Winner of the New Statesman SPERI Prize in Political Economy 2016


Thursday, 27 January 2022

The damage caused by Boris Johnson and Brexit goes way beyond his office parties

 

This post is not about the personality of Boris Johnson (for an excellent account of his rise and fall, see Peter Jukes here). Instead it is about whether things will change much with any successor. The general theme of this post is that the damage to the Conservative party caused by both Brexit and Johnson has been so great that any successor will be very restricted in the changes they can make even if they were minded to make changes.


In short, if Johnson goes, can the Conservative party mend itself? To assess this, we first need to outline the damage he has done, the damage Brexit has done and whether there are any silver linings. The next step is to speculate on whether any of the likely successors to Johnson might undo any or all of this damage.


Brexit has done obvious damage to the UK economy. Johnson’s attitude to Brexit has also damaged the Conservative party in a number of ways. To understand this, you first have to recognise that Brexit was always a foolhardy project. As such, it was good at sorting between those who were capable and sensible in the party, and those who were not. Johnson took the attitude of Brexit at any cost, and without compromise of any kind. That naturally alienated those in the party who were prepared to accept the referendum verdict, but not Johnson’s kind of Brexit.


His response to some of these more sensible party members was to throw them out of the party before the General Election, and suspend parliament. Candidates at the General Election had to take a Brexit loyalty oath to Johnson’s kind of Brexit. Once elected, it didn’t take long for Johnson to appoint a cabinet that was notable not for its political weight or good judgement, but to blind loyalty to Johnson, most perfectly willing to do as they were told.


To be fair to Johnson, this effect whereby Brexit acted as a selection device to find the worst candidate and give them the job, was also working at a constituency level, as constituency members tended to be very pro-Brexit. So the parliamentary party itself was gradually electing MPs whose views largely mirrored the right wing press, and who had little time for values like doing the best for the economy, respecting the truth, integrity or following the science.


The two taken together have produced a large group of MPs (perhaps half) that you can almost count on not to make sound judgements in many areas. How can I make such a sweeping statement? I’m afraid Covid has provided an excellent test of good judgement. Do you follow the science in trying to reduce the amount of hospitalisations, deaths and long covid, or do you fetishise not wearing a mask and wanting to get rid of social protections as quickly as possible, whatever the cost. The fact that half of Tory MPs appear to be in the second group gives me all the justification I need to write the first sentence of this paragraph.


Consider Johnson himself. Totally unsuited to becoming Prime Minister, as anyone could see given his past record and how he works. Yet Conservative MPs appointed him because he could win them an election, and now seem to find it hard to let him go. MPs who complain about an ID society when it comes to vaccine mandates, but are happy to make people require ID to vote because it helps them stay in power. Who laud liberalism for themselves while trying to criminalise demonstrations. Who think Lord Frost is an effective operator, and the Europeans will crumble in the face of obstinacy. Who seemed to adopt Johnson’s constant lying all too easily.


Elevation (to MP) and promotion based on a loyalty test (to an idea or to party leaders) rather than because of ability is a constant danger in any government. Unfortunately the Conservative party and this government have taken this to its extreme, because of both Brexit and Johnson. The result is that any new leader after Johnson, even if they had the will to do so, would find it hard to break with the Johnson/Brexit legacy.


If there is a silver lining under Johnson, it is the first hint of a break with the anti-public spending/low tax ethos of the post-Thatcher era of Conservatism. This has been only a hint. Extra money for the NHS paid for by, in effect, a tax hike was largely forced by the growing demand and need for health spending. There has been a partial reversal of earlier austerity in both education and police spending, but the squeeze on justice, local authorities and elsewhere has continued. Levelling up has not happened yet, and some would argue we have had levelling down so far.


Yet this silver lining has been achieved with much complaint for many Tory MPs, many of whom remain wedded to earlier ideas and a neoliberal ideology. Not only will any successor to Johnson have to promise to continue to ignore the science about the pandemic, they will also promise to return to tax cutting ways. This is particularly true if Sunak is Johnson’s successor. (Sunak's likely popularity as leader is considered by Ben Walker here.)


Even if an alternative new leader attempts to avoid returning to the Conservatives comfort zone of low taxes, getting the state (and unions) off the back of firms and so on, they have to contend with the huge obstacle of half the parliamentary party essentially embodying the political philosophy of the right wing press, as well as having to deal with that press directly. The two combined make it almost impossible for a Conservative government to rejuvenate an economy that has become increasingly moribund over time, and not only because of Brexit.


