a deficit of common sense

Johann Hari has something urgent to tell us:

British politics today is dominated by a lie. This lie is making it significantly more likely you will lose your job, your business, or your home. The lie gives a false explanation for how we came to be in this crisis, and prescribes a medicine that will worsen our disease. Yet it is hardly being challenged.

Here’s the lie. We are in a debt crisis. Our national debt is dangerously and historically high. We are being threatened by the international bond markets. The way out is to eradicate our deficit rapidly. Only that will restore “confidence”, and therefore economic growth. Every step of this program is false, and endangers you.

Let’s start with a fact that should be on billboards across the land. As a proportion of GDP, Britain’s national debt has been higher than it is now for 200 of the past 250 years. Read that sentence again. Check it on any graph by any historian. Since 1750, there have only been two brief 30-year periods when our debt has been lower than it is now. If we are “bust” today, as George Osborne has claimed, then we have almost always been bust. We were bust when we pioneered the Industrial Revolution. We were bust when we ruled a quarter of the world. We were bust when we beat the Nazis. We were bust when we built the NHS. Or is it George Osborne’s economics that are bust?

Well, he certainly knows how open a column. Hari goes on to rip his way through the government's arguments for cuts, by way of a quick visit to America after the Great Crash of 1929. He drops the names of a few economists and ends by repeating and intensifying the charge he began with:

He can do the difficult job of selling that to the British people if he wishes – but he should stop doing it on the basis of a swollen, suppurating lie.

Ew. Anyway: it's a fun read but about half-way through the mildly sceptical reader might start to ponder a few questions, like, if this problem is a Cameron-Osborne lie, why is Labour in on it? After all, the last Labour budget planned for major cuts too, and the current leadership differs with the government on how to deal with the problem, not that the problem exists and is significant. Is this a cross-party lie, cooked up between Alistair Darling and George Osborne over a curry in Westminster?

Well, obviously not. There is no lie (politicians hardly ever lie, but that's a subject for another day). Hari's whole piece is based on a simple error. Britain's most urgent problem isn't the debt, it's the deficit, and that's what the debate is about. Or that's what it ought to be about; as the FT columnist Tim Harford points out in a blogged response, Hari, far from dispelling the biggest lie in British politics, is perpetuating its biggest confusion.

The debt is what we owe overall; the deficit is how much we add to it every year - that's to say, the gap between incomings and outgoings, tax and spend. As you can see from the above chart (click to enlarge) the deficit is indeed as massive and historically unprecedented as the government contends.  At the moment, we're borrowing a huge amount every year just to meet our spending commitments (Hari fails to note that in the terms of his beloved Keynes this equates to a big annual stimulus). The actual size of the debt isn't the point. But if the world concludes that the deficit isn't being dealt with, we're in big trouble. We're some way off a Greek-style collapse of confidence. But any government which concludes that's not even a possibility would be grossly irresponsible.

The problem here isn't that Hari thinks the government is misjudging the scale of the problem; that's a reasonable position to take. Nor is it that he thinks the government's fiscal prudence is damaging the recovery - that's a very reasonable position to take. The problem is the absurdly moralising rhetoric, based as it is on a grasp of economics that seems, well, about as flimsy as mine. Nobody is 'lying'. Cameron's exterior does not, I'd wager, conceal a wild-eyed ideologue, and there is no conspiracy. The plain, dull, unpleasant fact is that the deficit has to be dealt with somehow, and that involves cutting spending or raising taxes or a combination of both. This is the kind of sticky problem that doesn't lend itself to the thunderous moral certainties in which Hari specialises. 

It's a touching characteristic of many on the left to believe themselves morally superior beings, pitted against callous baddies. The right are more likely to paint the left as soft-headed or incompetent rather than bad. Perhaps the left should take a leaf from the other side's book now and again. As I've said before, I think the most effective charge against this government isn't that they're evil liars, but that they're dangerously inept.

Link to Hari's piece.

Link to Tim Harford's response.

Comments

[Tony]

Excellent piece. Unfortunately, this is just the latest in a string of Johann Hari columns that are long on finger-pointing and indignation and short on pretty much anything else. He is also guilty yet again of launching himself into a topic while showing no real evidence of having grasped any of what he's writing about.

I stopped reading his work regularly some time ago, largely because I was appalled by his highly personalised attacks on Nick Cohen for believing what Hari himself professed to believe not long earlier. This included his hit piece on Cohen's "What's Left", which the reader could have been forgiven for suspecting was written without doing more than skimming the book itself. We've had hit pieces on Niall Ferguson and Andrew Roberts (for the record, I'm a fan of neither), both of which were full of holes. We've had a piece in favour of John Edwards in which Obama is condemned for taking advice from Zbig Brzezinski who, as Carter's Secretary of State (sic) created al Qaeda to fight the Soviets (quite the achievement, not least as AQ didn't exist until almost a decade after the administration in which Brzezinski was "Secretary of State" left office). I could go on, but I won't.

When he's at his best, he can be good. The problem is that he's one of those authors where, whenever he writes about anything of which I have any serious knowledge, I find myself raising an eyebrow - not just because I don't agree with his judgement (though I generally don't) but also because he seems to get the facts underpinning that judgement tangled up. When that happens often enough (and, for me at least, it has happened often enough), one can be forgiven for wondering whether his work on topics where one has no more insight than the man on the street can be relied upon. He also routinely lards his work with anecdotes from the field which I often find, let's be delicate here, not entirely convincing.

I certainly don't see the underpinnings for his status as a prize-winning journalistic wunderkind. Nor do I see much evidence that his work is maturing with age. One can forgive this sort of thing occasionally when the writer is a hard-driving 21 year old wordsmith fresh out of university. After a while, however, the joke wears thin. If this is going to be the hallmark of his work pushing into his forties and fifties, he's well on target for turning into some sort of sputtering doctrinaire bore - Richard Ingrams without the sense of humour (or, in fairness, the anti-semitism and appalling treatment of women).

[Chris]

This utter confusion was perfectly illustrated on 'Question Time' last night (it only served to confirm why I dislike the programme so much).

General Secretary of the Public and Commercial Services Union, Mark Serwotka, argued that there does not need to be a single penny of cuts (his words), because our debt (as a % of GDP) has been much higher for most of our history.

And, you guessed it, the muddle went uncorrected.

http://www.bbc.co.uk/programmes/b0105sbt#p00g21x6

(3-4 min mark)

Problem is, Serwotka looks like the strongest voice of the left because Labour aren't putting forward any concrete plans.

Of course someone like Diane Abbott isn't prepared to take on Serwotka and correct the disinformation he is spouting (unwittingly or not) for political reasons (or, less likely, she doesn't understand it either).

Labour end up blowing in the wind, and the Government can swat away straw-man arguments all day long because its only credible opposition (if that's the word) are trades unionists like Mark Serwotka.

Labour has vacated the field.