Winner of the New Statesman SPERI Prize in Political Economy 2016


Monday, 19 July 2021

Will the Trump/Johnson base lead to its destruction?

 

Republican Senators Ron Johnson and Rand Paul have said they will not get vaccinated. They are the tip of an anti-vax iceberg in the Republican party. Many Republican governors and legislators are repeating far-right messages denying the safety and effectiveness of coronavirus vaccines. Seventeen out of the 18 states with the lowest vaccination rates voted for Trump. This is one reason why the Delta variant could have a large impact on some parts of the US. The Republican party has become a kind of Russian roulette cult when it comes to the pandemic.


Needless to say this is a minority movement in the US. Most people say they have or will get vaccinated. So why are some prominent Republican politicians associating themselves with what will become a very unpopular position as Delta variant cases increase? In one sense this is nothing new, as we saw when most Republican politicians refused to disassociate themselves from Trump’s claim that he had won in 2020 and acknowledge Biden as the winner. Republican politicians that stood against Trump’s nonsense claims were condemned by the Republican base, and subsequently by the party.


This example shows how a minority view that is pretty unpopular in the country can gain influence on the right in the US. Most Republican politicians are scared of their base because of primary elections, and so to be elected (or nominated in presidential elections) they have to pander to this minority view. While appealing to the majority may be the ultimate step, they need to appeal to a minority to take the first step, and they hope that appeal is effectively forgotten or ignored when they face the electorate at large. It’s a risky strategy, but they have no choice if they want to succeed.


Of course it shouldn’t be this way. Leaders should try and educate their party that anti-vax is nonsense and (in a pandemic especially) very harmful. I don’t think this is an example of what Timothy Snyder calls sado-populism. Instead it seems to me to be an example of something more organic and bottom-up. In 1964 the historian Richard Hofstadter wrote an essay entitled “The Paranoid Style in American Politics”. It was at the time that Barry Goldwater became the Republican nominee for president, beating the more moderate Rockefeller, and what he saw as the influence of conspiracy theory and "movements of suspicious discontent" throughout American history. His attempt to portray movements on the left as well as the right in this way has been criticised, but a lot rings true of the parts of the right in the US which has produced both McCarthy and Trump.


The danger is greater if this rule by a minority can elect true believers to positions of power. That is what happened with Trump. An open question is how long those true believers can stay in power, as their beliefs are gradually revealed to the voting public. The question of the moment is whether an ever more extreme right wing minority, once their views are exposed, can ever be re-elected, or whether they will drive their party to ever greater electoral losses. In other words does the extreme right inevitably self-destruct by becoming yet more extreme.




A crucial difference between the UK and US is that the UK does not hold primaries either for MPs or general elections. This greatly reduces the power of the extreme right. However both the national party and members get to influence who gets chosen as an MP. It is possible that party members can be radicalised (by Brexit for example) and select MPs with similar views to them. Most importantly, it is possible that owners and editors of the right wing press can begin to push more extreme right wing ideas that influence MPs and ministers. However will the party leadership, and more particularly the Prime Minister, ever adopt ideas from the right that are both extreme and unpopular among all voters?


Two recent developments shed some light on that question. The first is taking the knee. One MP said they would refuse to watch the England football team play in the recent Euros competition because players took the knee. One prominent minister failed to condemn a minority of fans booing the team while they took the knee. A new television channel designed to appeal to those on the right faced a mass boycott when one presenter took the knee. In the end the channel decided taking the knee was an “unacceptable breach of [their] standards”!


This all reached a critical point after England lost the final to Italy, and three of their black players missed penalties. The racist attacks on social media were horrendous, but they reflected a minority. Throughout the country as a whole the England team, including its black players, is very popular and most supported them taking the knee. As a result, the Prime Minister Johnson changed his previous stance and swung behind the team, condemning those fans who booed taking the knee and pretending he had never said anything different. In this case popularity won out over supporting some of his base.


The second is about removing most restrictions, including wearing a mask, on 19th July. As the number of Delta variant cases, and with a lag hospitalisations and deaths, continue to rise, the policy of abandoning the last checks on spread seems more and more foolish. Experts from around the world have condemned it, and it could produce the ultimate horror - a variant against which vaccines are ineffective.


Johnson and other members of government say ‘if not now, then when?’. The obvious response to this is when everyone, including school children, have been double vaccinated. The government, in response, shows analysis from SAGE that suggests opening up when all adults (not children) have been vaccinated may produce a worse outcome because it will happen before winter. The obvious response to that is why leave children as virus spreaders who have a chance of getting long covid, rather than vaccinating them?


We know the government is wrong on masks because they are now in the position of saying that continuing to wear a mask is the responsible thing to do. They want to rely on individual responsibility rather than ‘government diktat’. If people follow this advice, then by logical deduction the only people who don’t wear masks will be the irresponsible, so ending government compulsion is simply a license for the irresponsible.


