‘Recession’ doesn’t begin to cover it
The word downplays the magnitude of our current crisis
Minus 20.4%. That’s the latest quarterly GDP ‘growth’ figure for the second quarter of this year. There was a (much smaller) decline in the first quarter too — so with two quarters of negative growth in a row, this meets the conventional definition of a recession.
Indeed, that’s how the mainstream media headlined the news. For instance, the BBC went with “UK officially in recession for first time in 11 years”.
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Every word of that sentence is true, but it’s also irrelevant — in fact, utterly inappropriate. To compare this recession with the last one or any other on record, doesn’t make sense. Just take a look at the chart used to illustrate the BBC report:
Squinting really hard, I think I might see a subtle contrast between the contraction this time and last time… oh yes, it’s a whole order of magnitude worse!
There is nothing remotely similar to this in the economic record, so why on Earth are we using conventional terminology like ‘recession’? It’s like calling an earthquake a ‘vibration’ — technically correct but thoroughly misleading.
Normalising what’s happened to us in 2020 legitimises a conventional narrative when what we desperately need from our politicians is unconventional thinking. It’s therefore deeply dispiriting to read the Shadow Chancellor saying things like this: “A downturn was inevitable after lockdown — but Johnson’s jobs crisis wasn’t.”
Johnson’s jobs crisis. I really hope Anneliese Dodds has more to contribute than petty soundbites. Given the lockdown measures that she and her Labour colleagues were in full agreement with, can she present any vaguely plausible scenario in which a jobs crisis would not have resulted? Suspend normal life and really bad stuff is bound to happen — even if it was our least worst option.
Whether one believes the lockdown to have been necessary or not, one thing we ought to agree on is that we’re in a situation without precedent. If we can’t even find the language to reflect this undeniable fact then what chance do we have of finding a solution to our predicament?
By the way, the need for new language also applies to the Government. The latest monthly GDP figures show that the economy grew by 8.9% in June. Ministers could choose to call this ‘recovery’ or even ‘record growth’.
Again, this would be technically correct — and again it would be meaningless. The rebound, while better than continued collapse, means that we’re only a bit of the way back to normality.
So I hope that our leaders, unlike the Opposition or the media, rise to the occasion. Extraordinary times require extraordinary words. Let us pray that extraordinary deeds might follow them.
Excellent piece, Peter.
As I have said from the start, this is not a minor economic difficulty in response to an unprecedented viral disaster, it is a minor viral difficulty that has led to an unprecedented economic disaster.
Very well put. And in the first week of July, five times more people died of ‘summer flu’ than of C19. Whatever, I concluded some years ago that always and everywhere we are ruled by complete morons, and there is simply nothing you can do about it.
Same here in the States my friend. Over here the NNC I call all 5 propaganda news outlets part of that, NETWORK NEWS CABAL. Are constantly “Wuhan Chinese Virus” fear mongering.
Even on my WSJ this morning, there’s a certain extreme far left writer that put up another fear porn article on our numbers climbing. Because so many more got tested in the last 48 hours. Oh really???
Opposition morons too, don’t forget.
Don’t forget our scientists said we needed to lock down and they then said we are at or near the limit of what we can unlock before it starts to spread again
And if we continue to lockdown areas every half dozen cases or more the economy will never recover.
Correct you are.
What I find amazing is that those supposedly on the left are suddenly the cheerleaders for more poverty. You couldn’t make this up.
Well those on the left are probably working for the public sector, so still getting paid. They care nothing for the people in the private sector who are being plunged into poverty. Indeed, they celebrate it.
I’m on the left (or what I used to think was the left), I’ve got a job where I can work from home, pretty cushty. That doesn’t mean I want to to destroy the worlds economy for political ends; the collateral damage, particularly on the worlds poor, doesn’t bear thinking about. These people, who are defined with the blanket terms liberal-left, in my view, have nothing to do with the left at all, they are the establishment really and they’re acting more like fascists (and I’m being serious). They are doing it because they are so blinded by anti-populist dogma, they just don’t see anything else, and that includes reason
I totally agree with you. My politics are like yours (left) and yet these “representatives of the left” are nothing of the sort. Absolutley all opinion is that Boris has not done enough lockdown NOT ONE FRICKING WORD stating it was totally wrong. I see no difference between left-middle-right from those who wish to keep us masked. It’s all about control and arrogance, “they” know what is good for us even if we don’t so “their” opinion is the only one that counts se we must be MUZZLED.
