AS a veteran of four recessions, which he studied as both an academic and from inside the Treasury, Lord Burns knows a thing or two about economic crises.
But the Santander chairman, who was in the North East yesterday to officially open the new Newcastle University Business School building, admitted that even he is not brave enough to predict when the current downturn will end.
Lord Burns, who grew up in County Durham before working at London Business School and then in the Treasury from 1976 to 1998, performed the ceremony before delivering a keynote address on what we can learn from past recessions.
The economist acknowledged that the current downturn had some common factors with previous recessions, but the picture today was complicated by the seizing up of credit markets and the crisis facing the banking sector.
Recalling earlier recessions and the government measures taken to deal with rapidly rising inflation, he admitted that the current round of spending cuts “appear modest in comparison”.
“The misery of the 1970s puts today into context,” he said.
But Lord Burns, who is also chairman of Channel Four, said one common feature across all the recessions he has experienced was the tendency to underestimate the ability of the economy to recover. “There is always far too much pessimism,” he said.
The continued growth of many international markets and the emergence of a new middle class in countries such as China, India and Brazil should also encourage export-focused businesses, he added.
“It is not the strongest businesses that will survive, but those that are able to adapt,” he said.