As I was about to post this I saw Paul Krugman had (typically!) got there first, but I think I slightly prefer my version so I’ll post it nevertheless.
Once upon a time there was a land governed by a king. The land was productive, with many small firms making all sorts of goods. But recently the land had suffered a mysterious misfortunate: some of the businesses had closed, and some people were looking for work.
The king was a superstitious man. In particular, he believed there were good letters, and bad letters. He thought the letter G was particularly bad. So one day he told his courtiers that he had decided what the problem with his land was. Its ills were caused by owners of firms whose name began with the letter G. They were bringing bad luck to the economy as a whole. So he ordered all firms owned by people whose name began with the letter G to close down.
Now some advised the king against this action. While they did not dispute that G might indeed be an unlucky letter, they felt that closing down any firms while the economy was already weak was not a wise policy. The king was not pleased, and ordered that these advisers be locked up. So the king’s policy began to be implemented.
Now many firms were owned by people whose name began with the letter G, and as the king’s policy was implemented further woe came to his land. The amount produced in the land declined further, and those working for the firms that had been closed became unemployed, and so had less money to spend. But his loyal courtiers proclaimed that this had nothing to do with the king’s order, but was the result of a fall in demand from overseas for the economy’s products. There was some truth in that, because some other countries had chosen to follow the king’s example and also close down firms whose owner’s name began with G.
Unrest in the country grew, and the king became unpopular. His loyal courtiers became concerned that the king could be overthrown. So they quietly slowed down the process of closing down the businesses whose owners names began with G. At the same time, some of those who used to work for firms that the king had ordered closed found work with other firms, and these other firms expanded their output. It is rumoured that some people also changed their name to something not beginning with G, and reopened their old businesses. So the economy began to recover, and output growth was positive again.
So it came to pass that the courtiers now hailed the wisdom of their king. The economy had been purged of the letter G, and was now clearly healthier as a result. The original critics of his policy had been shown to be wrong, and the king doubled their jail terms. Newspapers throughout the land proclaimed their king’s wisdom. Knowing no better, the people reaffirmed their devotion to the king.
At which point the king said that he never much liked the letter H either.