Economists have never had it so good. Along with manufacturers of face masks and fashion houses coming up with chic designer visor-integrated head gear, economists are experiencing a boom time. If only we knew (or particularly cared) who they individually were, we could find yet another way of combating confinement by playing Fantasy Economics League. Each week we could use our fantasy cash in reorganising our economist line-up. I’ll have him or her, whoever him or her are, as last week they came up with such and such a forecast. And the fantasy values would be enormous; unfathomable in fact to mere mortals such as you and me. Billions, trillions; in the Fantasy Economics League money has lost all meaning. Pick a number and then just add however many noughts might be considered appropriate.
There have been previous boom times. The financial crisis spread over several years witnessed the growth of economists in inverse proportion to the red numbers of national economies and the minuses prefixed to a concept we are familiar with but very few of us have the faintest idea what it means - gross domestic product. Whole squads of economists were coming off the bench in weaving intricate jargon passing patterns on the fields of economies’ play. Little made sense other than references to recession, which we can all understand to mean something or some things unpleasant, such as unemployment and higher taxes.
As financial crisis started to fade the way that all bad dreams drift from the memory, economists were suddenly fearing redundancy, or just simply going back to applying plus signs in front of growth percentages that they had hatched from somewhere. But then came Brexit. Economist bingo! Forecasts on an industrial scale that were alighted on depending upon a particular view and particular scenarios (more of them below), and all of them - positive or negative - appended with the caveat question: do you actually know?
We still have Brexit; in theory anyway from a trade negotiation point of view. It’s as if economists’ Christmases have all come at once. The world of business, and indeed everyone else, may not like uncertainties, but for economists they are manna from Heaven. Hence, the Fantasy Economics League; they all have their forecasts and predictions and they keep growing exponentially - the forecasts as well as the number of economists.. Crisis is rotten for employment, but not for the employment of economists.
Given there’s so much of this stuff, where do we begin? Or do we prefer to try our best to ignore it on the basis that it is invariably bad news but still comparatively meaningless? The Balearic government, until recently the bearers of greater economic glad tidings than the ranks of everyday economist folk, have succumbed to the inevitable gloom. Well, they could hardly not do. A 31.6% fall in regional GDP, the equivalent of 9,273 million euros, which is a remarkably precise figure, this calculation more likely having come from Llorenç Pou, the government’s director-general for the economic model, than from the minister, Iago Negueruela. Llorenç, you’re in the Fantasy Economics League.
Then we have the IMF, cheery souls that they are. An eight per cent decrease in Spain’s GDP over the first two quarters of this year, and this will be greater than the seven per cent loss that Spain experienced over six years of the financial crisis from 2008 to 2013. Gita Gopinath, that’s the lady. The IMF’s chief economist, she says that there is going to be the biggest recession in the world economy since the Great Depression. Gita is definitely one for the Fantasy Economics League; the star striker in fact. The global economy will shrink by three per cent GDP. But get this - it only fell by 0.1% because of the subprime crisis.
Back in the Balearics, and the Fundació Impulsa has most certainly never had it so good. We are getting very used to hearing about the foundation even if we don’t really understand what it does, other than come up with loads of figures and endlessly refer to productivity. Antoni Riera, he’s the director, a professor of applied economics and a member of the government’s coronavirus monitoring committee, to boot. Two per cent of regional GDP gone in the space of four weeks, he says; 612.14 million euros.
The foundation has four scenarios regarding the restrictions, one of these being the maintenance of general limitations to activity until a vaccine’s ready. Putting a figure on this is nigh on impossible, but it will entail 300,000 unemployed and a GDP loss of a third because it’ll all be going on for twelve to eighteen months. So, not totally impossible. Prof. Riera’s another one for the Fantasy Economics League.