I remember 2007. The US was at war, business was booming and forward looking economists were shouting like crazy people in a downtown square: "this economical boom is unsustainable... are we headed for recession?" At the same the US was hated by many countries in the world because of the Bush doctrine on foreign policy. While these views were not the popular in mainstream American media at the time, I was aware of it. The reason, I had a paper route, and listened to the BBC morning broadcasts on KGOU, our local NPR station.
I must say that this was not the easiest part of my life, and being a grad student with wife and kid, makes one do some pretty hard things, but as much as the paper route gave me about two hundred extra dollars per month, listing to international news helped to broaden my understanding of the world and helped me to keep an ear on the railroad of international business.
Seeing how the great recession of 2008 started, ended, and continues to affect the world economy, it is easy to see that many of our leaders have a very limited understanding about how the world works. Or that they are so caught up in their ideology that they are unwilling to get out of the box that is quickly turning into a coffin. Let me try to explain this with my opinion of how four of the world's governments have dealt with economic policy since 2008. I choose 2008 because it was a global economic resetting period, a view that many fail to admit.
China. In 2008, China GDP growth was about 9.6% and until now, China's government continued investing in the country's growth.
Germany. Through the recession years, the majority of the private sector stopped hiring, increased R&D spending. Government worked on making social nets stronger and cheaper. Invested in renewable energy especially solar.
US. Private business cut jobs at all levels to make business leaner. Exported manufacturing to China. Invested in hydrocarbon exploration. Cut some R&D. Government applied stimulus, bailed out banking industry, tried to sure up social nets, government stalled.
UK. Austerity. Cut government spending. Cut social net spending. Was unwilling to help financial sector for fear of "moral hazard"
As a scientist, my work is based on the belief that one point does not a trend make. I won't even accept four points to make a callibration curve. And while I am aware that the few macro econominc decisions made by the governments and business of these countries do not dictate the response of the economy as a whole. Normalizing the values and applying firm statistical functions to the data helps us to realize that we can learn from each other and make better economic decisions.
I can assume that policy leaders have access to the same data that I have. After all its free online. But then again, most people get their information from The Daily Show and Fox News. But I digress.
The point I am trying to make here is that we have a lot of data to drive our policy decisions, yet we govern on political ideology. So why do we need government?
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