On The One Hand…


Reading Sir Alan Budd’s Budget Report, I was reminded of a hoary old joke about economists. A Chief Executive of one of Britain’s top companies wrote in a job vacancy advertisement, ‘Wanted a one-armed economist.’ Not surprisingly a number of one-armed people applied for the job –  some of them, or so it is rumoured, were even economists. One was duly appointed. The grateful applicant asked the obvious question. ‘Could I ask you why you wanted an economist with one arm? ‘Simple’, said his new boss.’ I was sick to death of hearing that on the one hand we could do this and on the other hand that’.

David and Boy George are confident people – some would say over-confident.  Sir Alan Budd is their man. Budd occupies an orderly, neat and peaceful world. His report is full of agreeable fan charts.  Alan has to predict the chances of the Budget deficit reduction plan achieving its objectives. If you haven’t read it you may be relieved to know that taking everything into account the Government has a fifty percent chance of  achieving its goals. Sir Alan has all his lemons in neat rows. They add up. He describes a world where trade and output rise steadily through time, inflation is low, world trade is bouyant, unemployment goes up and then down. However, recently a relative of mine came back from a visit to his doctor. ‘Well’, his family said, ‘what news.’ ‘There is good news and bad news. What do you wish to hear first?’ ‘We can take it, give us the bad news.’ There is a fifty percent chance that I shall have a heart attack in the next five years.’ The relatives were shocked.’For God’s sake, give us the good news.’ ‘There is a fifty percent chance that I won’t.’ Laughter. My advice is that when an economist gives you an important forecast, especially when his reputation and job may depend on its accuracy, look him straight in the eyes.  Take the three of them, Dave, Boy George, and Alan, and what do you see? I see anxiety, panic and fear. Sir Alan offers a caveat. He wishes us to know that all his forecasts are subject to considerable uncertainty. What he means is that there is a fair old chance that the whole thing may go pear-shaped.

Since this is my day for stories I offer another. Every air traveller who has clocked up a great many air-miles knows that statistically speaking  he is likely to experience something going very wrong – his encounter with death. I have had mine. Unexpectedly a pilot on a transatlantic journey announced to the passengers, ‘You may have heard a thump on the port side of the plane. We have lost the use of an engine. I am telling you this because I am going to put the plane into a steep dive and attempt to restart the engine.’ And then a few minutes later, ‘I’m so sorry to tell you this but the engine did not re-start and the plane has been diverted to another airport. Don’t worry, we practice spoof landings like this in a simulator.’ ‘Good God’, said the American sitting next to me, ‘I don’t want to hear that, I want to know how many times this guy has made an emergency landing on one engine.’ I thought of this when David Cameron told reporters that the American fears that European cuts in budget deficits were coming too soon and were too great were groundless. I looked up a table. Growth in the Eurozone is forecast to grow at an annual rate of 1 percent. Did our Dave realise that statistically speaking  such a small number was in the range of statistical error. How about no growth in Britain’s major export market!

So there you are. Dave and George, precious little experience of flying anywhere, but full of confidence that they can – and Alan Budd who has been there – or about – many times and  knows that there is a fifty percent chance of a crash. ‘Darling’, I hear you call. ‘Let’s get in the trip to the Seychelles we have promised ourselves while there is time.’ ‘What do you mean when there is still time.’ Well, on the one hand it may turn out like this for us but on the other hand it might not. ‘For heavens sake’, says darling, ‘Let’s pack the bags.’

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