Knock-knock-knocking on Europe’s door...

There are certain things you say in life that return to haunt you from time to time. Take the classic case of Professor Henry Morton, for instance. That name may not mean much outside a very restricted circle of science/history geeks with a special interest in the pioneering days of electronics. Many more people would instantly recognise the name of his more famous contemporary, Thomas Edison.

There is a reason why one is better remembered than the other, too. Thomas Edison invented the light-bulb... and while the basic invention has been improved upon since, it remains the gizmo of choice for illuminating all our homes to this very day.

Henry Morton, on the other hand, is remembered today (if at all) only for making this spectacular assessment of Edison’s invention back in 1880: “Everyone acquainted with the subject will recognise it as a conspicuous failure.”

Imagine how stupid he must have felt for the rest of his life, every single time he ever flicked a light switch on or off...

Then there was Hollywood producer Darryl Zanuck, who in 1946 predicted that: “television won’t last, because people will soon get tired of staring at a plywood box every night.”

Well, 70 years have since gone by, and there are no visible signs of fatigue yet. So much so, that we’ve even invented dozens of similar variations of the ‘plywood box’ theme to stare at ever since: computers, iPads, iPods, tablets, mobile phones.... and not only do we never, EVER tire of staring at them; but our eyes are permanently glued to their screens practically from birth.

Or how about King William I of Prussia, whose reaction to the invention of the steam engine in 1864 was: “No one will pay good money to get from Berlin to Potsdam in one hour, when he can ride his horse there in one day for free”? 

Not much to add to this one: I reckon even his horse would have said ‘neigh’...

All these examples (and there are plenty more) illustrate one inescapable reality about the fine art of clairvoyance. It’s not for amateurs. ‘Predictions’ are not only difficult things to get right... they can also be terribly dangerous when they go wrong. In fact, they should really come with a warning on the packet: ‘Caution: shooting your mouth off about the future can (and almost certainly will) have severely harmful effects on your credibility’.

There, now you’ve all been officially warned. No more excuses...

Oh, wait, maybe some excuses are in order. This week brought with it a sudden reminder of two of the most spectacularly misfired political predictions in recent history. Both centre on the same overall issue - Malta’s current economic performance – and both are eminently attributable to the same overall sort of political prejudice.

The only difference is that they came from the leaders of the Labour and Nationalist Party respectively. Strangely, these two political ‘opponents’ - who ‘oppose’ each other on anything and everything, even if their policy platforms on anything and everything are actually indistinguishable - had made almost identical predictions about the economic ‘disaster’ Malta would find itself today... if (‘Alla hares qatt’) we were ever to listen to one side and not the other. 

Let’s take the more recent example first: in September 2012, Simon Busuttil (then still an MEP) had this to say on the prospect of a Labour victory in 2013: “If these people are in charge of our economy they will commit serious mistakes. And it takes just one or two bad economic decisions to put a small country like ours off track. This is why I envisage that with a Labour government, we are likely to be knocking Europe’s door for a bailout in one or two years’ time...”

Hmm. OK, even if you buy into the argument Busuttil made last Friday – when he described the budgetary surplus registered this week an ‘easy populist gimmick’ (which sort of raises the question of why the Nationalists themselves found it so difficult to achieve in 25 years... but never mind that for now) -  the fact remains that: um.. no, we are not knocking on Europe’s door for a bailout. Not two years later, nor even four. 

Paradoxically, the clean opposite happened. When the EU bailed out Greece on multiple consecutive occasions, it turned to member states to foot the bill. Proportionately, Malta contributed more to the bail-out funds than other European countries. So in a sense, it was Europe that came knocking on our door for a bail-out.... not vice versa.

Besides: surplus or no surplus, the Maltese economy is currently growing by 12%, with all the major credit ratings agencies maintaining a positive outlook for the foreseeable future. This is acknowledged by the European Commission, not to mention all the local stakeholders: the Employers’ Association, the Chamber of Commerce, the GRTU, etc.

It would take a special sort of deluded political apparatchik – you know, the type who normally rushes to comment first under any political article - not to concede that Busuttil’s prophecy went slightly awry. Whatever charges you may lay at this government’s door, economic mismanagement cannot be one of them. (Not yet, anyway. After all, they’ve still got 21 years of catching up to do...)

Ah, but that brings me to the second misfired prediction: and this one takes us back a little further in time. There is a reason why a previously elusive budgetary surplus would suddenly materialise only now: and only part of it concerns the fact that the Labour government proved to be somewhat less Apocalyptic than predicted by Busuttil. 

For Busuttil is right about one thing. The budget surplus is partly the result of a €47 million reduction in government capital expenditure, which was made possible only by the fact that several (past and ongoing) infrastructural projects are co-funded by the EU.  

Separately, the surplus is also the direct consequence of the unprecedented economic growth rate. There is, after all, more than one way to skin a cat. If your target is to reduce the deficit to 3% of GDP, it can equally be achieved by either lowering expenditure, or increasing GDP. Muscat evidently chose the latter path, as he actually managed to reduce the deficit while raising his own recurrent expenditure. He said so himself: we are ‘earning more than we spend’... not ‘spending less than we earn’.

How did we end up in a situation where our economy grows by such an extent that we can pull off a budget surplus while (among other things) employing more people on the public payroll? What is the pull factor that attracts so many foreign companies to invest in Malta... to the extent that Muscat himself is rubbing his hands in anticipation of the bonanza of British trade that might head our way after Brexit?

Obviously the answer is a confluence of several things, but one of the more conspicuous ones has to be the fact that we are an EU member state. That is what relieved Muscat’s government of the some 75% of its local expenditure; that is what has generated new areas of economic activity, and permanently altered the entire profile of the Maltese workforce.  

Yet curiously, the man who now takes credit for all the economic praise heaped on his government had also once made almost the exact same prediction as Busuttil. 

Joseph Muscat, too, had foreboded economic catastrophe for Malta in a future that is remarkably similar to today’s reality. At the time he was still a journalist with One TV... where he tirelessly promoted the line of Labour leader Alfred Sant, who spent a good 10 years warning us of all the cataclysmic consequences we would experience if (‘Alla hares qatt’) we ever joined the EU.

In the general scale of things, that prophecy was actually much more inaccurate than Busuttil’s. Remember the endless list of companies, factories and even hairdressers that would supposedly be run out of business altogether within a few months of accession? Well, it’s been business to happen. 

Again, if anything it worked out the other way. This much was admitted by Muscat himself, who last year even said it would be ‘suicidal’ for Malta to do a ‘Brexit’ and leave the EU. Yup, that’s right: the same man who spent years equating ‘EU accession’ with ‘instant Armageddon’, now takes the credit for an economic turn-around that is itself largely the result of Malta’s EU membership. 

Hard to imagine a more completely off-target prediction than that, really. In fact, the only serious contender I can think of is Busuttil’s ‘bail-out’ blooper. Makes you wonder how anyone with any sense at all would ever trust the foresight of two men who somehow managed to get things so utterly, hopelessly and irretrievably wrong.

And you don’t even need the benefit of hindsight in either case, by the way: the failure of those predictions was itself easily predictable at the time they were made. Both were classic examples of politicians telling us things we could all see were just, ultimately,  wishful thinking. Anyone basing their own predictions on real, existing economic indicators would (and many did) have foretold the opposite on both occasions.

So my general advice to Busuttil and Muscat would be: stick to the day-job for now, and leave the business of looking into the seeds of time to the people who can actually read them. (That is to say, nobody, in any literal sense). 

Otherwise, I predict they will both end up looking more foolish than they already look today. If that will even be at all possible in a future no one can predict....