As I noted here, most people want restrictions to continue. Those that don’t include a number of journalists who work for the right wing press and many Tory MPs, Both groups go on about ‘freedom’. Here again we have the right pushing an unpopular (and unsafe) policy, but in this case Johnson is siding with the right, either out of inclination or because he will find himself on the wrong side of a majority in his party. In this case Johnson has chosen supporting his base over popularity. How this will influence his popularity we shall see. [1]


The fate of the Republican party in the US will depend on how much voters will ignore the dangerous nonsense that Republican leaders have said and done in the past, and whether there is any chance that they will re-elect a president who helped inspire an attempted insurrection when he lost last time. In either case there is a real chance that the current Republican party will self-destruct. The fate of Johnson’s government may depend on how he chooses between following the views of his base or following the views of most of the country. But either way, with the total support of half the print media and a tame BBC influenced by this press, the chances of this government's self-destruction seem remote.


[1] It may seem ironic that English footballers seem to carry more weight for Johnson than countless COVID experts, but less so once you recognise that celebrity carries much more impact among the voters Johnson is targeting than expertise coming from academics and medics. One of these footballers, Rashford, has forced the government’s hand before.










Tuesday, 13 July 2021

An independent BBC is the last defence against Johnson’s fake world, and it is disappearing fast

 

Johnson’s popularity relies on the existence of a fantasy world. In this fantasy world ending all defences against COVID is freedom, our vaccination programme would not have been possible if we had remained in the EU, the economy is strong and so on. It is a fantasy world that many believe - enough at least to safely keep this government in power. You will discover this fantasy world if you read the following newspapers: the Sun, Mail, Express and Telegraph.


In terms of total reach (print and on-line) that is just over half of the total reach of the major newspapers. That means that just over half of the newspaper reading population (print or online) are fed this fantasy created by this media and the Conservative government. With FPTP biased in favour of the socially conservative Conservatives, that alone would ensure the Conservative party always wins.


That fits our past experience since the moment Mrs Thatcher won. The only time Labour has won is when one member of this newspaper group, the Sun, started supporting Labour. However that probably overstates the influence of the print media. A paper suggest that Murdoch’s flip to Labour before 1997 was not decisive (Blair would have probably won without it), which in turn motivated Murdoch to support Labour.


So it is possible to overcome this bias in the print media if you have a failing government and an attractive opposition. A key reason this remains a possibility is the BBC. The BBC is by far the most widely used source of news in the UK. Unlike the right wing press, it is not ideologically tied to the government, and so for the readers of the right wing press it is an alternative source of information. For most uninterested in politics it is the only alternative source of information about political issues. 


As Tom Mills points out, the BBC is not fully independent in the sense that it depends on the government for its form of financing and the government makes key appointments. However for the most part (but not always) the BBC generally has editorial autonomy. In particular, those appointments that are not formally chosen by the government are made by the BBC alone.


This is the context in which to see the recent delay in the appointment of Jess Brammar, former editor of HuffPost and BBC Newsnight, to a new post to oversee the BBC’s entire news output. According to both the FT and Guardian this delay is because a BBC Board member, Robbie Gibb (who was director of communications for Theresa May), said the appointment would shatter relations with the government. According to the FT, one of the problems is that Brammar filed a formal complaint to the Cabinet Office after a Treasury minister described a HuffPost journalist’s questions as ‘creepy and bizarre’ and that led to the journalist receiving abuse on social media. (The question the journalist asked was straightforward, not ‘creepy and bizarre’.)


Normally the BBC Board is meant to protect the BBC from politicians, and stand up to ministerial pressure. One of their responsibilities involves “upholding and protecting” the BBC’s independence. Robbie Gibb has turned it into a conduit for government interference in BBC appointments. This is “highly unorthodox”, to quote the FT, but hardly surprising from this government.


Needless to say the current Director-General of the BBC is Tim Davie, a former Chairman of a Conservative Association who once stood to be a Tory councillor. Davie criticised BBC comedy output for "constantly aiming jokes at the Tories", and the Mash report is no more. The recently appointed BBC Chairman is Richard Sharp, a former advisor to Boris Johnson as London Mayor and Rishi Sunak as Chancellor, who has also donated £400,000 to the Conservative Party.


There are three reactions to all this which miss the point. The first is to say this boat sailed a long time ago, and the BBC is already a propaganda arm of this government. I think this goes too far, and partly reflects the antagonism towards Corbyn’s Labour seen across the mainstream media. If you want to argue that the BBC has become propaganda I really suggest watching Fox News.


A second reaction is to say what’s new. Governments always appoint their own to key posts, and they often make their views known to the BBC. What is unusual in this case is that we have heard about it. But this issue isn’t about conventional left and right. It is about whether the fantasy world constructed by the government and right wing media is taken as real by the BBC or not.


