Tuesday, June 24, 2008

Irish Economy in Recession - It's official

I have a low opinion of economists in general (with a few notable exceptions), especially when it comes to forecasting. They seem blinkered by their world of numbers and seem only able to roll forward the current situation and add a bit of sugar (after all if they predict bad news it will happen) and hope for the best. The housing boom wasn't going to end, until it did. Then we were going to have a soft landing, despite the experience of every other country, and today they announce we are not. 
But never fear, our predictions for 2009 are a smart recovery. On what basis might I ask? Oil has peaked/plateaued and the outlook is for a period of unstable but overall rising prices. Food prices are on the increase worldwide for reasons mainly liked to climate change and the increase in energy price. The price of many commodities such as copper and steel are on the rise, and at home the housing boom has ended and it is hard to see what is going to pick up the slack. Which leaves me wondering why do we keep listening to economists when they've got it so wrong lately and look set to get it wrong again?

I know we are not supposed to talk about the economy in a negative way because we will talk ourselves into a depression, but is that not child-like behaviour? Wouldn't it be more grown up to say, "Yes we have a problem, we understand what it is, and this is what we are going to do about it. There may be some pain for a while but this will give us a sustainable economy in the longer term." It's called leadership and it's sadly lacking in my view.

Yes the problems are very big - out 20th century economy was based on cheap oil - but there also many opportunities and much we can do, if we want to.

Economists are not without a sense of humour however, I saw this title of an ESRI report which made me smile: "A Stern Reply to the Reply to the Review of the Stern Review"

1 comment:

Library Mary said...

HI....I realize that I don't have anything interesting to say regarding Economics or the Recession, but I am from the US and my daughter is going to be visiting Cork in July and I am looking for information about some of the shops.
So...that's SORT of like economics!! I saw your blog on the internet and thought maybe since you were from Cork, you might be willing to assist me.
If so, could you email me personally at marykemock@yahoo.com?
THANK YOU so much.