The Guardian view on the Brexit economy: the UK risks recession | Editorial

There is no good time to be leaving the EU but this might be the worst - as a failure to learn the lessons of the 2008 crash leaves the country exposed to another downturn

There is more than a little truth in the idea that those who do not learn from history are condemned to repeat it. The global financial crisis was meant to lead to an economic and political reckoning for neoliberals carried away with their own ideology. They made all sorts of unrealistic promises that even a brief reflection would have shattered. Yet more than a decade on, the reckoning is far from over. This is especially true in the United Kingdom, whose prime minister peddles a sunny optimism in the merits of splendid isolation to fuel his Brexit fantasies. History ought to be a protection against this stripe of reckless utopianism. Yet in a world of instant headlines and short-term hits, who has time to dwell on the inconvenient truths? Still, dwell we must. David Blanchflower, the US-based economist, points out that thanks to a short-sighted austerity policy this has been the slowest economic recovery for 300 years. While politicians trumpet near-record levels of unemployment and wage growth, they fail to mention that the latest figures show that average earnings, when adjusted for inflation, stand at 502 a week in total pay, 23 lower than in February 2008.

There's a tendency to put the best possible spin on GDP data, despite this being notoriously difficult to forecast. This week it was reported that the UK's economy grew faster than expected in July, with breathless reporting that despite earlier concerns there was now only a 10% chance of recession. Yet in 2008 the forecasts for GDP were all of rosy growth in the UK. It was only a year later that they were revised down to show what was obvious: that Britain was in a slump. Crashing a car because you were looking backwards rather than forwards is no excuse. Professor Blanchflower became, briefly, a household name a decade ago. He sat on the Bank of England's monetary policy committee and argued that the US economy in April 2008 was in recession and the UK was about to go into one. To alleviate the pain, the economist argued for swift and large rate cuts. For his troubles he was called "bonkers". He told his fellow economists at the Bank that they were "fiddling while Rome burns". They fiddled; the UK economy almost burned down.