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The incredible shrinking stat

January 25, 2011

There’s been a load of guff in the UK media today about how the economy has shrunk.  I was especially interested in ITN’s evening news.  Talk of ‘double dips’ and W-shaped or L-shaped recessions has been rife.  It sounded at times like encoded porn rather than economics.  I don’t know which recession would be the W-shaped one, but I bet it could be interesting finding out.

Two things struck me about ITN’s coverage in particular.  It was made quite clear that this situation is all the fault of the government and its cuts.  If we are to believe ITN News George Osborne, the Chancellor, has been going around personally to each and every business in the land in order to throw spanners in their works or sand in their gears.

Secondly, every single clip, report and link carried a not-so-subtle undertone of impending doom.  Soon, it seemed to imply, we will all be living in shop doorways and eating out of bins.  We will have to sell our children for food and our pets for firewood.

The government is not to blame for the shrinking of the economy.  Nor was it responsible for the growth that has been happening since they were elected.  The economy shrinks or grows according to what real people and businesses do in the real world.  Barring far more outrageous action than that taken by the current mob, the government simply skims money off the top to spend on some stuff we need and some stuff they want.  Have David Cameron, Nick Clegg or Ed Milliband ever made anything or provided a useful service to others?  No.  So economically speaking they have no effect beyond that of occasionally consuming products provided by other people.

What does have an effect is the doom-mongering by media outlets such as ITN News.  When people see on the telly that everyone is losing their jobs and businesses are closing, they sit on their money because they are uncertain; and stopping the money moving in an economy is like kicking a bloke in the nuts.  It hurts a lot and causes temporary paralysis and collapse, before gradually fading to a lingering sense of caution and regret.

This is the problem, to my mind.  It doesn’t matter to the economy which pack of clowns are in Westminster and Parliament.  It does matter what the media say because, rightly or wrongly, most people in this country get all their information from the TV news.  This means that the media, however much they will deny it, have a responsibility to report facts and keep their sensationalist streak under control.  But try telling them that and see what happens.

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