mole, innit.