Which brings us to the third view, which is that the BBC should not appoint people to senior posts who are political. An example of this attitude is a reported response from a government source which says in effect that HuffPost was a “borderline fake news lefty clickbait website”. There are at least two problems with this take. One is that Gibbs himself previously worked at the BBC. The more serious is to equate investigative reporting with ‘fake news’, when the real fake news is produced elsewhere.


There is a very real danger that the UK will become like the US under Trump, where reality is called by the government and its supporters ‘Fake News’, and the BBC feels reluctant to deviate from the real fake news produced by the government. Any discussion of reality and how it differs from the government’s fake news will be called ‘lefty’ by the government and its supporters.


There are plenty of signs that the BBC is already losing its objectivity. There was leaving Brexit lies unchallenged in 2016, Maitlis being reprimanded by the BBC for telling the truth about that trip to Barnards Castle, or Laura Kuenssberg gushing about the deal Johnson did with the EU which was the EU’s first choice deal, and much more. If the BBC is to avoid going further down that slippery slope, it has to ignore Gibb's intervention and ignore pressure from the government when making internal appointments. Not confirming Brammer because of some other spurious reason will fool no one. This will really be a test case about how bad things really are at the BBC.


The reason this is so important is that a completely subservient BBC that fails to challenge Johnson’s fake world when it deviates from reality will probably [1] end democracy in the UK. It is a cop out to suggest this is the opposition's job if the opposition gets a fraction of the airtime the government has. A democracy where only one party gets elected because enough of the population believes a fake version of reality is not a true democracy. Right now the BBC is our main defence against that, and if it falls democracy in the UK will probably fall with it. .


[1] I say probably because there remains one possible route to end a government which has sufficient propaganda resources pushing its fantasy, and that is a public event that has to be reported which allows reality to shatter the government’s fake world. One example from the past was Sterling being thrown out of the ERM in 1992. The government’s reputation for economic management never recovered. However events like this and of this magnitude are very rare.




Tuesday, 6 July 2021

Masks and freedom

 

The government on 19th July intends to no longer make it compulsory to wear masks that protect people from catching COVID. Instead what people do to protect themselves from COVID will become a matter of personal responsibility. It is a ludicrous decision, almost beyond belief, when cases and hospitalisations are rising and millions of people are waiting to have their second vaccine dose. (One dose of vaccine gives little protection against getting the dominant Delta variant.)


To talk about personal responsibility when answering a question about mask wearing is so utterly stupid, yet the government are persisting with it. It is stupid because the masks most people wear mainly protect others from themselves if they have COVID, and do very little to protect the wearer from others if these others are not wearing a mask. In other words most masks protect others from yourself, not yourself from others. So personal responsibility does not come into it.


Precisely because most masks do little to protect the wearer, it will be tempting for many to not wear a mask if they are not obliged to by law. That means that anywhere they go indoors will be dangerous to other people. It’s a classic reason why you need a cooperative solution enforced by the state. The law enforces a decision that most would like (a safe environment), but which wouldn’t happen through individual action.


An obvious analogy is drink driving. We don't leave how much people drink before driving as a matter of personal responsibility, allowing those without enough responsibility to crash into other drivers. Another is guns. In the UK we have laws that ban people from owning a gun. We do not say that there is no need to outlaw guns because whether you get shot is a matter of personal responsibility.


I make that last analogy because so much of what the government does nowadays comes from the worst of the US libertarian right, either directly or through newspapers. In the US compulsory mask wearing has been very controversial, with many saying it unnecessarily restricts personal freedom. But while anyone can buy most types of gun in the US, that is not the case in the UK. For similar reasons outside the right wing press and the ravings of an actor, mask wearing has not been controversial among most of the UK public. For example this poll suggests that most people think compulsory mask wearing protects them from COVID and that it should be made compulsory. Most people want compulsory mask-wearing to continue.


The government will argue that with much of the population vaccinated, allowing mask wearing to be voluntary we do little harm. We have to learn to live with COVID, they will say. But learning to live with something does not equate to ignoring it. With cases rising rapidly in yet another COVID wave, anything the government does to reduce restrictions will intensify that exponential trend. It still remains possible, if very unlucky, for those with two vaccine doses to die of COVID. It is more likely, and hardly pleasant, to be hospitalised.


However the real problems are those who have only had a single dose of vaccine (or those who have only just had two doses). They are much more vulnerable to ending up in hospital and even dying from the Delta variant. There will be millions in that position, probably over 30% of the adult population by 19th July. Why not wait until they have been vaccinated?


I have heard many people say that new admissions to hospital are low because of vaccination so there is no need to worry. But hospital admissions lag new cases by around 10 days. It is true that vaccination means the chances of going to hospital after catching Covid are now lower than they were in January, say. But if the current rate holds over the next few months then hospitalisations will no longer look so low in a month or so, at a time hospitals are trying to reduce the backlog of non-Covid cases.

  

Another reason to wait is mutation. The best way to get a variant of Delta that overcomes the defences of vaccines is to allow Delta to spread among those who have had one dose of vaccine.


