One of the more troubling aspects of mainstream commentary in 2014 was its blandness. Statements were made with a purpose but also purposefully avoiding specifics. It was common to hear or read “the economy is improving” without being shown why or how in convincing fashion. After suffering a second bout of weakness in 2012 and 2013, unexpected of course, everyone simply believed those words because why not.
One of the offshoots of that vagueness was “global growth”; as in “the global economy is improving” so the local one will certainly follow. In many ways this was even more convenient because of its impreciseness. It essentially established an unfalsifiable premise: somewhere out there in the vast world there is growth, so soon there will everywhere be growth. It’s not logic so much as desperation. I wrote about it specifically in September 2014, suggesting that economists and policymakers were doing little more than praying to the god of global growth.
The curious part about that “pick-up in global demand” is exactly what I am driving at. What he is saying is that the economy in Japan will get better because some nebulous notion of the global economy will get better; or, if you want to be specific, they expect the economy to improve because the economy is expected to improve. While he (and those like him) will not admit to engaging such circular logic, that is what it really amounts to…
Someday there may indeed be a pick-up in global growth, though we will probably need all our fingers (and some toes) to count how many “unexpected” occurrences disrupted that “pick-up” over the years to come. And when it does come, there will be no need at all for vagueness about its features, as it will be obvious and unmistakable. Until then, these poor attempts at rational expectations manipulation should have been curtailed by now by even a modestly curious media that is sick of writing the same lines over and over.
Leave A Comment