Kevin Hassett, of the American Enterprise Institute, has a pretty good item over at Bloomberg about the good economic developments over the past 12 months, which inevitably get overlooked with so much understandable focus on the sub-prime mortgage snafu and the associated mega-buck losses sustained by some of the world’s top financial institutions, such as Citi and Merrill. But much of the economic news is good; when I punch some numbers on my Bloomberg machine, I am reminded that a goodly number of African stock markets are up strongly this year – that nicely upsets the usual cliches of Africa as a story of unmitigated woe, not that there are not serious problems there of course. China’s stock market looks like a bubble but the growth of the economy is real enough, whatever one thinks of government statistics; one of the best performing stock markets of 2007 has been Germany’s, up more than 20% this year, despite the high exchange rate of the euro. France may be starting to turn a corner, despite my doubts on how far Sarkozy will go in liberalising that country’s economy. A weak dollar should boost American exports and hence help the US economy close its trade deficit. Most Latin American economies are on an upward curve and Venezuela’s Chavez received an admirable rebuff in his attempt to seize permanent power late in the year. (Quick question: what are readers’ bets for most promising economy in 2008?). Russia is problematic: its status as an energy exporter means it is enjoying a bonanza of revenues, but this needs to be matched the emergence of a large, broad middle class able to sustain the sort of entrepreneurial economy for the long term; India is a bright spot; most of central Europe, Scandanavia is in decent shape. Italy is a permanent car accident and a possible quitter of the euro, but Italy seems to have incredible powers of survival.
All of these developments should be borne in mind when you look at how Britain’s economy has performed. On one level, the figures are poor: we have UK public deficits despite years of economic growth; tax burdens are rising and productivity is not what it could be; but from my admittedly biased vantage point in central London, I do not see a country in crisis (what I do see is a statist political culture in decline or at best, paralysis, which is not quite the same thing); the inventiveness and entrepreneurial gusto in this country is impressive, although one worries about the impact of an exodus of bright talents to foreign, sunnier climes. All in all though, I think it quite wrong to end 2007 on a whiny note, so I will not. As far as the cause of liberty is concerned, there is all to play for; the ID card venture is not a done deal and the Big Brother state received a mighty poke in the eye this year with the fiasco of the lost data on 25m people. I get more and more sense from the media that Britons are losing patience with this state of affairs. Let’s hope so.
Wishing my fellow contributors and our readers a very happy, prosperous and healthy 2008.