Making mask-wearing voluntary will dent the UK economic recovery. A large number of people who don’t want to take the risk, albeit low, of catching the Delta variant will stay away from social environments where others are not wearing a mask. Environments like shops and public transport, for example. Prominent ministers in this government have never appeared to understand the point that if cases keep on increasing and no lockdown is imposed, many people will lock themselves down. The extent of this will be lower because of vaccinations, but it will not disappear.


Among those who will suffer most from making mask-wearing voluntary will be workers that have to come into contact with many people. Shop assistants, bus drivers, plumbers and the like. I can choose whether to go into a shop that has probably had many people without masks in there, but the shop worker cannot.


Why is the government doing something that is unpopular, and makes so little sense? The Prime Minister in his press briefing yesterday said if not now then when? He fears that when the summer holidays end and more people are indoors, it will be difficult to end restrictions. The obvious reply is why not end restrictions when everyone has been fully vaccinated. Everyone in this case could include school children. The truth, I suspect, is that the Prime Minister is caving into his own crude libertarian [1] instincts and pressure from his MPs and the press. He can do that because of complete self-confidence that whatever he does his media will spin it in a favourable light and the BBC will not ask any awkward questions. .


The so called libertarian right likes to talk about freedom, and in this case the freedom not to wear masks. In return for this freedom we will get less freedom for all those that want to avoid getting Covid and are forced to avoid the maskless, and those that have no choice but to do so. Those unable to get vaccinated for medical reasons, or are otherwise vulnerable. Those that get Covid (and particularly Long Covid) as a result of ending compulsory mask-wearing will obviously lose much more of their freedom. As is so often the case with this government, freedom for a few means a lot less freedom for the many.


[1] I say its crude because it sees no problem in curtailing the liberty of others, by preventing them demonstrate for example. 

Tuesday, 29 June 2021

The COVID wave the government doesn’t want to talk about

 

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Right now it looks like the government have thrown away the advantages of getting vaccinated early by letting the Delta COVID variant get a hold in the UK. There is little doubt this was because the Prime Minister wanted a trade deal with India, and so put off putting them on the red list. Here is a graph of COVID cases in various countries, and the increase in the UK is because of the Delta variant.




If we hadn’t vaccinated so early this Delta wave would have been far far worse, and we would have either already locked the country down or been talking about doing so. That we are doing neither is because vaccination - particularly two doses of vaccine - is very effective (but not 100%) at stopping people getting the Delta virus, or stopping them going to hospital.


A better description is that we have a race between vaccination and the Delta variant, and the government by delaying putting India on the red list gave Delta a big head start. This head start could be crucial, for a reason I will explain later.


Anyone who thinks from the chart above that other countries are going to escape a Delta wave will be disappointed. Here is a week-old chart from the FT of how the Delta variant is gradually becoming the dominant variant in other countries.



Because Delta is replacing other variants, aggregates will continue to fall until close to the point at which Delta becomes dominant. One by one, we will see those countries that are currently seeing falling cases experience rising cases again. The Delta variant will produce a new COVID wave in the West, just as the Alpha (UK) variant did before.


What makes this wave different is that the age ranges that are vulnerable to dying from COVID have largely been vaccinated, so deaths from the virus should be lower. But even if deaths are very low, there are a number of problems with running a high level of cases of COVID even if it isn’t associated with deaths. The most obvious is the impact on hospitals.


As Delta mainly affects younger people you might have thought that the number of hospitalisations would be low relative to cases. Initial data suggested among the unvaccinated there was about double the number of hospitalisations per case for Delta than for Alpha. However once we take vaccination into account, the ratio of hospitalisations to cases is about half what it is in January. If that pattern persists, and cases keep rising, we may see serious pressure put on hospitals that are already struggling to get back to normal.


A second concern is Long COVID. At least 10% of those infected with COVID still have serious symptoms 12 weeks later. We do not know, for obvious reasons, whether these numbers will also apply to the Delta variant, but the presumption must be that they will. Allowing another large wave of COVID cases is therefore likely to significantly increase the already large number of people suffering from long COVID.


A third, but time limited, concern is disruption in education. As the Delta variant is mainly being spread among school aged children, it will disrupt the education of many. It is a time limited concern because school holidays are weeks away.


A fourth, and potentially most serious, concern with another wave of cases is that this provides ideal conditions for a new variant to emerge that could seriously diminish the effectiveness of a double dose of vaccine. We just do not know how likely such a development is, but the fact that Delta compromises the effectiveness of one dose suggests complacency is not warranted.


Some have pointed to a falling off of cases in some initial hotspots to suggest that this Delta wave may be short lived. This could be due to a number of factors that have nothing to do with the virus itself, such as school closures and to a smaller extent greater self-isolation among the population in those areas. However even if this pattern is repeated, it will be a long time before we see it at a national level.