It is moribund because what firms involved in adding value to society rather than just rent seeking need is a partnership with the state, both directly and indirectly in providing the kind of society that allows individuals who might contribute to firm growth to have both the necessary knowledge and imagination to do that well. This is the opposite of what austerity achieves and what a low tax economy and diminished state accomplish. The initial economic dynamism of the Thatcher period (more apparent than real) was achieved by a one-off destruction of older ways of doing things, but also off the back of largely squandering North Sea Oil.


Johnson’s populism may have brought a partial and modest reversal of austerity, but it has also brought something new and extremely damaging to good government. This is the introduction of what is essentially rule by a plutocracy. The leaders group provide the funds for the party to win elections, and in return either help direct the overall political project or get large rewards for themselves or their businesses. The VIP lane for protection equipment for the pandemic was just one manifestation of this way of doing business and the business of government.


The emphasis on who you know rather than what you can do, of rent seeking rather than adding value, is entirely destructive to general prosperity or a fair society. It can only survive as a political force if the government creates and fosters divisions within society, either us versus them (where us are called ‘the people’ by the populist politicians and them are called woke), or ‘the people’ against various minorities or foreigners who are constantly denigrated.


I suspect all a successor to Johnson can achieve is to dismantle this plutocracy. No more regular meetings with the leaders group, and preferably no leaders group at all. An end to constant brinkmanship with Europe, and making some attempt to soften the edges of Johnson’s hard Brexit for the benefit of both our firms and consumers. Some movement towards true one nation Conservatism, and away from constant culture war.


This is, I think, the limit of what progress we can realistically hope for once Johnson has gone. The consequences of Brexit in terms of the quality of the parliamentary party, and the consequences of Johnson in the form of the current cabinet and its modus operandi, will make anything more than this very hard to do. Of course hoping does nothing to ensure that even this it will happen, but recognising the limits any new leader will face does make clear how damaging Brexit has been to the Conservative party.







Thursday, 20 January 2022

The BBC’s crisis over scientific fact

 

The BBC is under attack, and there is no doubt we should support it with all the energy we can. Of course there have been many failings in its attempts to appease a threatening government, but that can change. It is watched by so many people as a vital means to present news unfiltered by a mainly right wing press in the UK, and in the rest of the world too. Just imagine if the BBC had not shown the PMs press secretary footage, so the right wing press could have also kept quiet. Like the NHS, it is a unique British institution that admired around the world. But our support cannot be uncritical.


David Jordan is head of editorial policy at the BBC. Last week he testified in front of the House of Lords Communications Committee. He said this:

“It’s critical to the BBC that we represent all points of view and give them due weight.”

He went on

“Flat-earthers are not going to get as much space as people who believe the Earth is round,” he said. “But very occasionally it might be appropriate to interview a flat-earther. And if a lot of people believed in flat Earth we’d need to address it more.”

The model is clearly that the amount of airtime a group should get should reflect the number of people who hold that view.


The consequences of such a policy are stark. Rather than flat-earthers, let’s look at anti-vaxxers. Under this policy we should regularly expect to see them occasionally putting their case on TV. Similarly for all kinds of quack medicine, some of which could also be harmful. Are we to hear from those who think the moon landings were faked, or you can get Covid from 5G? Those who deny the existence of man-made climate are another group. Scientists had worked very hard to convince the BBC not to hold debates containing climate deniers, or interview climate deniers, but that now seems to no avail. Climate deniers will get airtime, the amount depends on how many there are of them.


There are three fundamental problems with that approach. The first is how the BBC judges what proportion of the population hold a particular view and regulate the amount of airtime they get. Does all airtime count equally? To do this properly would require resources the BBC does not have and even when it does are better used elsewhere. Indeed the one job the BBC should be doing, which is to ensure the opposition gets reasonable coverage, the BBC fails to do (see Justin Lewis here). Nor was the policy followed when the issue of austerity was discussed.


A danger is that in practice ‘a lot of people’ will be replaced by either those who make the loudest noise, or more probably those people who have political connections or support. This is what happened in the 2016 referendum, where those who thought Brexit would improve the economy (often within years) were given equal airtime to those who thought otherwise. (the evidence is clear who turned out to be right.). Individual producers decide who will appear on their programmes, and that is invariably based on those who make the loudest noise, or more probably those people who have political connections or support.


A second problem is beliefs such as racism and prejudice generally. The proportion of the population that is racist is quite high, but you will not see them given proportionate coverage on the BBC. So why isn’t the BBC representing this part of the audience? I suspect it over compensates for this ‘failure’ (in their eyes) by giving excessive time to political parties that represent views that appeal to racists. They must implicitly be qualifying their idea that coverage should be proportional to what the audience believes to exclude racist ideas like holocaust denial , so why not qualify it to also generally exclude those whose ideas are untrue.