I just wish the awakened ones (that’s us) across the political spectrum stopped trying to label this as a left-right issue it’s not, it’s about freedom to choose and freedom to express your opinion without censorship.
Difficult balance. Extraordinary words might act as a trigger to reactivate the covid panic that was arguably Labour’s and the Liberal Establishment’s sole policy during our crisis.
Labour’s and the Liberal Establishment’s choice of a hard lockdown and it’s narratives and soundbites of worst case scenarios, panic and fear (Project Fear #3) was always going to lead to Johnson’s job crisis. In other words, this was a calculated move to create economic ruin and then present themselves as the country’s saviour. Such is the desperation of a grief stricken cabal of EU remainers.
I fear you’re correct. The same occurred here in the US where the Democrats were calling out for stringent lockdown measures, and then blaming Trump for the economic downturn as well as causing the ‘plague’ in the first place.
I voted remain but I came to that conclusion a few months ago, when this ‘crisis’ very quickly turned into a political opportunity. Unfortunately their politicking will have disastrous consequences for ordinary people of all political persuasion.
That is why I am clear, this has not been done in my name, and I do not support the putsch
Gosh! The economy is closed down for four months for no good reason and it then collapses. Who would have thought it?
Yes, but the sun in shining, the world is still turning, money is being printed from here unto Paper Money Collapse, the property market is being supported through all manner of trickery…
And perhaps, just perhaps, the authorities will finally admit that which most of realised a long time ago. Namely, that the scamdemic is no threat to the vast majority of us, and that we can and should all get back to work, In which case, the economy might rebound very quickly.
If you want to see and hear someone sum all of this up in a direct, straight to the point, with just the right amount of humor thrown in, hop over on YouTube and in the search bar type in, Katie Hopkins 🙂
Her page Will come up. Then watch her video titled, ” Lockdowns bankrupt Britain.” Katie tells it like it is. There’s not a Conservative here in the States that don’t love â¤ï¸ Miss Katie.
you can have her if you like?
There’s not a person with a brain here in the UK that don’t think “Miss Katie” is a complete arse.
You locked down an entire country, and it’s people, throw millions of hard working folks off there job, take away cash flow, bankrupt businesses, what did they expect would happen.
Same thing here in the states. we had our absolute best economy not only in the last 50 years but many top economist are saying the best economy we’ve had in 100 years. But keep this in mind.
The model that was given to this administration back on March 2nd from the
” University of Washington IHME Dept, would have scared the Obama administration, the Bush, the Clinton admin, any administration to scared stiff.
From what I understand and from what I read online and correct me if I’m wrong but I believe the United Kingdom was given a similar model from the same universities department.
Our daft modelling was done by our very own Imperial College, London. I wasn’t aware of any US university’s UK model. Anyhow, the Imperial College one scared the bejesus out of our dear leaders so we tumbled into lockdown for similar reasons to you.
Ferguson should be personally responsible for every pound lost by the rest of us.
Agreed, he should be linched, but instead he’s doing the rounds on BBC radio, just when he’s needed to instil a bit more fear into people
An ideal case for premature extinction I would say.
My understanding is that it was Ferguson’s Imperial College model for the US that also scared US officials, but there were so many epidemiological models floating around with high projections that I can certainly believe it wasn’t just that one.
It’s astounding that Ferguson got so much fawning press in mid-March without any reporters apparently bothering to look at his track record of forecasts.
Yes the failure the “great” British press to unearth the scoundrel was absolutely deplorable.
Well done Mr Franklin, you have neatly encapsulated what is likely to be the greatest financial catastrophe since the South Sea Bubble.
The’ shriekers’ and Quangocrats have triumphed. Herr Joseph Goebbels would be proud.
Still it could be worse, look at Melbourne for example. An unparalleled state of funk, not seen by an Australian, since the cowardly Major General Gordon Bennett fled Singapore in 1942.
Or the even more pathetic and cowardly General Percival who simply rolled over time after time all down the Malayan peninsular and then onto Singapore itself, gave up, doomed over 100,000 Allied POWs to 3 years of agony and death, effectively told the locals that the Brits were a bunch of useless f-wits and you’d be better off going it alone (I live in Malaysia now and asked) and had the gall to write his memoirs post war. SOB does not even begin to classify him.
I don’t think Percival was cowardly, just incompetent, whereas Bennett deserted his post ‘in the face of enemy’ and should by rights have been tried by court martial and (hopefully) shot.