The key question is how large a wave we are likely to see in the UK, and whether this will be replicated elsewhere. The bad news is the likelihood that every other region will experience something similar to our current hotspots in time. The potential good news is the summer holidays. The school holidays could reduce the speed of transmission among children, which gives us more time to get everyone vaccinated with two doses.


Which is why the PM’s decision to delay putting India on the red list was so stupid. If other countries are lucky, the school holidays will arrive just in time to prevent what has happened in the UK being repeated all over the West. It will slow down Delta before it really gets going, allowing vaccinations to continue and give those countries a good chance of muting the Delta wave. That chance would have been even greater for the UK if only India had been put on the red list at the same time as Pakistan and Bangladesh.


We can be pretty sure that ‘freedom day’ in the UK will happen while cases are still increasing, hospitalisations are still rising, and deaths will be well into double figures each day. That conjunction says so much about our government: Orwellian to the last. Freedom day as the Delta wave gathers pace.


At the initial stages of a wave, where key data is being revised repeatedly, it is hard to predict the extent of this wave and when its peak will be with any certainty. (We may even see a double-peak wave caused by the summer holidays.) But we can say with near certainty that the implications for hospitals and Long COVID will be very serious indeed.


And the UK government will try and ignore it all. They have made it clear that after much of the population has been vaccinated, they are going to live with COVID. Unfortunately that seems to mean absolving the government in any interest in mitigating the virus. On 17th May face masks were no longer recommended by the government in secondary schools, and that advice has not been reversed despite Delta being mainly transmitted in Schools. (Israel, also highly vaccinated, has been more sensible.) Schemes to help schools improve ventilation have been none. Nothing has been done to improve the government’s lamentable Test and Trace operation, or to incentivise people to self-isolate. The catalogue of failure is endless.


Will the government succeed in pretending there is nothing to worry about during the Delta Wave? Not for long, I suspect. The problem is that there is a small chance that even those who have been vaccinated twice can still get the Delta variant, particularly as this variant is so infectious. With hospitals moving into crisis, I suspect that will make many cautious about a full return to a pre-COVID lifestyle. The UK recovery is likely to be delayed.


While the Delta variant will cause problems for those countries that are well on their way to being fully vaccinated, the real hit will be in those countries that are only starting vaccination. There is a debate about how to get vaccine production to cover all countries as quickly as possible, but it is clear not nearly enough is being done by the West. They must do much more quickly, if only because otherwise the example of the Delta variant could be repeated in an even more serious form, and past experience suggests Western countries will not be able to keep that variant out.









Tuesday, 22 June 2021

What attitudes to lockdowns tell us about the right wing media


When I talk about how important the media is in forming political opinions and attitudes, some people tell me the causation is all the other way around. Their argument is that the press in particular reflects the views of their readers and not vice versa. It is certainly true that good newspapers are aware of what their typical readers think, and that going radically against that could harm the newspaper. Imagine what would happen, for example, if a newspaper declared football to be the work of the devil.


But media influence rarely works like that. Instead it influences views about things that most readers have little idea about, or it amplifies some views at the expense of others. For example, most people have a natural fear of the other. So when certain newspapers started talking about hordes of immigrants flooding the country, that had an influence on readers who were not accustomed to following the actual data. These readers generally knew that immigrants were not yet flooding their own town or neighbourhood, but they also thought they knew it was happening elsewhere because of what they had read, and feared it might be just a matter of time before it happened on their patch. There are plenty of other examples on a similar theme. For example people often wildly overestimate the amount of benefit fraud because of stories in the papers.


But, like declaring football was the work of the devil, there are limits to what the media can do to influence their readers. An interesting case study is the merits or otherwise of lockdowns during the COVID pandemic. Few will have escaped the fact that the right wing press has been full of articles about why lockdowns are unnecessary and harmful. So did that just reflect the views of their readers, and if not was this anti-lockdown campaign able to substantially shift public opinion?


On both counts the answer appears no. Consider the period of September 2020. We had already had one lockdown, so the public knew the arguments for them, and the right wing press had had plenty of time to present their anti-lockdown message. Here is a poll focused on the very limited measures the government had taken so far. What those answering the poll would not have known is that the government had recently rejected advice from its scientists for a much stronger lockdown.



Half of those answering thought the government had not done enough, and of course they proved to be right. But only 13% of people were following the line pushed by many in the right wing press that nothing needed to be done. Furthermore that anti-lockdown view was stronger in younger people, while newspaper readership is concentrated among older people.


So right wing papers were not reflecting their readership, and their ability to persuade has had at best limited success. The reasons for this are fairly obvious. The case for lockdowns is fairly obvious, and most people (particularly of an age that reads newspapers) are pretty cautious about the prospect of catching a life-threatening virus. Trying to persuade people to carry on mixing socially during a pandemic which is highly infectious is in the ‘football is the work of satan’ category.


