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| Royal recession-killer |
| Martin Hutchinson / May 02, 2011, 00:54 IST |
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Royal wedding: The last two top-tier royal weddings provided lifts to consumer and business spirits that arguably helped pull Britain out of recessions and produced some growth. America long ago traded the monarchy for a republic, but a similar tonic would do it some good - it's a lot cheaper and less damaging than fiscal and monetary stimulus.
The expected out-of-pocket cost of William Windsor's wedding to Catherine Middleton is around $82 million (£50 million). That's two-thirds the real cost of the 1981 wedding between Charles, the Prince of Wales, and Diana Spencer, though estimates for the cost to the UK economy of their son's wedding have ranged as high as $8 billion, because of the additional holidays involved.
However, with the royal family retaining 63 per cent support in recent polls, down over the last generation but still dominant, the impact of loyal and enthusiastic consumers and businesses increasing economic activity should also be taken into consideration. At least, that's one conclusion to be drawn, albeit unscientifically, from historical precedent.
The 1947 wedding of the current queen to Philip Mountbatten, as with Prince Charles' wedding, occurred in the midst of deep economic depression. In the first instance, postwar disruption and acute foreign exchange shortages had caused a 1.9 per cent annual decline over the previous two years.
And, 1981 followed two years in which the economy shrank by 1.6 per cent. Yet, after both weddings, output rose at over 3 per cent annually for several years, with both periods economically among Britain's strongest ever.
Intellectuals, republicans and skeptics will scoff at any possible causation between such ceremonial flummery and the hard business of economic output.
Yet, as Walter Bagehot wrote of the monarchy: “We must not let in daylight upon magic.” With a substantial majority of 60 million people emotionally uplifted by the royal wedding, it should not be surprising if positive economic effects are felt.
President Barack Obama and Fed Chairman Ben Bernanke have devoted trillions of dollars to their attempts to lift the US economy from the doldrums, so far without great success.
If they see the economic stimulus of a royal wedding successful across the Atlantic for a third time, Americans may come to regret giving George III the boot after all.
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