On the Guardian’s coverage of economics: Heidi Moore really doesn’t understand the subject
OR, if I’m to be entirely fair, on the new US Guardian’s coverage of economics. They’ve hired some bird called Heidi Moore from one of the public radio programmes to be their US finance and economics editor. And today she said this:
For one, it will be harder for us to know when we’re in a recession. Right now, a recession means several quarters of negative GDP. Getting to negative from where we are now isn’t hard; getting there when we’re 3% higher will be. While it may seem useful to avoid recession right now, that is actually a bad thing: it means that in periods when we do get negative GDP, we’ll be in truly terrible shape.
Oh my word……
You might think that this is just a blooper but later she does show that she really doesn’t understand the subject.
Please note that this isn’t just because she’s a leftie (at the Guardian, big surprise, right?) and she’s therefore got a different take on the world from capitalist neo-running pigdog like me. It really is that she’s not grasped two essential parts of the subject she’s trying to talk about.
The first is that we don’t actually have something called “negative GDP”. Well, OK, we do, but it’s so rare and far between that you need an entire and complete cock up like the Soviet Union to even have any of it. Let alone a whole economy of it. what we can have tough is a negative or positive change in GDP: it grows or it shrinks.
Which brings us to the second problem: if we decide, as the US just has done, that they’ve been counting wrong for years and some adjustments need to be made, well, fine. But than then becomes the base load for the next claculations about whether GDP is rising or falling. And if it falls for two quarters (not several) then we’d be in a recession again. Yes, even though we started from 3% higher it’s the falling for two quarters that counts, not the level itself.
I disagree a lot (a lot a lot) with much of the Guardian’s economics coverage. But I’ve not seen someone show complete ignorance of the subject in this manner before.