So why are newspapers pushing this line, if they normally have a good idea of the limits to their persuasive powers. One reason is fairly obvious: lockdowns are very bad financially for newspapers. Sales collapse when people stay at home.


However a more interesting answer is that newspapers were not so much trying to persuade their readers so much as trying to persuade those in power. I noted recently how journalists at Fox sometimes talked directly to Trump (who famously relied on information from Fox rather than his civil servants), and how if you believe Cummings Johnson too was and is influenced by what he reads in the press, and particularly his old newspaper. It is more reasonable to see right wing newspapers championing an anti-lockdown approach as an argument among the governing right wing elite.


So what can we conclude from all this. First, the right wing press do not always follow their readership. That is why politicians are so keen to meet the editors of these papers on a regular basis, and don’t just look at their polling and focus groups instead. Second, newspapers cannot tell their readers what to do when it goes against readers interest and understanding. Newspaper propaganda works best on issues where their readers are not well informed.


Whenever I talk about press propaganda recently, I get told that countering propaganda with better information will not work, because voters will believe what they want to believe. There is a lot of truth in that. When Fox News didn’t follow Trump in declaring he had really won in 2020, they lost many viewers. But there are two crucial caveats when we come to the UK. First, most Conservative voters are not nearly as radicalised as many Trump supporters, yet. Second, and just as crucial, elections work on the margins, and the margins here are voters that have not become radicalised.


Indeed, if selective or inaccurate information didn’t influence readers or viewers, we would have no reason to be concerned about media bias. In reality we now have considerable evidence that media bias does matter. For that reason we should be very concerned that a large section of the press now acts as the publicity arm of the Conservative party nearly all of the time. Having a free press is a great ideal, and we have departed from that in a big way. Press propaganda is an integral part of how a populist plutocracy can stay in power.


I am very pessimistic that this can change that in the short term. While new media like the byline group are great, the typical reader of the Mail, Sun, Telegraph or Express, who has little interest in politics, is not going to read media which is mainly about politics and contains no sport, celebrity gossip etc. In my view the only way to reduce the power of the right wing press is to bring it under the control of Ofcom, and for Ofcom to enforce balance. That can only be done when opposition politicians win power, and are prepared to look beyond negative headlines and act to change one of the main reasons why they find it so hard to win power.



 

Tuesday, 15 June 2021

A government out of control

 

The commitment that the UK government gives 0.7% of its GDP as overseas aid is enshrined in law. Johnson’s government decided to cut this to 0.5%, but didn’t need to put this to parliament because the cut was supposed to be temporary. A large number of Conservative MPs were unhappy with this, and wanted to use parliament to reverse this cut. The parliament’s speaker ruled their attempt invalid, but requested the government to allow a vote on the issue. The government refused. The executive increasingly views parliament with contempt.


So much for the sovereignty of parliament. We knew this government thought little of parliamentary sovereignty when it closed it down, illegally, before the last election. The courts forced it to retract that measure, so now the government is intending to pass laws that would prevent the courts doing so again.


Of course it is open to MPs to pass a vote of no confidence in this government, just as it is possible for a majority of Tory MPs to bring down their leader. But that is never going to happen while Johnson looks like winning the next election. As a result, parliament has no effective control over what this government does.


The government, in the form of Michael Gove, has recently been found guilty of giving public money - our money - to friends in the form of a contract with no competition at all. That is breaking the law. This is corruption. He has no intention of resigning and Johnson will do nothing. In other words this government has been found to be corrupt, and no one can do anything about it.


Matt Hancock has recently been questioned by a select committee on his handling of the COVID pandemic that has killed around 130,000 people in the UK. One of the issues the committee raised was early shortages of PPE. He repeated that there has never been a national shortage of PPE. This statement could best be described as economical with the truth. He was asked about reports, from a whistleblower, that the department of health had pressured Public Health England to change its guidance on release of patients from hospitals to care homes to no longer include the need for a negative COVID test. He said he had no recollection of that - a clear non-denial denial. Mr. Hancock will remain in post.


The Education Secretary, Gavin Williamson, was quick to condemn 10 Oxford students who decided to take down a picture of the Queen from their common room. He knows what is important - it was going to be front page news in the Mail. What isn’t front page news in the Mail is that the new wave of the UK’s COVID pandemic, generated by the Delta (Indian) variant, is very strong among school children, and it is highly likely that these children are helping this variant to spread rapidly. Knowing all this, Gavin Williamson told schools they didn’t need to wear masks any more. Will Williamson resign or be sacked for helping this new wave spread rapidly? Silly question.


Then there was Priti Patel, Home Secretary, who was accused of bullying by, among others, her Permanent Secretary. Bullying is against the ministerial code, and an internal inquiry found her guilty. The Prime Minister refused to apply any sanction, and the only person to resign was the person in charge of upholding standards. The Permanent Secretary was sacked and received a large sum in settlement from the government after he took the case to an employment tribunal.


