It’s A Wonderful Life (and we shouldn’t forget it)

Jimmy Stewart’s film is a feel good Christmas classic. You will all probably have seen it at some point, but in case you haven’t, contemplating suicide, Stewart’s character, George Bailey, is shown by Clarence, an angel, how his family and town would be if he had not been born. Seeing the positive impact his life has had on his family and his town, George begins to appreciate his life and the film ends with him running through his town shouting Merry Christmas to all and sundry. 

The news at the moment would make even the most positive person feel they need a Clarence. Doom and gloom doesn’t come close to describing it.  Industrial action at a level we haven’t seen for years with no end in sight, and as the media love telling us, apparently we are entering what will be the longest recession in the UK’s history.

Well I think some perspective is required.  Firstly, as Alan used to say economists have predicted 20 of the last seven recessions and secondly, if it comes, surely the depth of the recession matters more than how long it lasts, and right now even the most pessimistic are suggesting it will be relatively shallow.

But what does that mean in reality?  Well assuming inflation of 10% a recession of 0.2% means our economy (GDP) grew by 9.8% in nominal terms.  We would not be in recession if our GDP grew by 0.1% which means it would have grown by 10.1%.  Now if you can tell the difference as you go about your daily life between 9.8% and 10.1% in terms of economic growth you are a better person than me, but it makes good headlines doesn’t it.

Now I am not saying that everything is fantastic as it obviously isn’t just now, but in general we do not have much to complain about. Let’s be honest, if you lived in a world without news would you even think things were that bad?

I am not long back from a business trip to London and I had to pay twice what I have in the past for a hotel.  Trying to get a reservation in a restaurant was far harder than is normally the case for the time of year and my flight up and down was full.  Had you asked me if the economy was in a bad way I would have laughed you out of town but we are constantly being told it is.

Sure some things are maybe not as perfect as we would like, but I also believe some perspective is required.  During the depths of the pandemic when normal life was on hold, if you had told me we would be back to having a society functioning at 90% by now, like most people I would have bitten your hand off.  Given we effectively shut everything down for nearly two years I think it is remarkable that we are doing as well as we are having endured a once in a century event.

The changes we have seen since the pandemic took hold have been seismic. Globally millions of people decided to leave employment and as a result in the West there are more job openings than people available to fill them. Supply chains have also broken as countries deal differently with the pandemic, but in time these imbalances will get back to normal, all we need is a bit of patience. Let’s be honest if it takes a bit longer for a car or oven we order to arrive we haven’t got too much to complain about.

I suggest that until then we count our blessings and appreciate the things we take for granted in our lives which our ancestors would have marvelled at.

Oh, and one last thing to remember, since the Great Depression, there have been 21 years that the stockmarket has had negative returns (like this year). The following year was positive 18 times - 11 of which were double digit gains. Nobody knows if it will be the same this time but I like the odds!

So until 2023 every one at ASAM wishes you good health and a peaceful Christmas with your loved ones.