Explicit and tacit knowledge in the national accounts

I was struck last month by the blizzard of numbers and alternative views presented as a part of the release of the national accounts.

The economy was down, but the floods in QLD and Vic had largely caused the problem and was it short term only, consumer spending was up, but we are saving more than ever, and so on, and on, and on. However,  the overall picture is so rosy that the Reserve Bank appeared likely to put up interest rates again pretty soon.

Little of it struck true at a “gut” level, a two speed economy is probably more like a 6 speed economy, with a couple of gears going backwards, and the picture if you take away mining, just a horrible mess of varying degrees.

Thank heavens over the last fortnight the Westpac chief economist has come out and said that interest rates were in fact too high, and all but the mining industry was struggling. On Monday the Reserve Bank minutes released indicated they were taking note of the problems, and rates were likely to be steady for a while. 

In my patch, in and around the food industry, one of the largest drivers in the economy, the landscape is littered with landmines. It has not been worse in my 35 years of engagement. No numbers here, just tacit knowledge based on observation, discussion, and experience, all of which run counter to the heroic stuff mouthed explicitly by the treasurer, most economists, and the shiny pants set in Canberra who just rely on the macro numbers.