Then there was the Housing Secretary who unlawfully approved a housing scheme so that the developer could avoid paying £40 million odd to the council. Not even a rebuke from anyone in government. Corruption is particularly rife among building developers and this government. There is much more, but let me cut to the chase. Actions that would have led to pretty rapid resignation in past administrations have been ignored by this Prime Minister time and again.


It is not as if his predecessors in office have been shy of sacking ministers who transgressed in various ways, as this chart shows:



Why did Johnson keep Patel and the others? Why shouldn’t he? They are his people, and nothing bad is going to come from keeping the ministers he chose in the job. It is tempting to say that his own actions are too similar to these ministers (lying, breaking the ministerial code), but I don’t think that is the key here. The key is that this government is totally unaccountable, and does just what it likes.


It is unaccountable to parliament, because it has a large majority and Tory MPs are not prepared to bring the house down. It ignores the law when it can, and when the law does stop it doing something it then attempts to change the law so it won’t be stopped in the future. It gets away with this because it has effectively the one key check on its power - the media.


For a large part of the press, Johnson is their Prime Minister. They became propaganda outlets to persuade people to vote for Brexit, and they have remained propaganda outlets supporting the government ever since. It is tempting to say this has always been true, but the extent to which the right wing press has become the propaganda arm of the right in the Tory party has steadily increased over the last few decades. It is now fully signed up with the government’s culture war, which is why 10 students taking down a picture of the queen can become headline news. Talk of a free press in this context is laughable - these titles are now part of a Tory party run by one of their former journalists.


However the big change, begun by Thatcher and Cameron and completed by Johnson, is to tame the BBC. This is hardly surprising, when party donors are appointed to key positions and the government keeps attacking the BBC’s outputs, income and even its existence. The BBC does not push propaganda, but they do not take it on either, giving the press a largely open field for their propaganda to work. They avoid the truth if it embarrasses the government, and when its reporters do tell things straight, they are put down by the BBC’s leadership. (C4, Sky and sometimes ITV are better, but the BBC overwhelmingly dominates in terms of viewers.)


The only accountability that has any influence on this government is the electorate. But because of its natural advantage in the media, and unfortunately an opposition that seems pretty ineffective beyond PMQs, that influence on the government is partial and weak. Issues most voters will not notice, because their only sight of them is a news item towards the end of a bulletin (like the government breaking the law on contracts), can be safely ignored by the government.


Alas, because of the way the BBC fails in its reporting, even things that do have a large impact on voters, like tens of thousands of unnecessary deaths, will never be described in those terms. That lack of media accountability allows Johnson to ignore his scientists, and put personal ‘freedom’ above saving lives and the economy. This is what happens when the government becomes unaccountable. [1] It is allowed to make mistakes costing lives, and pays no price for these mistakes. 


None of this is a surprise. What I didn’t know then was that Johnson would choose ‘freedom’ over lives and the economy not once, not twice, not three times but now four times. Johnson prioritised getting a trade deal with India over protecting the UK from a new highly infectious variant. When Johnson went to stage 3 of removing the latest lockdown he knew SAGE was warning of hospital admissions on the scale of the previous wave, and he carried on regardless with little media comeback. He can only carry on ignoring scientific advice because the only institutions that could hold him to account in the eyes of most voters choose not to do so. This is why, for the first time in living memory, we have a government out of control.


[1] What has changed since Blair took us to war with Iraq? some on the left might ask. Blair went to war with parliament’s approval. Johnson takes key decisions with little or no reference to parliament. There was a huge demonstration against the war, which if this government gets its way a similar demonstration could be deemed illegal by this government.

Monday, 7 June 2021

How should we think about talk of an impending US inflationary spiral?

 

In 2013 I was presenting at a Bank of England conference. The UK recovery had stalled for three years. I cannot remember the details, but I was probably arguing that the economy desperately needed fiscal stimulus, not more austerity. A very well known academic and ex central banker started talking about inflation and the dangers of expectations becoming 'unhinged'. In my response I came quite close to losing my cool.


I wrote this post afterwards, which attempted to analyse why I had got so angry at that word ‘unhinged’. It is, after all, used a lot by central bankers and some economists. But its use makes no sense in today’s world. Here is a passage from that post:

“It is as if inflation expectations can be in one of two states: either low variance with mean reversion to the inflation target (or something close to it), or as highly volatile and could go anywhere. In this second imagined state, as expectations of inflation drive actual inflation, we could have ‘inflation bubbles’, which would become very costly for the central bank to prick. As we really do not want to go to that second state, we have to do everything we can to stay in the first state.

It is this view of the world that I find very difficult to believe - in fact I find it absurd.”

I still find it absurd. We cannot at the same time talk about how long term inflation expectations have become fairly anchored to the inflation targets as a result of central banks controlling interest rates to hit that target, and in the next breath talk about expectations becoming unhinged while the same central banker with the same or very similar inflation target is in place. That makes no sense, unless the aim is to permanently run the economy with a weak labour market as Kalecki suggested capitalism would.