The third problem is that the truth doesn’t get a look in. As Patrick Howse points out, the BBC says that it is “committed to covering all subjects with due impartiality. This does not mean denying facts nor scientific consensus, and we will always make these clear to audiences. However, there are times when it’s editorially appropriate to hear from, examine, and challenge people who have dissenting voices”. As my last post showed, the ability of everyone who might interview ‘dissenting voices’ to know the science sufficiently well to combat everything an anti-vaxxer (say) states in argument or as fact in an interview is zero.


Even holding debates between scientists and ‘dissenters’ is problematic, and this is shown particularly with climate change. Deniers are snake-oil salesmen, with the emphasis on salesmen, while scientists are not. Invariably the climate deniers sound more impressive to those with no knowledge, partly because there is no uncertainty in their beliefs, while scientists are always questioning their own.. Whether people believe an idea should not depend on the personality of its proponents, but on the evidence that backs it up.


Eryn Newman et al in the Conversation raise a number of problems with the idea that as long as the interviewer mentions what is true (which they rarely do), that stays in the viewer’s mind. Experiments show people forget truth statements easily, while still remembering the untrue claim. To quote “Cognitive science research shows people are biased to believe a claim if they have seen it before. Even seeing it once or twice may be enough to make the claim more credible. People tend to believe simple things over complex things. This is why austerity was so appealing to people at the time they were reducing their borrowing - it made sense to them.


For this reason it is silly to say ‘let the viewer decide’ what to believe. Most people do not have the time or inclination to do their own research about what is right, and as cognitive science shows the truth of an idea is often forgotten when the idea itself is not. The duty of the BBC is to inform, and it is failing to do that by giving ‘dissenters’ airtime.


All this matters so much because in society there is a crisis over scientific fact, as the coronavirus pandemic has shown all too well. The BBC needs to be on the side of science, and at the moment their policy actively seeks to undermine scientific belief.








Tuesday, 11 January 2022

The broadcast media - knowledge disconnect


Today we are in the middle of an Omicron wave, but I want to go back to mid-November. The BBC News at Ten on 15th November 2021 ran as its second item the extension of booster jabs to over 40s (if people could get them). It showed PM Johnson talking about storm clouds of a new COVID wave gathering in Europe, and we saw him say that this might ‘wash up’ in the UK. Nothing much more was said, besides the ritual reporting of UK COVID numbers.


What information did that segment convey to viewers who were not otherwise informed (and most viewers would not be otherwise informed)  about COVID numbers in the UK and Europe? It suggested cases are low and stable in the UK, but rising in Europe, and that is exactly the impression he wanted to give. Here is a chart of cases in the big three EU countries and our immediate neighbours close to the time he spoke.





Since mid-August, UK cases were higher in the UK than all these countries, and in most cases a lot higher. It’s not because we test more, because our deaths have also been higher. COVID was rising in most of the countries shown on this chart, including the UK. Only three of these ten non-UK countries at that time had cases above the UK. 


So the idea that a European wave was about to hit a relatively COVID free UK is far from reality. But the BBC did not even try to correct the impression given by Johnson. So why did the BBC broadcast the clip from the PM? It contained misleading information rather than any useful information. Wouldn’t viewers have been better off with a short piece from its own health reporter or some outside expert about the potential ‘COVID threat from Europe’? The BBC’s mission is to inform, explain and entertain. Which category did the clip from Johnson fit into? 


Let’s move to the most important issue of our time, climate change. COP26 was a golden opportunity for the media to inform and educate the public in its news reporting on the summit. As this article by two climate experts notes, such reporting was the exception rather than the rule. The rule was reporting the spin put out by politicians, like Johnson, who wanted to suggest it was a success. We got Johnson’s strange football analogies which, to be frank, tells its viewers nothing. 


To claim that to do the detail is impossible inside the constraints of a 30 minute news programme is just false. Look at this short briefing in the excellent Tortoise newsletter that evaluates the summit in terms of likely degrees of global warming. Journalists cannot complain about lack of time when so much airtime is taken up by VoxPops. The problem will continue in the future. Grand promises and targets set by politicians will get headlines, but the individual measures needed to meet those targets will most of the time be ignored. Reports from the Committee on Climate Change should get headline billing, but they don’t.


This is the context to view the failures in economics reporting which played a major role both in popularising the deficit deceit behind austerity and played a decisive role in muddying the economic waters in the Brexit referendum vote. These are primarily not the result of some peculiar problem with economics (although those exist [1]). Just as with COVID and climate change, macroeconomics in particular is portrayed in a way that has little to do with how most academics think.   


