Should we demand ‘fully costed’ programmes?

Chris Dillow says we should not, and indeed that journalists who constantly ask ‘where is the money coming from’ are pandering to the idea that the height of economic competence for any government is to balance the books. I think his argument makes some good points, but taken at face value it is untenable.

To see why it is untenable, imagine a political party that promised to increase public spending, cut taxes, cut back on borrowing and let the central bank control inflation. Should journalists simply let that pass, as if the government budget constraint no longer existed?

You could respond by saying that a government that promised the earth would obviously not be credible. The problem with that argument is that a majority of the British people recently voted for a plan that would damage trade with our largest trading partner and most of that majority still believed they would be no worse off as a result. It is part of a journalist’s job to remind the public that basic trade-offs and constraints exist.

But I think Chris is right about individual policy measures. It makes little sense to require that each item of addition spending is matched to a measure to raise additional revenue, because this is not how fiscal policy actually works in any country. Whether all taxes should be tied to particular items of spending (hypothecation) is an interesting issue well beyond the scope of this post. Given this is not how current fiscal systems work, journalists and politicians should not encourage a belief that it is.

But if Chris is right about individual policy measures, when do we get the discussion of the overall fiscal picture that I argue is necessary? The answer is a simple demarcation. If an individual spending minister or shadow minister is proposing a particular measure, don’t ask them how it will be paid for. Instead ask them whether that measure makes sense on its own merits, and why doing something else within that minister’s remit would not be more preferable. For example ask an education minister whether it wouldn’t be better to avoid coming cuts to school budgets rather than spending money on grammar schools or cutting tuition fees.

On the other hand, if the actual or potential Chancellor is being questioned, it makes sense to ask whether the programme as a whole would increase or decrease borrowing. Chris is right that all a Chancellor can do is plan for a particular level of borrowing, but that alone is insufficient grounds for not asking about their plans. Instead what it suggests is a good line of questioning for journalists: if the deficit unexpectedly increases/decreases what would you do? With any luck that sort of discussion could involve some macroeconomics that went beyond bookkeeping.

It is here that we can judge macroeconomic competency. In the current context, for example, any politician that fails to note that we are in a liquidity trap (interest rates are close to their floor and the central bank is increasing the extent of its unconventional monetary policy) and that therefore some temporary borrowing on current account would be a good thing is either not competent or is for some other reason still attached to austerity. Any politician that says we must target the overall deficit rather than the current deficit and thereby hold back public investment despite real interest rates being approximately zero is not competent.

A really intelligent way of helping the electorate judge these issues during elections is to enable the OBR to cost the programmes of the main political parties, as the Netherland’s fiscal council does. All it would need is a modest increase in resources for the OBR, which would be a small price to pay to improve the level of public debate. Ed Balls asked for that in 2015, but Osborne refused. It was typically short sighted, because at the same time he could have given them the remit to cost the implications of leaving the EU. That would have allowed the OBR to tell us that Brexit would cost the government around £15 billion a year (Table B1) before rather than after the vote. If the assessment of the economic costs of Brexit had come from the independent OBR rather than the Treasury, that alone might have been enough to change the result.

Post-truth and propaganda

A long read on why it is time the rest of the media stopped treating Fox as TV news, and some UK tabloids as newspapers.

George Osborne becomes editor of the London Evening Standard. Donald Trump blames GCHC for bugging him because of something he saw on Fox News. The lines between right wing media and right wing politicians seem very blurred nowadays. This should not come as a surprise, because right wing media have been becoming much more like propaganda outlets than normal media organisations for some time. The conventions of journalism may have pretended otherwise, but it time we recognised reality.

Let me define two archetypes. The first, which could be called the truth purveyor, is the one we are familiar with, and which much of the mainstream media (MSM) like to imagine they correspond to. The aim is provide the best information to readers or viewers. The second is propaganda. One way of characterising the two archetypes is as follows. Readers have certain interests: objectives, goals, utilities etc. The truth purveyor will provide readers with the information they need to pursue those interests. (As exemplified here, for example.) Propaganda on the other hand, to borrow from Jacob Stanley, aims to provide information that will deceive people from seeing what is in their best interest. Propaganda provides information that supports a particular political goal or point of view.