Sadly that was too much for the Australian authorities, and probably even for Winston Churchill KG.
I’ve just read about a ‘huge outbreak’ of CV19 in a sandwich making facility. It was 300 cases. The next article I read described how 50,000 jobs may be lost in the West End of London – no hyperbole.
I think it’s about time Governments were honest and gave people a simple choice: would you rather get CV19 (median age of death is 78) or lose your job (bearing in mind there may be over 1000 people applying for the next one you apply for)?
The problem with that is that many people would probably prefer to lose their jobs, I’m afraid.
And yet another problem with that so called choice is that it’s fake. Getting COVID in most cases, say 80%, is defined by a positive PCR-test. By now it is cristal claer that a PCR-test has no clinical value. A positive test doesn’t even predict if you will have any symptoms at all or even be infectious for other people. It only states that you have some small RNA-particle that also can be found in the corona-virus, among many other viruses. It really is total clinical madness to present a positive test as an infection because an infection is a reaction of the body to the virus. MOst positive people do not have symptoms and are clinically not infected and therefore not dangerous.
I agree this is a state-mandated ‘downturn’ of unprecented scale (why don’t we use the term ‘depression’?) and will be an ongoing economic calamity. And an awful precedent has been set with continual ‘local’ (entire cities) lockdowns and erratic and unpredictable quarantine policies as a result of small increases (maybe just as a result of more testing) in tiny numbers of cases. As a very minor example of this, I was chatting with a French friend about mutual visits the night before the announcement of the quarantine on travellers from France!
While I sympathise with the sentiments of covid-19 turning out to be an overblown disease, I think we can agree that the scenes in Northern Italy were not faked. Elected governments of course are going to take greater note of visible concentrated pain (whether medical or economic) in a short time period than diffuse or long term effects, which are always more uncertain anyway. A plane or train crash – big news – road fatalities mostly unnoticed, among many other examples. And so many governments have followed the same playbook. It has been argued that states followed the precedent of China and we’ve probably seen the biggest erosion of economic and social liberty ever. Sweden, though not a notably libertarian society, has been an admirable and rare exception, although even here mainly voluntary social distancing has had a large adverse economic effect.
But these draconian policies seem generally to have been quite popular, that is what we chatterati have to deal with. So much for freedom-loving Englishmen! It’s been one long holiday of course for many with some very good weather. But that is coming to an end soon…
When the images of Italy came out there was a general panic that the health service wouldn’t cope. The lockdown was initially ‘to buy time for the NHS to prepare for the forthcoming wave of infections’. This was the expressed intention of the lockdown. Somehow, as time went on, the intention changed – although this time it was never expressed – to one of locking down until the pathogen disappears (or at least, no-one contracts CV19).
Unfortunately the latter intention, as Professor Henegan et al have explained is impossible. Look at New Zealand. Hailed as a major success story at having rid itself of CV19 with a tiny loss of life. And now it is locking down it’s biggest city because of a handful of positive tests. This pattern could continue ad infinitum.
Or until The Great Rebellion breaks out. I live in hope if not expectation.
Hilariously, Dodds apparently wants us to have had even more lockdown than Boris gave us. What an idiot!
He should be hanged!
(She: Anneliese Dodds, Labour Shadow Chancellor.)
Thank you! That makes it a little difficult if you recall the fuss over Ruth Ellis?
Yes, though I try not to endorse calling for the execution of political opponents anyway, even in jest. Such horrors are never as far away as people realise.
And I wouldn’t want some future Woke Protectorate to cite such words of mine to justify executions they were carrying out, as if to say “We’re only doing to them what they wanted to do to us”.
I’m not saying this as any kind of reproach”you act as you wish! Just explaining why I am not going to go along with the joke myself.
A perfectly valid opinion.
I, on the other hand, as a fully paid up “coffin dodger”, don’t really care anymore, as I am sure you will perfectly understand.
Well Labour have galvanised themselves to have a view on how covid has been managed by the current Government (sic) – and decided that the lockdown was imposed too late. This narrative turning up regularly in the mainstream media unsurprisingly of late. It seems an ex- Labour voter I’ll remain – more logic chopping of the most brazen nature. When the economic maelstrom starts to really hit this lot will be dizzy spinning new absurd narratives.
Points all noted but one thing that is scarce discussed is the fact that Britain now has an amazing opportunity as Brexit is trundling along in the background at the same time. All BJ has to do is grow some cojones, make use of his massive majority and make some really tough decisions and the V recovery will at least begin.
