Blame It On The Weather

Oh my.

So sophisticated is our society that we now have discovered the real reason economic data bumps about a bit. The weather.

The UK economy shrank in recent months, not because of asinine austerity programs aimed at cutting the government deficit, but, we are told, because the poor dears suffered a bout of miserable weather. Other than that, presumably the economy was humming along just fine. My father used to have words for this, but I cannot repeat them here.

My view is that the UK economy shrank because the government set out to reduce it. That’s the direct outcome from the policies they introduced. The magic comes later when it, for mysterious reasons known only to orthodox economists, will spring back to life as all those recently fired government workers accept jobs at vastly reduced wages and happily adapt to being unable to pay for their mortgages, electricity bills and so on.

Adaptability is the watchword of the neoclassical system. Except, of course, for the professors who teach it. They are above the fray of ordinary life in their monastic endeavors to reveal the truth to the rest of us here on earth. Now I think about it, there isn’t an ounce of adaptability in orthodoxy at all.

And before my American friends laugh too much at the wimpy Brits for capitulating to the weather … this morning’s awful uptick in new claims for unemployment assistance is being dismissed as a quirk of the weather. Apparently four southern states fell behind in their paperwork due to inclement weather. We need to set them remedial assignments.

Joking aside: today’s numbers were disappointing. A rise of 51,000 to 454,000 is hardly a harbinger of a breakthrough in the job market. Having said that, I buy the bad weather argument and urge you all to ignore this bump for the time being. Let’s wait until February before passing judgement on the actual situation. Maybe the weather will improve by then.

Meanwhile we should all be humbled by the knowledge that our ability to tell what’s going on is so easily disrupted by the forces of nature. We really are more limited than we like to think!