A royal wedding would do U.S. economy some good
-- The author is a Reuters Breakingviews columnist. The opinions expressed are his own --
By Martin Hutchinson
WASHINGTON (Reuters Breakingviews) - 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 pounds). 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 percent 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 percent annual decline over the previous 2 years. And 1981 followed two years in which the economy shrank by 1.6 percent. Yet after both weddings, output rose at over 3 percent 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 U.S. 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.
-- British GDP declined at an annual rate of 1.9 percent in 1945-47. After the royal wedding of Princess Elizabeth and Lieutenant Philip Mountbatten on Nov. 20, 1947, GDP increased at an annual rate of 3.1 percent in 1947-51.
-- British GDP declined at an annual rate of 1.6 percent in 1979-81. After the marriage of Charles, Prince of Wales, and Lady Diana Spencer on July 29, 1981, it expanded at an annual rate of 3.5 percent in 1981-87.
-- British GDP declined at an annual rate of 1.3 percent in 2007-10. Prince William and Catherine Middleton were married in Westminster Abbey on April 29.
-- The three weddings are the only royal weddings since 1900 where one participant was in the direct line of succession to the crown; the previous two such events were the 1893 wedding of the future George V to Princess Mary of Teck and the 1863 wedding of the future Edward VII to Princess Alexandra of Denmark.
(Editing by Rob Cox and Martin Langfield)
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DAVOS, Switzerland - Central banks have done their best to rescue the world economy by printing money and politicians must now act fast to enact structural reforms and pro-investment policies to boost growth, central bankers said on Saturday.
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