Background: I thought Brexit an insanity pure and simple and still think it doesn’t do my children many favours… but it is what it is so Plan B. Move on. First, as good a free trade deal with no strings as can be negotiated. Second rewrite the play book entirely… Rishi is a Goldman guy and those guys don’t let any opportunity go to waste. He hopefully will be planning. My suggestion: all those dead places in the north needing jobs. Turn them into massive free trade zones and F the EU. Ireland has done it for years with their 12% corporation tax allowing Apple to pay a 0.04% tax rate. Why not us?
CV’s impact on the economy will be nothing short of disastrous as described here so why not scrub the board clean and start again? This is what all new CEOs do when they take over a company. Write off as much as they can and blame the old guys (in this case CV and the EU), then start again. Applies to countries too. Over to you BJ, no preferably Rishi, get going mate!
The BBC chart looked a little awry. One often measures a recession from peak to trough. As Peter said, the peak-to-trough decline in real GDP was 22.1%, which is much worse than the 2008-09 recession, when the peak-to-trough decline from 2008Q1 to 2009Q2 was 6.1%. So it has been a much steeper recession, but also (knock on wood) a much shorter one, two quarters as opposed to five quarters, and it may only have been a two-month recession: March and April, although February may be revised downward to make it a three-month recession.
I can’t see when Peter would object to calling the 8.9% growth in June recovery. He admits that technically it is recovery, but that’s the end of it isn’t it? It’s a technical word. If you have growth later when the UK economy has once again equaled or surpassed its January 2020 or February 2020 peak, that’s no longer recovery; that’s expansion. They are simple descriptive terms of the business cycle. If Peter doesn’t think them appropriate, then what he replace them with? I do agree that no-one should quaff a pint to celebrate a record monthly growth rate in May that only achieves its status based on the record monthly decline in April.
I noticed that Senator Harris, in her first speech as Joe Biden’s running mate, was criticizing Trump for a pathetic growth performance compared to other developed countries. This has got to be the worst possible issue for the Dems to campaign on: right now the US peak-to-trough growth rate is -10.6%. Canada’s is -13.1%. All these estimates will of course be revised, but the rankings are unlikely to change.
This has got to be the worst possible issue for the Dems to campaign on: right now the US peak-to-trough growth rate is -10.6%. Canada’s is -13.1%.
That assumes that the liberal wing of the media will allow ordinary citizens to know those facts. If you think that they will feel duty-bound to share news that helps Trump, then I have a bridge to sell you.
“Normalising what’s happened to us in 2020 legitimises a conventional narrative when what we desperately need from our politicians is unconventional thinking”.
Very true, but politics these days is all about media management utilising a cash-strapped compliant MSM that is happy to regurgitate press releases. Even the history is managed. For example, how often do you hear politicians say “no one could have forecast The Crash of 2008″. Errr yes, we were queuing around Northern Rock branches in 2007 in a vain attempt to get our money out. It was known then that the banking system was bust and why so. It suited politicians to play it down.
The danger comes when Government’s start believing their own press releases. It remains to be seen whether that is happening now. Certainly there is far worse to come. At the moment, insolvencies in the hospitality sector are at a 10 year low which may seem surprising given that everyone knows this sector is not thriving. It is being propped up like so many other areas of the economy. Most businesses are limping along with Government support. Those in the retail and hospitality sectors will try to make it until Christmas. It is in the bleak trading months of January and February that we’ll know the true situation. This recession was inevitable, the big fear into the future is a depression.
Oh Giles! It doesn’t work. I’d love for yours, and William Morris’s, vision to be feasible. But really, farmers and country squires? It can’t work.
Morris was not the first as I’m sure you know. The three most well known of his predecessors are Augustus Welsby Northmore Pugin, Thomas Carlyle and (as you mention) John Ruskin. Pugin was a great architect and designer, and he pioneered the idea that the middle ages were more wholesome than anything that followed. But his premise was faulty: he looked at Medieval architecture and said “the people who made this must have lived happier and better lives”. The architecture is beautiful but it doesn’t follow that the social relations at the time of its making were any less cruel, deceiving or unjust than they were later.
Carlyle espoused medieval social relations in a much more systematic (and bombastic) way, and was hugely influential in his attack on industrialization (he coined the term). But the morass of confusion in his thinking led him down a very dark rabbit-hole where he adopted a range of horrific beliefs, from hateful racialised anti-Irishness to even (for God’s sake!) calling for the reinstatement of slavery in the West Indies. Morris was a much gentler soul, more like Pugin (but without turning to Roman Catholicism) and his belief that to work with one’s hands is more fulfilling than to accumulate money is one that many people will wish to endorse.