Take, for example, the issue of welfare benefits. Media as the truth-purveyor type will try and present a rounded and accurate picture of those claiming welfare benefits. Right wing propaganda on the other hand will focus on examples of benefit fraud, or cases where the benefit recipient will be perceived by the reader as taking advantage of the system, with little or no attempt to put the example in any kind of context. This slanted coverage is designed to give the impression that benefit recipients are often scroungers and skivers. The political goal is to make it easier for governments to cut welfare payments, which in turn may allows taxes to be cut.

These are archetypes, and any media organisation will mix the two to some extent. Many would argue that even the most truth-purveyor type organisation may still embody certain assumptions or points of view that distort their readers view of what should be in their best interest. (As argued in Manufacturing Consent, for example.) Mediamacro is an example of this. But that should not blind us to what is happening elsewhere. Lines like “liberals’ nostalgia for factual politics seems designed to mask their own fraught relationship with the truth” [1] suggest nothing new is happening, let’s move on. That would be a huge mistake. It is like saying all news is propaganda, who cares. But because there are two archetypes, organisations can gradually move from one to another, and that movement is important. It played a crucial role in the success of Brexit and Trump.

In both in the UK and US there is a large part of the media which is becoming more and more like a pure propaganda outlet. We are used to thinking about propaganda as being associated with the state, but there is no reason why that has to be the case. In the UK and US, we now have propaganda machines that support political ideas that are associated with the far right, and political interests associated with the very wealthy. Their output is governed more and more by whether it assists those two goals.

Apologists for this right wing propaganda say that most media organisations have their particular political bias, and that will be reflected in the opinions you see in that media outlet. But I’m not talking about opinion pieces or leaders, but about the selection of stories and increasingly about making up stories. I cannot see either the Guardian, Mirror or MSNBC only reporting terrorist incidents by white supremacists, and ignoring those by Muslims. Nor would these organisations make up claims about foreign cities being ‘no go areas’. Suggesting an equivalence between The Mail and The Mirror, or between Fox and MSNBC, is a trap that many fall into.

Now it is natural, in a liberal democracy, that the part of the media that conveys propaganda should pretend it is just a purveyor of truth. When its propaganda becomes self-evident, it is also natural for it to claim that this is because it is others who are distorting the facts. In this sense, the fact that Trump and his supporters talk about the dominant liberal media producing fake news, and the right wing tabloids talk about bias at the BBC should not worry us at all. It is merely indicative that those making the allegations are in the business of, or supporting those, supplying propaganda. [2] More importantly, if we allow this attempt at deflection to move us away from examining what different parts of the media are doing, then the propagandists have won.

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I think it was Charlie Bean who first told me about the stupidity of a firm announcing that it was going to have to make redundancies, without specifying where those redundancies would be. It is foolish because the atmosphere of uncertainty created means that those most able to leave, who are almost certainly the brightest and best and therefore those that the firm would like to keep, end up leaving the firm because they can. Voluntary quits mean the firm no longer needs to create redundancies, but its loses its best quality staff to other firms.

I thought about this when reading about yet more examples of how EU citizens are currently being treated by this government. Colin Talbot has documented what is going on here, but there are literally thousands of similar stories. People who have lived and worked in the UK for years are told by the home office, when their application for permanent residence is turned down, to prepare to leave the UK. Applications which ask for a ridiculous amount of information and are turned down for often mindless reasons. It is a system designed to increase the chances that applicants will fail.

The effect this has, of course, is that those most able to leave the UK, who will often be the most able in terms of the importance of the work they do, will go. Refusing to confirm the rights of EU residents and sending them scary letters is how the UK government is making the same mistake as the firm that announces future unspecified redundancies. I am sometimes told that Brexit will allow the UK to choose the ‘best immigrants’, the ones that will contribute most to UK output and the public purse. Here we see Brexit achieving exactly the opposite: a system designed to encourage the best to leave.

But this is not a new Brexit phenomenon. As I described here, students wanting to come and study in the UK have faced a similar brutal regime, where a mistake by the UK bureaucracy - even when it is acknowledged as such - can lead to additional expense for the student and a period of uncertainty which can only set back their learning. Students midway through their course are told they have 60 days to find an alternative institution to sponsor them or face deportation. The UK Border Agency has no reason to believe that these are not perfectly genuine students who have paid good money to study in the UK, but it chooses to punish them because of alleged failings by a university.