All the evidence, direct or indirect, points to the story about fairly anchored long term inflation expectations due to inflation targets and independent central banks being correct. Most macroeconomists say they believe this story. That is why they prefer independent central banks (controlling inflation with inflation targets) setting interest rates instead of national governments controlling inflation by setting interest rates or fiscal policy. In that context, and when short term interest rates are at their lower bound, it seems bizarre in the extreme to start worrying about inflation expectations becoming unhinged.


The whole point about flexible inflation targets is that positive inflation shocks due to commodity prices increases, or temporary shortages (labour or goods), no longer kick off an inflationary spiral. If what was temporary becomes permanent, the central bank can raise rates to cure the problem. The clearest example of that was the oil price boom that started in 2004, which came nowhere near repeating the experience of the 1970s.


The whole point of the new state contingent policy regime that many macroeconomists now favour is that fiscal policy looks after recessions and interest rates stop inflationary spirals. If fiscal stimulus does not lead to inflationary pressure that requires interest rates to rise above their lower bound it is not a big enough stimulus.


The failure of the last decade in the US, UK and Eurozone has been the absence of that stimulus (and instead austerity), and unconventional monetary policy being insufficient to cope with severe recession. The failure is manifest in a largely unexplained shift down in the path of ‘trend’ output. As many of us explained before this happened, being conservative about policy risks a long term deterioration in output and prosperity. The upside risk was trivial in comparison because raising interest rates are very good at keeping inflation steady in the medium to long term.


This is the central argument about why it’s best to overshoot on fiscal stimulus rather than do exactly what you think you need to do to hit the level of output that stabilises inflation. It is the argument of asymmetric risks. If you are conservative or do exactly what you think you need to do, the risk that you get things wrong because the stimulus turns out to be insufficient (because your calculations were wrong or unexpected things happened) is much greater than the risk that you overshoot. If you overshoot you quickly get higher interest rates and a temporary blip in inflation. If you undershoot it will take you some time to realise what has happened, and you will have lost real resources for everyone in the economy forever.


As I noted here, the Eurozone and the UK seem to be intent on making the same mistake again, approaching a conservative view of the natural rate gradually from below. Only in the US do policymakers understand the mistakes they made before. After a failed coup against democracy and the opposition party in thrall to the coup maker that is hardly surprising.


Does the change in US monetary policy to a form of average inflation targeting change the logic of going bigger than you think you need to? In fact the opposite is true. It means that some excess inflation will be tolerated for a time, to make up for previous persistent undershooting of the target. That shouldn’t mean that long term inflation expectations rise above target, as long as the central bank is clear what it’s doing. It remains the case that in time interest rate rises will bring inflation down if necessary. As long as US monetary policy makers, who have high levels of credibility, make it clear that excess inflation will only be tolerated until a clearly defined state is achieved, they prevent long term inflation expectations rising.


When you add this to the argument of asymmetric risk, any fiscal stimulus needs to be targeting not just the higher inflation the Fed will tolerate, but higher than that. The Fed should have to raise interest rates in response, and if they didn’t need to you have a fiscal policy failure. (That failure is an all too likely outcome in the Eurozone and the UK.)


So those who say that Biden’s plans would raise inflation should be met with ‘I would hope so’. The same reply is appropriate if we replace ‘inflation’ with ‘interest rates’. Of course it is still possible that Biden’s plans (even after they are watered down?) are likely to raise inflation by far too much, requiring far too great an increase in interest rates, even allowing for the asymmetric risk outcomes argument. That I think is the view of, most notably, Summers and Blanchard.


I’m not going to add to the many different assessments of exactly what the first Biden stimulus will do. Instead I will point to why I think the Biden critics are wrong, which again goes back to the theory that macroeconomists teach today. The people who really need the stimulus cheques will spend a lot or all of it, but no one is arguing against supporting these people. The argument is that the cheques are also going to people who don't need them, and have saved a lot because of COVID. But being savers, these are people who will save most or all of the stimulus cheques (see Florin Bilbiie, Gauti Eggertsson and Giorgio Primiceri here). As a result, Summers’ assumption on the demand impact of the stimulus cheques seems too high. I have consistently argued that the end of pandemic will see an increase in pent-up consumption, but that is a very temporary affair.


The US is streets ahead in macroeconomic policy terms than both the Eurozone and the UK. Both the latter have not changed their monetary policy goal and still obsess about deficits. If the forecasts prove correct the US will come out of the COVID recession with no long term scarring, while across the Atlantic we will not. No doubt lots of what Krugman calls Very Serious People in the UK and EZ will find reasons for why that was inevitable and had nothing to do with an inadequate stimulus. The reality will be that the US learnt from past mistakes, but the same leaders who presided over the austerity disaster after the Global Financial Crisis haven’t fully understood what they did wrong.