Following publication of revised GDP figures today, Robert Peston writes:
"a particular school of Keynesian economists may choose to re-examine their contention that only a fool or a liar would say there is a legitimate debate about whether George Osborne's policies were good or bad for the recovery."
Sorry Robert, but this is just nonsense: complete and utter nonsense. This "particular school" has never based their assessment on observing what is still the weakest UK recovery since anyone can remember and looking for something to blame. They based it on what macro theory and the great majority of empirical studies tell us would be the impact of the fiscal austerity that happened. At the conservative end of such assessments is the OBR, who calculate austerity reduced GDP growth by 1% in each of the financial years 2011 and 2012. Estimates of this kind are completely independent of data revisions for one period in one country. We might doubt such estimates if they implied that without austerity we would have had implausibly rapid growth, but for this recovery they do not.
The other point completely missing from Peston's account is that the UK's growth performance even with these revisions is still terrible. As I have often pointed out, high inward migration in recent years means you really have to look at GDP per head to make comparative statements about this recovery. As the ONS point out, this new data still shows that only in this year has GDP per head exceeded its pre-recession peak. Assuming recent data revisions have not changed this, average growth in GDP per head between 1955 and 2008 was about 2.25%. Any recovery from such a deep recession should have seen growth rates well in excess of this. Instead the revised data give us 1.1% growth in 2011, 0.5% in 2012, 1.5% in 2013. Only by 2014 had we got near the long term average growth rate. This is still an absolutely terrible performance for a recovery.
That is not some "particular school" talking. That is just basic stuff that any good economic journalist should point out: see Ben Chu for example. I suspect it would also be what Robert Peston would point out if this was not all so political and the government were not breathing down the BBC's neck. The mediamacro problem is still very much with us.