Introduction

In my view mediamacro (how macroeconomics is presented in the media) was critical to the 2015 election result. Post 4.1 sets the scene, by looking at the apparent contradiction between Conservative claims that the economy was strong and Labour claims about a cost of living crisis. The reality, outlined in Post 4.2, was that the economy was not strong in any meaningful sense, and had performed poorly under the coalition relative to the previous Labour government. Post 4.3 looks at the role of business leaders in elections.

To emphasise the chasm between economic reality and how things were portrayed by the media, I published shortly before the election a series of posts on ‘mediamacro myths’, of which Post 4.4 is a summary. Needless to say, economic reporting did not improve. In the last few days of the campaign the broadcast media focused on the Conservative line that a Labour–SNP coalition would bring chaos. In Post 4.5 I explain why it was another myth: as I wrote, ‘If you want chaos, see what will happen to the Conservative party during the EU referendum’. But it was a powerful myth because it appealed to English nationalism, and also because there was no one arguing against it.

Post 4.6 sets out why mediamacro was a key factor behind the Conservative success. There was also, as I suggest in Post 4.7, a large element of luck. But the luck should not obscure my claim that had the media reported macroeconomic facts rather than mediamacro myths, the Conservatives would not have won, and among other things we would still be in the EU. And of course luck runs out eventually.

4.1

The UK Feel-Good Factor

Thursday, 20 November 2014

If UK GDP growth has been so good (OK, I’m exaggerating) over the last two years, and the economy is growing faster than the Eurozone and Japan, why are most people still worse off than before the recession?

The first reason is straightforward. A large amount of the increase in GDP we have seen since 2007 is the result of there being more people in the UK. Figure 4.1 plots real GDP and real GDP per capita, where I’ve normalised the second series so it starts at the same point in 2007 Q1.