The idea that news broadcasting does very little to explain what is going on, but instead consists of surface trivia, is hardly new. To my knowledge it was first put forward by Peter Jay and John Birt, who wrote “There is a bias in television journalism. Not against any particular party or point of view – it is a bias against understanding.” As I wrote, their attempt to get more expertise into broadcasting largely failed, even though one of them became Director General.


The reasons it failed, in my view, are twofold. First, there are some news ‘values’ that are so ingrained in journalism that fight against it. The biggest of these is immediacy: the need to be first with news, and the associated view that anything that happened more than a few days ago is ‘old news’. 24 hour TV News has not helped here. Ironically these values are internal, and do not reflect what people want. Viewers always respond better to news items that tell a story, and explanations can be made into stories.


Second, which particularly influences the BBC, is national politicians. Politicians determine how much money the BBC will get, and with this current government its very existence. As a result, news reporting in particular has to make politicians happy, and they are happy when they are on TV or when Westminster gossip is discussed. This helps explain the incredible visibility and influence of the broadcaster companies’ political reporters, and the more subservient role played by subject journalists. Channel 4 News, which until now has suffered less from these pressures, does more than other networks to inform its audience.


This is why expert knowledge plays second fiddle to the views of politicians. Experts are bumped from programs they are invited on to be replaced by politicians (as I and others have experienced), but never the other way around. Now you may say rightly so, because we need to see our elected representatives, but we also spend a lot of money on academic research, so shouldn’t academic expertise be heard too? 


Journalism will not change in a hurry, but that doesn’t mean academics cannot do things to improve matters. Having individual academics, of contrasting views, battle things out in programmes like Newsnight tells viewers little. But often there is a clear consensus in economics, medicine and climate change, and academics need to get much better at communicating that consensus. 


The first way to do that is to have strong representative institutions. The second is that these institutions need to have good ways of knowing what the academic consensus is. That may not be necessary most of the time in physics, but it is required when it comes to when to lockdown in the pre-vaccine stages of a pandemic, how much politicians are meeting their own climate targets, and whether government deficits matter in recessions. 


Once in place, these institutions need to be bold in getting that consensus across. Let me use a concrete example from the past. After the referendum, the Royal Economic Society complained about the way views on the economic effects of Brexit had been presented as two opposing views, when in reality there was an overwhelming consensus that it would be bad for the economy (a consensus that proved correct). In an exchange of letters the BBC defended their position, and the RES took no further action.


What should have happened is that, once it was obvious how the BBC would treat the economics issues, the RES should have written before the referendum and made that letter public. Rather than wait for the Observer to do a poll of its members, the RES should have already done that poll. If nothing changed, the RES should have commissioned independent research into BBC coverage as ammunition. 


It was this kind of pressure that first got the BBC to stop putting climate change scientists against deniers in debates. (Although there remain occasional lapses, the claims from deniers that there is no ‘balance’ largely goes unheeded among the broadcasters.) We need to make it impossible for journalists to claim that they don’t know what the consensus is, and we need to put institutional pressure on the broadcasters when they let politicians distort academic knowledge.

     

  

[1] There are two problems peculiar to macroeconomics. The first is that too many people among politicians and broadcasters already think they know how the economy works. The second is the excessive reliance on opinion from City economists. 












       


Tuesday, 4 January 2022

The evidence, and the consensus among economists, against Tory fiscal policy has grown over time

 

This is an old theme with two new pieces of information. The first comes from a survey of US economists, the majority of whom are academics (HT Jonathan Portes). As UK macro very much follows US macro, the numbers for UK economists are likely to be similar. This survey covers many issues, but I want to focus on three questions in particular.


The first is as follows: “Fiscal policy (e.g. tax cut and/or expenditure increase) has a significant stimulative impact on a less than fully employed economy”. Here economists in 2021 overwhelmingly agree with this statement. The ratio of agree to disagree is 94/06. This consensus is greater than similar surveys in 2011 and 2000, but only slightly so. This is hardly surprising, as it is what we teach undergraduates and graduates. The influence of those macroeconomists based around Chicago who thought otherwise was always marginal.


This question alone is insufficient to imply that focusing fiscal actions on the deficit rather than assisting a recovery was wrong. It just says that an austerity policy will tend to reduce output, but that may be a price worth paying to reduce the deficit. This bring us to a second question: “A large federal budget deficit has an adverse impact on the economy.” I think this is a weak question, because it does not state why the budget deficit exists. So while only 20% of economists would unambiguously agree with this, that rises to 42% if they could add a proviso. As we are not told what that proviso was, the question is not very meaningful.