There is an obvious pattern here. It is to treat those who are not UK nationals with a complete lack of humanity. It is, quite simply, very cruel. I talked above about how counterproductive it is, but even if it was not it remains very wrong. It is not something that any democratic government should do. Similar things are happening in the US as a result of Trump’s victory. This lack of humanity comes from a government that begins treating foreigners as a problem, as something to be discouraged, rather than as the people that they are. And it persists because a large part of the press deliberately ignores what is going on. That in turn reduces coverage in the broadcast media.

Contrast this with Germany, which has admitted around 1 million refugees over the last two years. Whatever the motives of the German government, German society adopted a ‘welcome culture’ to these refugees. There have been problems of course, but it is significant that the most serious you may have read about have been made up by certain US media organisations. Contrast this with the UK government shutting down the ‘Dubs amendment’ programme after only a few hundred refugee children had been admitted to the UK. For Germans it seems that refugees are people who have suffered and need help, but for the British they are something to fear and should be kept away at all costs.

Why is Germany welcoming a million refugees and the UK appears to do what they can to keep them out? Is the difference between the two countries something to do with an innate difference in national character? Do we in the UK allow our government to continue their inhuman treatment of foreign nationals because there is

“a special kind of British suggestibility – willingness to obey orders, thinking in generalisations, the search for panaceas, faith in power, which made many British capable of falling to deeper depths than many people of other nations”

Of course not. The above is a quote from Stephen Spender, visiting Germany in 1945, where I have changed German to British. After WWII it was common to believe that what happened in Germany under Hitler could only have happened if there had been some common abnormality in the German character. It was as mistaken then just as it is mistaken now to believe the British are particularly hostile to foreigners. But we should not be surprised when those outside the UK begin to think that way.

There is a much simpler explanation in both cases. The state propaganda machine of Nazi Germany was a critical ingredient in their rise to power and maintaining power. Hitler devoted chapters of Mein Kampf to the study and practice of propaganda. It is perhaps the best real world example of the propaganda archetype I described before. In the UK and US it is very different. Critically propaganda outlets do not have a monopoly of information, and they need to appear much like the rest of the media to retain their readers and their influence on the national stage. But a large part of the UK and US media is nevertheless increasingly acting as a propaganda vehicle, particularly in the area of immigration.

This change is measurable, as this report of a study shows. To quote “over the last 10 years [the UK press] appears to have been complicit in the narrowing of a discussion that is now characterised by an increasingly negative tone.” The anti-immigration propaganda in the Mail and Express reached a peak just before the referendum. As Liz Gerard describes here, these two papers printed on average two or three hostile immigration stories in each issue in 2016. The day before polling, the Mail printed six whole pages devoted to immigration. You would have to be a fool to believe these were ‘reflecting the interest of readers’: it was designed to push the referendum vote the way these papers wanted. It was pure propaganda.

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The are lots of stories around about a post-truth world created by social media. It is usually written up as if it is a new phenomenon created by new technology, but as Timothy Garton Ash notes ‘post-truth’ is nothing new. Equally the hype over Cambridge Analytica (here or here), whether it is accurate or not, is just the technological extension of something that is already happening, and has happened in the past. Most people still rely on the MSM for their news. Post-truth mainly comes from the part of the MSM whose business is propaganda, and the inability of others to treat it as such. Fake news stories on social media did not win the election for Trump. Fox News almost certainly did.

As Tim Harford notes, successful attempts to divert those in a democracy from the truth have a long history. Scientists published evidence that smoking caused lung cancer in the early 1950s. It took decades for that information to lead to campaigns to discourage smoking and for smokers to acknowledge there was a problem, and the reason it took decades was that the tobacco companies conducted a PR plan with that aim in mind. Exactly the same happened with climate change, with considerable success in the US as we are now witnessing with Trump’s election. As a tobacco firm wrote “doubt is our product”.

As Tim and George Lakoff explain, simply rebutting lies with facts can often be counterproductive. The Leave campaign's £350 million a week was a classic example. The more it was talked about, the more it became fixed in the mind of voters. The regrettable truth is that most people do not read the detail, but instead just absorb the headline. In many ways the EU referendum is a classic example of how facts can lose out to propaganda.

