Tuesday, 3 November 2015

Andrew Charlton: A Popular Misconception

Andrew Charlton is an economist and served as a senior advisor to Kevin Rudd, the former Prime Minister of Australia. He is also the author of two books: Fair Trade for All, which he co-authored with Joseph Stiglitz, and Ozonomics. “The most popular misconception in economics and politics is that if the economy is humming along, the government must be doing a good job,” he has written. “It must be a capable economic manager and its policies must be working.”

This is not necessarily so, he wrote in a summary of Ozonomics published in Centrepiece. Rather, this is an assumption that politicians promote during good economic times. “The idea that they hold the fortune of the nation in the palm of their hands appeals to them, and they want the public to take the strong economy as evidence of their skill and omnipotence.”

The media is part of the equation, he says, because of its tendency to simplify with heroes to give credit to when all is well, and villains to blame when it isn’t.

In reality, he argues, politicians have much less control over the economy than they let on. “Certainly, there can be policy successes and policy failures, but more often than not the condition of the economy is determined by factors outside the control of politicians.”

Claims about the state of the economy made by any government, he says, should be thoroughly scrutinized, because what the public believes about its wealth influences decisions made about the future.

Dr. Andrew Charlton holds a doctorate in economics from Oxford University, and has worked for the London School of Economics and the United Nations.

Visit https://andrewcharltonau.wordpress.com/  to know more about Andrew Charlton.

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