The most interesting question is a third, which states “Management of the business cycle should be left to the Federal Reserve; activist fiscal policies should be avoided.” This was the line taken by Osborne, and (pandemic support aside) by Sunak. Only a third of economists agree, with two thirds disagreeing. That is not a consensus, but a clear majority of US economists disagree with the line taken by recent Conservative Chancellors.


The reason why that proposition is wrong, of course, is that when interest rates are stuck at their lower bound fiscal policy is much more effective at controlling the economy than unconventional monetary policy. The majority of economists holding this view was much slimmer in 2011, and in 2000 the majority is reversed, as few people had studied Japan and were therefore unaware that the lower bound problem was very real.


If fiscal stimulus was the appropriate policy to boost a recovery from recession, you would expect the US to be recovering a lot better than the UK from the pandemic, because the US did implement a large fiscal stimulus while the UK has instead focused on deficit targets. Our second new piece of information is the revised third quarter national accounts, and that is exactly what they show. After a disappointing third quarter’s growth in the UK, GDP remains behind its pre-pandemic level (1.5%) by about the same amount as US GDP is already ahead. Monthly GDP figures for October tell a similar story. Here is the historical context from the FT.




One of the ironies of Boris Johnson’s recent political weakness is that the 50% or thereabouts of Tory MPs who are ego-libertarians now strongly influence potential successors to Johnson and therefore much of the Cabinet. That in turn has ensured that mild measures to help slow the spread of Omicron are shouted down, which will not only increase hospitalisations and deaths but will also cause considerable damage to parts of the economy.


It therefore seems unlikely that the UK will pass the milestone of GDP exceeding pre-pandemic levels until well into 2022. The squeeze in living standards is likely to be much worse, because of rising inflation, reduced benefits and higher taxes. Yet all this seems unlikely to shift public views that the Conservatives are better at running the economy. Ironically Labour’s low ratings on this issue date back to the Global Financial Crisis (GFC), and the perception carefully created that Labour were responsible for austerity.


Which only emphasises the gap between the majority view of experts (that a recession requires fiscal stimulus not austerity) and public opinion. Both the IFS and NIESR favoured fiscal stimulus in the Autumn, but this was hardly noted. The different approach taken by the US and UK fiscal policy makers in assisting the pandemic recovery should have been a teaching moment, but this too is barely discussed beyond economists. In economics, as in epidemiology and climate science, the Tory party has the ability to dominate public discourse, partly because expert knowledge is undervalued in the public realm.

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Monday, 20 December 2021

The Ego-libertarian party

 

It is easy to argue against measures designed to stop the spread of the Omicron COVID variant before it has become dominant, as 100 Tory MPs did last Tuesday to defy Johnson. But that is exactly when you need measures to be put in place to protect the public. These MPs have been a constant drag on Johnson during the pandemic, and one reason why he has not been following the advice of his scientists.


There have always been the odd nutters among Tory MPs, but they have never numbered 100. It represents nearly half of all Tory backbenchers (Tory MPs who are not part of the payroll vote). Worse still is that they have, most of the time, the support of the right wing press. Both are way out of line with public opinion. There is a reasonable argument that vaccine passports are a gateway to further restrictions on civil liberties, but that argument cannot be made by the same MPs who are at the forefront of restricting civil liberties for those they don’t like.


They call themselves libertarian, but giving the police the right to arrest demonstrators because they are being too noisy is not libertarian. They call themselves libertarian, but making it illegal to rescue refugees from drowning is not libertarian. They call themselves libertarian, but allowing 6 million British citizens to be deported without notice at the will of Priti Patel is not libertarian. They call themselves libertarian, yet have introduced for general elections gerrymandering of the most blatant kind. I could fill the whole post with sentences like this, so how dare people call this government and its leader libertarian?


But why do they think they are libertarian? The answer is that they do believe in complete liberty and lack of interference from the state - for themselves. I have used the term ego-libertarian, which I got from Robert Saunders (@redhistorian), because it is almost right and sounds good. It is not completely right because it is quite possible that ego-libertarians do not just want liberties for themselves, but just for people like them. Not their class, unless their class is limited to parts of finance. Perhaps liberty for people who can help them, but not for people who could threaten their own liberty, get in the way or are casualties of their fanciful schemes. As Kenan Malik notes, in the pre-civil war US the loudest cries for liberty came from the slave owners. Indeed the Conservative party has become in so many ways a copy of the US Republican party.


So arresting demonstrators who make a noise is fine, because they or people like them would not be demonstrating. Nor would they be rescuing refugees, and they will not be deported by Priti Patel. They after all are the Brexiters who knew the UK economy would suffer but also knew they would not be suffering. These may be the Brexiters who made sure they had EU citizenship, or a second home in an EU country, or moved their company to inside the EU.


