Rejoice! For the good times are surely here again. National Statistics released their estimate for economic growth this week. They think that the economy grew by 0.8 percent in the last three months.
Hardly giddying. But enough for the Bankers’ Coalition to claim George Osborne’s scorched earth Spending Review was working its mysterious magic.
From the ashes of the bad old public sector economy a new, free-market phoenix is rising.
Osborne was falling over himself to claim the laurels, declaring a “vote of confidence” in his slash-and-burn economics.
This is delusional.
Most obviously, the cuts have not taken effect yet. When the cuts bite, in all likelihood the economy will tank.
And growth is already slowing.
From April to June, the economy grew 1.2 per cent. From July to September, it grew 0.8 per cent.
But peer a little closer at the official statistics, and even this growth starts to look a little less than secure.
National Statistics provide a breakdown of their figures. Overall growth is 0.8 per cent.
Both manufacturing and most service industries grew still slower than that. A quarter of services’ contribution to overall growth is from the government’s own spending. And half comes from the state-assisted financial services industry.
Shove £1,300 billion at an industry, as we did with the banks, and it is to be hoped at least some economic growth will occur there.
Actual private sector growth - the kind Osborne fervently prays for - depended on a miniature boom in construction.
This is where things become a little peculiar.
From June to August, the value produced by construction industry grew 9.5 per cent. For the last three months, it grew at 4.0 per cent.
This is far quicker than the rest of the economy. But this is not a booming private industry.
Housebuilding is at a record low. Few new commercial properties are being built.
It seems that whatever growth occurred, earlier this year, was driven by public sector contracts brought forward, ahead of the cuts.
But even this may not completely explain the construction “recovery”.
The main GDP figure is built from surveys of economic activity, overseen by government statisticians.
In a little-noticed change, from January this year, National Statistics brought in a new way to survey construction activity.
This coincides with the apparent construction boom. Before the new survey was brought in, construction was in decline. From January onwards, this decline slowed - and then the boom began.
But industry surveys over the same period find “declining workloads”.
The cancellation of Building Schools for the Future, in particular, has been a big hit.
So the picture is already unclear. Official figures and industry surveys say rather different things.
A new way of producing government figures has produced results very convenient for the government.
The new government figures might be accurate. But they cannot support the weight placed on them by the Coalition.
From the start, this government has defined itself in opposition to reality.
Where the figures aren’t to their liking, they pull out new ones.
The Treasury provided a laughable “distributional analysis” of the Spending Review that claimed it was progressive - hitting the poorest least.
The independent Institute of Fiscal Studies tore this apart. Massive spending cuts hit the poorest hardest, since they rely most on public spending.
The government are constructing their own reality. A Cabinet of millionaires can afford to.
The rest of us suffer the consequences of their decisions.
There is a method to the Cabinet’s madness.
It is the crazy logic of the crisis itself. The financial system has been bailed out - not reformed or regulated, but lavished with cash.
Because it is essentially unreformed, it will crash again. Mervyn King, governor of the Bank of England, hinted at this in a recent speech.
But the economy could not carry the expense of another bailout. As the Bank of International Settlements warned earlier this year in its annual report, it is “too fragile” to cope.
So public spending is being cleared out of the way in case another bailout is needed.
The weakness of British capitalism has forced a simple choice: we have either the City of London, or we can have a welfare state. Both require public spending. We cannot afford both.
The Bankers’ Coalition has chosen the City. We must force the opposite answer upon them.
That means building a mass, national movement against the cuts. The Coalition of Resistance conference on 27 November is a vital step on the way.
Radical economist James Meadway has been an important critic of austerity economics and at the forefront of efforts to promulgate an alternative. James is co-author of Crisis in the Eurozone (2012) and Marx for Today (2014).