The Osborne Effect – recession edition

25th April, 2012 10:47 am

So we’re back in recession. It’s now roughly six quarters since the much heralded “spending review”. Let’s take a look at UK growth in the last six quarters:

That’s what some might euphemistically call “negative growth”. That’s the Osborne Effect.

6 quarters. 18 months. A failing economy.

In total Osborne has been in charge of economy for 7 quarters. The economy has shrunk in 4 of them.

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  • trotters57

    Company profits are holding up generally, company directors are still getting bonuses, the bankers are getting bonuses, company dividends were up 18% in the last year.
    For everyone else real wages are falling in both the public and private sector, unemployment and underemployment are measured in millions.

    And yet very few people are talking about a systemic crisis.

    • Steven Macari

      Yes the bosses are getting bonuses and big pay rises and the average man/women pay has flatlined or shrunk.  This gives the proof that trickle down economics doesn’t work.  These people at the top are hoarding and not spending. They are not benefitting the country as a whole, they are just benefitting their own coterie. 

      • Dan McCurry

        Totally agree. We don’t have to be in recession. If companies started spending we would prosper, but they don’t have confidence. The lack of confidence is due to government policy, not just here, but in Eurozone also. 

  • MonkeyBot5000

    Why have you started with these daft pictures again? For a while you looked like you where going to stick to presenting genuine informative data, but now you’ve gone back to this sub-GCSE rubbish.

    We need to see the six quarters before and after the spending review (12 columns in all) and that shows us how growth has increased/reduced. You also need to label your axes – is growth down by ~0.3% or ~£0.3?

    Why do you persist in producing this inumerate nonsense when your point would be far better ilustrated if you just made a proper graph? The underlying data supports your view, but when your presentation of that data hides the important points rather than illuminate them, you make your argument easier to defeat.

    • trotters1957


      you make your argument easier to defeat.”
      So why didn’t you defeat the argument instead of shooting the messenger?

      • MonkeyBot5000

        Because I’d rather see the argument strengthened than defeated.

        As for shooting the messenger, if they can’t deliver the message properly, what use are they?

    • It’s tongue in cheek, obviously not a serious economic article. I like it. 

      Oh, and the economy was growing at a fairly robust rate (considering we’d just come out of a global recession) pre-Osborne effect. 

    • aracataca

      What are you talking about? Recessions are called when there are 2 quarters of negative growth and have been since the 1930s. This is the first double dip since the 1970s and I know everyone would want to join me in congratulating Osborne and his team for this marvellous achievement. Very well done indeed. 

      • MonkeyBot5000

         The reason you need to see the data from before and after the spending review is that you can’t say tell whether growth started to increase/decrease since the spending review or whether it was continuing a trend that began before the review.

        It’s not about the definition of a recession.

  • We are in a perfect storm where all political parties are both right and wrong because their decisions are based on a flawed framework.

    No one seems  to questions our baseline understanding of what is really going on, what is causing our current reality.

    There is no vision and no leadership and sadly there is little true democracy.

    We have created a capitalist monster that can only work with growth. Out system of debt based money is part of the systemic problem which means we can only get growth with more debt.

    The media talk about GDP as if it measures productive output but it doesn’t. Growth and consumption are built into a system which strips us of our humanity. The system drives a form of slavery which means the rich get ever richer and the poor hold all the debt.

    So far, I have seen zero ideas from Ed, Nick, David or George for that matter apart from a myopic ideology.

    Politics and the people in power all read the same economics books and went to the same schools. Party politics is tribal and new ideas and innovations are driven out because individual thoughts and ideas are not welcome.

    • trotters1957

      The 30 year neo-liberal consensus has shown to be a failure and a con trick but no-one has come up with any alternative.
      I remember living through the 70’s when it was equally clear that the post-war social democratic consensus was failing but no-one came up with any new ideas.
      Unfortunately Thatcher and Reagan with the backing of a newly confident business elite won.

      We desperately need some new ideas but until the elite start to be hurt or scared nothing will happen. Their grip on both national and international institutions is total.

      • Peter Barnard

        @ Paul H (Trotters1957),

        You may like this, Paul (courtesy of Will Rogers) : ”

        “The money
        was all appropriated for the top in the hopes that it would trickle down to the
        needy. Mr. Hoover didn’t know that money trickled up. Give it to the
        people at the bottom and the people at the top will have it before night,
        anyhow. But it will at least have passed through the poor fellow’s hands.”

        • trotters1957

          We need some Roosevelt’s now to blow away this failed consensus, Peter. I can’t see any on the horizon, even Obama has been a disappointment. 
          But I suspect it’s because of the grip that the rich have on just about every institution and policy in both the UK and US.At least in the 30’s they were fearful of revolution and knew they might need us to defend their interests against Germany and to keep the Empire together.

          They don’t need anyone now, if they have a problem they can pick up and move to the Far East or wherever.  Even the tax systems need to be competitive or off they pop.

          • Peter Barnard

            @ Paul H,

            Combination of the “grip of the rich,” Paul,  the Culture of Contentment (J K Galbraith), sustained brain-washing of the last thirty years or so, and the successful (but untrue) propagation of the equation, a “mixed economy” = “socialism.”

  • Jon Newton

    Label your axes, Ferg.

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