Is the long run 15 minutes?

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I noted joyous reporting of the following type yesterday (while I was grinding back from France):

UK manufacturing surged to a 16-year high last month according to fresh data that indicates the sector is staging a healthy recovery from the recession.

Across a wide range of measures from employment to overseas trade, manufacturers registered strong growth, boosting hopes of a revival in the private sector.

The figures will cheer the Treasury, which has come under attack from critics who argue the government is poised to implement draconian public sector spending cuts before a sustained economic recovery is firmly in place.

A sharp rise in employment levels across the sector will be especially welcomed by ministers who need the private sector to accelerate job creation ahead of the expected 400,000 job losses in the public sector.

The Markit/CIPS manufacturing Purchasing Managers' Index (PMI) rose to 58 in November after firms benefited from a weaker pound, low interest rates and the injection of funds from the Bank of England under its quantitiative easing programme.

So, quantitative easing is finally working.

But let’s have no nonsense that recovery is on the way. None of the following have happened:

  • A VAT rise to 20%
  • Wage freezes
  • More than a million job losses
  • Benefit freezes
  • Pension reductions
  • Forced relocation of tens of thousands of people
  • Cuts in government investment
  • The export impact of the euro crisis

All that’s happened is a few short term thinkers have said they’re a bit more optimistic.

That’s fine.

But the long run is longer than 15 minutes.

And in the long run things still look horrible.

I’m not celebrating. It’s the stupidity of believing short term indicators that got us where we are now.

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