There are plenty of selfish people in the world, but having the governing party making crucial decisions in a pandemic for their own selfish interest, rather than their idea of what the national interest is, represents a serious problem for our NHS. These MPs, like the newspapers that push a similar line, are completely out of touch with Conservative voters on these issues.


On Wednesday there was a press conference where the Chief Medical Officer (CMO) said quite clearly that people need to avoid social contacts where possible to try and prevent the NHS being overwhelmed. Johnson at the same event did not go that far. The CMO Chris Whitty was immediately criticised by two members of the ego-libertarian wing of the Tory party: here and here. That in turn led to this headline in the Mail.


For these ego-libertarian MPs, not interfering with the economy is always more important than saving lives. They don’t say that out loud, which is why they turn on a scientist when he advises withdrawal from parts of the economy in order to save lives. For these MPs, following their selfish ideology always trumps science. They have no time for experts if experts are advising them to do something they dislike. For the same reason their commitment to preventing climate change, if it is there at all, is skin deep.


Why ego-libertarian rather than neoliberal? Neoliberalism is not profoundly irrational. It would see that an environment where COVID was rampant would be very damaging to key parts of the economy, as individuals curtail social consumption to avoid catching the virus. Ego-libertarianism is irrational and myopic, seeing only that masks are a nuisance to have to wear, see lockdowns only in terms of the direct impact on business. Right wing newspapers see lockdowns as people buying less newspapers. Their thinking does not go beyond the here and now. Neoliberalism is at heart about giving power to corporations. Ego-libertarians want power for themselves, their friends and those who give them money and/or win them elections.


Boris Johnson is also naturally an ego-libertarian. His original strategy of herd immunity, which is basically doing nothing to get in the way of the virus beyond vaccination, is what ego-libertarians push for. He was persuaded to change that because it would have led to the health service being overrun, and he thought that would be devastating to his chances of continuing to win elections. As a result, the state of the health service, rather than deaths or long COVID, has always been the critical trigger for Johnson to take action.


Hence ‘freedom day’ in July, where all measures designed to reduce cases were abandoned. This was done because Johnson was confident that, even though 1,000 or more people would die every week from COVID, the health service could just about cope. Thus at the end of the day his ego-libertarian ideology was not compromised, because it included his wish to stay Prime Minister. Equally for ego-libertarians who are backbenchers this consideration provides no constraint on their aversion to seeing the economy inhibited in any way.


SAGE, the main committee of experts advising the government, believes measures designed to curtail social interaction are required in response to Omicron. They recommend a ‘circuit-breaker’ that ends social contact between most households indoors and ends indoor hospitality like going to a pub. This, according to both SAGE and independent-SAGE, is vital to ensure hospitals already at their limit do not descend into chaos.


For this reason Johnson will probably follow their advice to some extent, although much too late. This in turn may seal his fate, with the ego-libertarian half of his parliamentary party vowing to be rid of him once this Omicron wave dies down. That in turn means that successful candidates to replace Johnson will either have to be, or pretend to be, ego-libertarians who promise to take even less notice of experts than Johnson did.


I hope, despite everything, you have a good Christmas and best wishes for 2022







Monday, 13 December 2021

Cutting through

 

Legislation going through parliament at the moment is the most regressive and repressive that I can remember from a social liberal’s point of view. The right to peaceful protest without being arrested effectively ended. Criminalising refugees, and those in lifeboats saving them in the channel. Those born overseas or dual nationals will soon be able to be deported at the will of Priti Patel, without notice, which affects 6 million UK citizens. The government also wants to have the ability to override any legal decision it doesn’t like.


With a new COVID variant about to lead to an explosion of UK cases, the government is once again being totally inept at preparing for it. Christmas parties are absolutely fine, says Boris Johnson, while the education secretary says he thinks masks in schools may harm learning (which is nonsense - what harms learning is being away from school after catching COVID). This government continues to do nothing about ventilation in schools.


But it wasn’t any of these things that shifted the polls dramatically in favour of Labour over the last week. Instead it was the year old video tape of the then press secretary to the Prime Minister nervously giggling about a recent Christmas party, a party that a year later the Prime Minister was denying the existence of to the Commons.


It’s not hard to see why this footage had such a big impact. People remember the hardships they suffered following the government’s rules last year as the Alpha wave gathered steam, and some have relatives who died from that wave. Christmas parties were banned in London, and the idea that those in No.10 were ignoring the restrictions they themselves had imposed seemed outrageous (as it was). Seeing the press secretary laughing about how they would try and pretend it hadn’t happened illustrated the gulf between the people suffering (and people dying alone) and the apparent indifference to rule breaking in No.10.