In so many ways the ideas of these guys ” even Carlyle before he went crazy ” are fine and humane. But I’ve looked at the earth in photographs from space. I’ve looked down at our country at night and seen how much of it is urbanized and ablaze with light. I have also seen how our farming is increasingly done by drones, sat-nav and driverless vehicles, and I find it impossible to imagine a return to old-world village values. We now face post-industrialisation and we do so in an urbanized world-wide-web world, a world of robots and 3-D printing and the dawn of artificial intelligence. Its challenges will not be about re-learning to do carpentry and pottery, but to adjust to a life in which people have no need to make anything at all. Perhaps we will all go mad.
I read Unherd for better than this. In one breath you trumpet the “record recession” in March and in the next dismiss the “record growth” in June. Both figures are useless, mere technical measurements of an unprecedented situation but you choose to wail about the downturn while dismissing the rebound.
The months July-December and beyond will be the real measure of disaster or recovery and until then this is no better than Daily Mirror click bait.
I recommend this Aug 10th analysis of the current state of the pandemic and economic crisis, and their outlook: https://www.thinkspot.com/d… The author explains the difference between ‘economic crisis’ and ‘financial crisis’. We’re already in the former, heading for the latter.
It surely will go down as the greatest self inflicted wound of all time – Our MSM’s concentration on maintaining maximum fear in spite of dwindling death rates is keeping the cost benefit analysis at bay but the perfect hindsight of history will damn our lockdown politico’s forever – But it has exposed China’s stealth takeover of the World that was going so incredibly well and now lies in greater ruins every day – Meanwhile the unbelievable overreaction and c**k up around what seems less bad than flu would be so much less irritating if it really was a conspiracy?
An enjoyable apraisal of a global breakdown of trade and commercial business. Unfortunately I believe the experiences of global liberal economics have failed the last few generations, we the people have in many ways walked blindly in to a mess that will take lifetimes to recover, if ever.
We have experienced the event, Covid 19, which has haulted global economic out put. Regardless of whether we think it’s no worse than seasonal flu or not ( take a look at the WHO figures)
The pandemic wave is still rising in the developing countries of the world.
I personally experienced events in Central America before get home to the UK.
Information and real reporting does get suppressed.
The brakes on the hundred carriage freight train ( World Economy) was brought to a stop.Now we have a mountain to climb. Time and financial effort required to start the worlds economy’s moving AGAIN on a scale never seen or witnessed before.
We are all blinded by the facts which we don’t want to see or hear. WE all have to much debt, whether as individuals, businesses, or as Countries. We can’t keep printing money to make the problems go away. In 4 months the Federal Reserve release trillions of dollars of quantitative easing into the American economy more than it released in the 10 years since the Banking crash /bail out of 2008/09 mind blowing!
Make no mistake we haven’t seen anything yet beyond the technical connotations of the definition of recession we are yet to go through the Cycles of the ripple effect with a catalyst being COVID-19
There are so many ways to compare socialism to the alternatives. One I like…socialism tries to ensure that everyone has what they need, whereas capitalism tries to enable everyone to have what they want.
It’s a shame that no one has commented upon this fine piece of writing. I live nearby, 5 mikes inland between Sandwich, another place with a remarkable history, and Canterbury (ditto).
Having lived here for 25years, moving from London’s suburbs to take a job at the now-shuttered Pfizer R&D site just outside Sandwich, I find this area to be beautiful as well as depressing in equal measure.
Thank you. I learned a lot.
I think they’ve been staving recession off for a while with dodgy “help to buy” schemes and desperate money printing aka “quantitave easing”. This is the final nail in the fake economy where people have to consume excessively and companies expect 20% return on investment just to keep the big wheel of debt turning. Its just not sustainable – we’ve all been reduced to banking slaves desperately working to pay for houses, cars and the final insult, our children’s education while billionaires get richer. The virus is just a cover for the failure of a disastrously designed economic system based on banking and debt that is deeply flawed. Massive bubbles form around housing and assets and then money is “destroyed” since the assets purchased with it become worthless. Pensions are at best a government ponzi scheme which are never going to pay out since the youth do not earn the incomes of previous generation as automation and technology makes them poorer. A major reset is needed – some honesty in our financial system would be a welcome respite from the crooks currently running the show.
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