Not much right? It is if you’re talking about the gross domestic product of an economy the size of the United Kingdom, especially if any drop means a step back into a Great Recession-sized hole. One economist called it “shockingly bad.” Another, “horrendous.”
Compare it to the 3.2 percent growth the U.S. charted that same quarter: not bad, but at that rate it would take many years to replace the jobs shed in the recession while keeping pace with new workers entering the job market.
The leaders of Britain’s conservative government, which has chosen austerity over stimulus, blamed the coldest December in 100 years. “These are obviously disappointing numbers, but the [Office of National Statistics] has made it very clear that the fall in GDP was driven by the terrible weather in December,” said Chancellor of the Exchequer George Osborne, whose office is analogous to treasury secretary in the U.S. “We will not be blown off course by bad weather,” he vowed.
That bad weather – not bad policy – caused the UK’s recovery to falter is debatable. But the fact that bad weather could be responsible is straight out of Economics 101: if people stay at home and huddle under blankets, the economy tanks. Gross domestic product is a measure of commerce: the more buying and selling that happens in a country the better, even if it’s the same money changing hands again and again.
Like many ideas in economics, this is counterintuitive because it seems to violate good family budget practice. If money is tight at home, the first thing you do is cut back on expenses. The last thing you do is encourage the brood to buy new stuff.
Some have responded to the recession by trying to find new ways to grow, as with the U.S. stimulus. Others have responded with austerity, as in Britain. The battle between the two tendencies is playing out in every country, state, city and town. (And, according to Freud’s idea of Eros and Thanatos, in every human soul.)
In Saugerties, I see it in the response to the town’s involvement in the purchase of Opus 40, the utterly unique and beguiling bluestone sculpture park in Highwoods. The family of creator Harvey Fite, which has managed it for decades, wants to sell the property. The town would like to make sure it remains open to the public. So it’s got a committee and consultant Vern Benjamin working on raising money through grants and donors to buy the property and turn it over to a non-profit. The plan is to recoup any costs of setting this up (about $20,000 – $25,000 so far) with grant money.
While many in the community applaud the town leading the effort to keep Opus 40 open to the public and make it a destination for more cool arts and music events through the non-profit, many others think it’s gamble not worth taking. Sure, they say, the town says this isn’t going to cost us money, but what if it doesn’t work? What if the town needs to put in a new road, or its liability insurance goes up, or the cost of maintenance is significant? Expect these arguments to be waged throughout the process, however long it takes, with the grandest volleys to be changed before the town elections.
I love the new Saugerties library, but I bet the $7 million bond voters approved in May 2008 would go down if it were held tomorrow. (Actually the timing was great – a month before Bear Stearns went under.)
These days, too many people would see the renovation and expansion as an unnecessary luxury. The community doesn’t need a state-of-the-art facility nearly three times the size of the old one, they’d say. It doesn’t need a new meeting space. It doesn’t need a local history room, or rooms for tutors and businesspeople. It doesn’t need new space for books – people can order books they want from other libraries. Wait until the economy improves, they’d say.
But then we wouldn’t have a new village destination sure to have a positive impact on businesses, community pride and the education of students and auto-didacts alike.
Or the Kiwanis Ice Arena, which celebrated its 10th anniversary this week. Here’s an example of self-sustaining public asset that has benefited from the town assistance. The result is a world-class ice arena that brings in skaters from miles around, and makes Cantine Field the best year-round recreational park in the region. Would any of us now want to go back and say to the Kiwanis “Good idea, but you’re on your own.”?
My point isn’t that every opportunity for public investment which promises public benefit should be embraced. Each should be judged by its own merits. A poorly planned or unrealistic endeavor could end up costing a lot of money and not doing the community much good. But we can’t let economic anxiety cause us to sabotage our future by failing to invest in it.