It is also interesting that, like the Patterson case I wrote about here, it was the broadcast media that took the lead in making most people aware of this rather than the right wing press. Unlike Patterson it took the Mail (under a new editor) a day to put it on the front page, and then as part of the right wing newspapers’ ongoing moan about any COVID rules at all. In contrast the Sun decided it was a non-story.


Objectively, the issue of a Christmas party is trivial compared to the many tens of thousands of COVID deaths caused by Johnson’s ineptitude at handling the pandemic. But cut through about Conservative sins depends on what appears on the 6 or 10 o’clock news. You will not find anywhere in those news programmes a clear statement that Johnson is responsible for so many deaths. Nor, crucially, will you find much about the issues I listed in my first paragraph. Because the news programmes were not able to ‘balance’ the pictures of Johnson’s press secretary, and because partygate was an insult to everyone, that issue cut through.


Of course everyone reading this blog does not need the 10 o’clock news to alert them to what Johnson is doing. You read a newspaper like the Guardian, Mirror or Financial Times, and probably have many other sources of information. But you are in the minority among voters. Most Tory voters just have these peak time News programmes (probably the BBC) and their right wing newspaper which heavily filters the news. They needed proof that Johnson and those working for him believe they can do what they like, and now they have it.


This Christmas party episode is a perfect example of something I talked about here, The problem for figures like Trump and Johnson is that they get tripped up by their own excesses (in the eyes of the public) or the excesses they encourage in others. Trump encouraged a coup, and his supporters obliged. Johnson encouraged an attitude among those working at No.10 that they, like himself, didn’t need to follow the rules they were proscribing for the public, and they went ahead with parties that others got fined for holding.


Since Johnson became Prime Minister, he and those around him have behaved in an outrageous manner, and have survived only through Johnson’s charm and media bias. The government couldn’t help itself by allowing friends to profit from the PPE crisis its predecessors had created, and from the test and trace programme. Johnson couldn’t help himself regularly putting donors in the Lords, and keeping ministers in place who were found to have broken the ministerial code. It was very likely that one day something similar would break through the shield created by half the press and a timid BBC, such that the public would finally see what Johnson and his entourage were like.


Will this be a flash in the pan? In the short term certainly not. Johnson still hasn’t admitted one party took place, let alone the half dozen or more that happened. The more Johnson sacrifices some former employees to save his own skin, he risks creating individuals who will find the odd photograph to leak to the media. [This was written last Friday and Saturday, and by Sunday it had already happened.] Into the medium term, the task for Labour is to keep reminding voters how they felt when seeing that footage of the Prime Minister’s press secretary. Unlike the Conservatives, they will not have the help of half the media doing it for him.


The problem the Conservatives have beyond the next month is that this episode, along with continuing corruption stories, may have permanently tarnished Johnson’s image among the electorate. With plenty of scandal still in play, this will not go away. Johnson’s charm that took in a large number of the electorate may no longer work its magic. In addition, a broadcast media may be less deferential to a leader whose days seem numbered.


More and more Tory MPs may come to think that their best bet of getting a majority in the next election is to have a new leader who comes with a honeymoon period, and combine that with an early election. After all, many of them only voted for Johnson as leader because in 2019 they were in a Brexit/Farage sized hole and only he could get them out of it. His job done, he could easily be cast aside and everything bad that subsequently comes to the public’s attention can be laid at his door, as Johnson himself once did to those that came before him.


If partygate does prove to be the downfall of Johnson, I think there will be some poetic justice there. Of all the bad things that Johnson has done in such a short time, his complete failure over the pandemic is the worst in terms of lives lost. Not many national leaders are responsible for allowing nearly 100,000 of their own citizens to die outside wartime, and those that did are not remembered fondly. From embracing herd immunity to delayed lockdowns to ‘freedom day’, he has refused to learn from his mistakes or his scientific advisors because of his lifelong ego-libertarian views. Alas too many of his own MPs share similar views, so we will not return to sanity until some other group of parties govern this country.




Tuesday, 7 December 2021

They lie about everything else, so why is the economy different?

 

“All Covid rules have been followed” says Johnson when questioned on the Christmas and other lockdown parties that were held at No.10 last year, a mantra repeated by every Conservative MP. Just one problem - parties were not allowed at this time, and organisers were fined £10,000 if they were caught by the police holding parties. So Johnson and every Conservative MP are lying about this. Does this worry those MPs? I doubt it, as it is what they do all the time.


