Paul Krugman writes: Simon Wren-Lewis asks how good British economic recovery — which is being touted as a wonderful success story — really has been. Not very, he says. Indeed. Here’s a comparison of the UK with two other major economies since 2007:
Austerity triumphant. Or, maybe not.
Part of this is the growth rate fallacy — no matter how badly an economy has done over an extended period, you proclaim success after a year or two of good growth. As Wren-Lewis likes to say, on this basis the ideal policy is to shut half the economy down for a while, then start it up again — that way you get 100 percent growth. Also, hitting yourself in the head with a baseball bat is a great idea, because it feels good when you stop.
But surely we’re also seeing the ideological bias of many in the news media. France is supposed to be a terrible failure, because it still believes in a strong welfare state — and so it is reported as a failure, never mind the numbers. Austerity in Britain is politically approved, so it is pronounced a success on the shakiest of grounds.
It’s all pretty depressing.
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