Skilled or lucky?

Tim Harford is always worth a read. As I've mentioned, he's a journalist also trained as an economist, hence he's able to explain things better that most of us economists. He's recently blogged about whether governments need to be skilled or lucky to get re-elected.

Lucky in that the election is held when the economy is looking good, in the boom part of the cycle, or unlucky in that the election has to happen when the economy is depressed. Clearly, by May 6th we'll know how things are for the UK because we'll know 2010Q1 (that's January-March of this year) GDP growth figures and hence we'll know if the 0.4% growth recorded in 2009 is a sign of things to come or a blip.

But, in reality, how much control does Gordon Brown have over the economy? He isn't in every workplace geeing on the staff to better things (thankfully), and the UK isn't a centrally planned economy (thankfully). But of course, as Gordon Brown has tried to establish that the recession was caused by external shocks (from the US mainly), his opponents have charged that the good times must have been helped by external shocks too, hence not allowing him credit for the unprecedented period of economic growth that came before this recession.

My personal take (and this isn't a Labour voter speaking - you have heard me praise the Thatcher government in lectures for tackling inflation!) is that it is much easier to wreck and economy than to make it work. Sure, Labour and Brown inherited some good work from Major's government, but it would have been very easy to wreck all this rather than to keep it going.

So some credit must be given for the long growth enjoyed in this country before the recession, and while some decisions in the recession were not wise, none were economic no-brainers - you all know by now how difficult it is to exert any influence on the economy because it's such a complicated beast. And it's hard to argue the source of the downturn was adverse economic events elsewhere - even if the fundamentals here in the UK were less solid than we previously thought, contributing to the large downturn here compared to, say, Canada.

Hence this whole thing about luck and skill. Brown's having to call an election in a less rosy economic period, and can we ascertain whether Brown has shown skill over the years, or whether he's been incompetent. Before you rush to judge him as incompetent, use the economics you've learnt this term as you revise...