At the end of November the Prime Minister announced some new measures in anticipation of the new Omicron variant, saying these measures were “precautionary”. Does that mean Johnson is taking a precautionary approach? Of course not. SAGE itself recommended working from home and less social mixing. Not the Prime Minister, who thinks we should have a normal Christmas. The health minister Javid even says ‘cautious’ snogging is OK. This is a government that says it’s following the science when it is doing anything but. So what the government is doing is certainly not precautionary. The evidence we have so far suggests this variant will grow very rapidly, and although there may be less deaths than with Delta the NHS is going to be even more overwhelmed than it currently is


The government says it is leveling up. It is not clear what they mean by this, but it is generally understood that this is about helping the poorer parts of England. One of the best things you can do to improve productivity in the North is to improve its transport system, which includes fast links between the major towns and to London. So cancelling HS2 going to Leeds and the Northern Powerhouse Rail line because of some arbitrary Treasury rule limiting public investment is a blow to leveling up. So is changing the social care rules so families with a little wealth will have to pay a much larger proportion than wealthy families. So is funding social care through national insurance increases rather than higher income tax. So is cutting council spending for the most deprived areas by far more than elsewhere. So is directing regeneration funds away from deprived towns and to those that have a Tory MP. It seems leveling up actually means leveling (further) down.


I used to have a friend who moved from academia to working for a City firm giving economic advice. At first he was agonised that all his predictions seemed to go wrong, but then a colleague told him it was fine, he was a good negative predictor. Which meant if he thought X would happen, the guys on the trading floor would know X was unlikely to happen. I think we can take government statements in the same way. If they say they are doing X, they are actually not doing X. My friend got better with time, but this government shows no signs of doing so. 


The same applies to the economy. When the government says they have established a strong and stable economy, that is exactly what they have not done. As I showed here, before the Global Financial Crisis (GFC) the economy was much stronger under a Labour government than it has been since the GFC under Conservative Chancellors. Some of that may be bad luck (the trend rate of growth has been falling in most G7 countries), but the disasters of austerity and Brexit are entirely down to the governments that enacted them.


The harm caused by Brexit is very clear in this chart from the IMF.




On the horizontal axis is the deviation of GDP from its pre-pandemic trend in the second quarter of 2021. The UK is the worst of all the countries the IMF looked at. On the vertical axis is the deviation of inflation from its pre crisis trend in the third quarter. The UK is among the worst on this score too. We have the unenviable combination of relatively low output and excess inflation. This is partly a result of Brexit, where labour shortages have pushed up prices and wages, and reduced UK growth, but it may also have something to do with the UK’s relatively poor management of the pandemic.


While most people are rightly sceptical of claims that the government followed the rules on Christmas parties at the end of 2020, they seem to buy their line on the economy. Here is an interesting recent Ipsos Mori poll (source, p19).




The Tory lead is highest on ‘managing the economy’. So why, when the Conservatives have done much worse at managing the economy than Labour, is there a perception that the opposite is true?


Before speculating on this, we should look further down the poll to the question on which party has the best policies on ‘improving living standards’. Here Labour have a solid lead. Now from my point of view as an academic economist, it is quite hard to improve living standards while not managing the economy well. The two things normally go together. If we ignore academic quibbles, living standards improve by raising productivity and growth, and strong productivity and growth is close to any economist’s definition of managing the economy well.


This puzzle of divergent popular views on these two questions is not peculiar to this poll. Here is a poll from 2013 showing much the same thing. To help answer this puzzle, it may be helpful to look at answers on managing the economy over time. There are two break points. The first was 1992 and the ERM debacle. After that, Labour tended to be ahead on the ‘managing the economy’ question. The second was the Global Financial Crisis, when the lead switched back to the Conservatives.


There are thousands of possible reasons for believing the Conservatives are better at managing the economy but Labour are better at improving living standards, and I’m not really qualified to assess them, or to say which question is more important when people come to vote. But that will not stop me from giving my own theory.


I think for many people ‘the economy’ is a construct that they know little about, and which they see as largely divorced from their everyday experience (unlike living standards). But most voters know the economy is important, because it occupies so much of the media. They also know that big events, like Black Wednesday and the GFC, are very important. So they attribute bad things that happen in the economy to the government in power at the time.


If I’m right, Labour cannot expect poor growth and stagnant living standards to turn around voters’ view about who is best to run the economy. The best they can do is begin to bust the myth that the Conservatives are better at running the economy by explicitly saying the economy is not an abstract thing, but it is all about the average person’s living standards which reflects the growth in total GDP.


To successfully do this they need to take a leaf out of the Tory play book. Conservative MPs, whenever the opportunity arises, talk about how their government has created a strong economy. Labour needs, at every opportunity, to start saying the opposite. That requires 'lines to take' given to all Labour MPs, with quick rebuttals if questioned. But more than that, it requires Labour MPs to start recognising the evidence that the last Labour government was better at managing the economy than the subsequent Conservative governments.