All this can just seem depressing, but it is not if we learn some obvious lessons. The first, which Ben Chu explains, is for policy makers not to fall into the trap of appeasement.

“Christina Boswell and James Hampshire have highlighted how the public discourse on immigration in Germany was transformed between 2000 and 2008. Social Democratic politicians used familiar arguments about the economic benefits of immigration. But they did this alongside a campaign to promote positive narratives about immigration and its place in the country’s history to counter entrenched perceptions of Germany being kein Einwanderunglsand (“not a country of immigration”). This twin approach largely succeeded in changing attitudes, flowering in the generous position taken by Angela Merkel’s Christian Democrat government towards Syrian refugees in the summer of 2015.

By contrast in the UK, at the same time, Labour began to talk up “British jobs for British workers” and never seriously rebutted the dominant and dismal narrative of the tabloid press about immigration being an economic burden and culturally corrosive, arguably helping to set the scene for the current bout of self-harming Brexit-related xenophobia.”

Now politicians here may respond that the German example is impossible given the strength of the propaganda coming from UK tabloids (compared to its relative absence in Germany), but that just strengthens my point that we should start recognising that propaganda for what it is. That recognition needs to start in the rest of the mainstream media. According to a study outlined here, “a right-wing media network anchored around Breitbart developed as a distinct and insulated media system ... This pro-Trump media sphere appears to have not only successfully set the agenda for the conservative media sphere, but also strongly influenced the broader media agenda, in particular coverage of Hillary Clinton.”

But the authors also note that “Our data strongly suggest that most Americans, including those who access news through social networks, continue to pay attention to traditional media, following professional journalistic practices, and cross-reference what they read on partisan sites with what they read on mass media sites.” What this traditional media needs to do, in both the UK and US, is to recognise propaganda for what it is, and treat it with the disdain that it deserves.

In the US that is quite a challenge because a lot of that propaganda is now created or recycled by the President himself. In the UK it is a challenge because the right wing tabloids have the government’s support, and the government holds the purse strings of the BBC. [4] It is very easy just to ignore what is happening, and carry on as usual. But this inability or unwillingness to recognise the danger posed by propaganda is part of the reason 2016 happened. Liberal democracy’s survival in the UK and US may depend on recognising and resisting what is in the process of destroying it.

[1] Taken from Stahl and Hansen. The implication that they draw, that propaganda as news or post-truth or whatever you want to call it can be combatted by a “democratic revival” seems simply naive. To see the profound difference between, say, the Blair government compared to what came before and after them, you only have to look at how they regarded academics.

[2] For those who say how do we know who is telling the truth, then you are part of the problem.

[3] And among academics, UK nationals as well. 

[4] And, it seems, increasingly supplies its journalists.

Osborne's folly

I have an essay in the latest New Statesman marking what seems like the end of UK austerity, or more specifically the end of what I have call 'deficit deceit' in the UK: using a manufactured concern about high levels of government debt as a means of achieving an otherwise unpopular reduction in the size of the state. The article goes through the history of UK austerity because this is important in understanding what has and has not happened as a result of Brexit.

There have been two phases in UK austerity. The first began in 2010, and was mirrored by similar moves in the Eurozone and the US. The second began after the 2015 election, and was very much a uniquely UK affair, as Paul Krugman has remarked. By 2015 measures already in the pipeline had largely stabilised the level of the debt to GDP ratio. However as mediamacro's interpretation of 2010 austerity had helped win the Conservatives the 2015 election, Osborne decided to do it all over again by going for a budget surplus and relatively rapid reductions in the debt to GDP ratio.

It was an economic folly because with very low interest rates now is the time to increase the share of public investment in GDP, yet to achieve his surplus target Osborne planned to do the opposite. It was a political folly because it pushed deficit deceit to far. It is this 2015 austerity plan that the Conservatives appear to have repudiated with Osborne's departure. Their belief that what they did in 2010 was necessary seem to remain in tact.

This will be important in thinking about the fiscal rule that the new Chancellor could adopt. He may well go back to targeting the current balance, as both Labour have proposed and the coalition did, removing the straightjacket from public investment. What he is very unlikely to do is include a Zero Lower Bound knockout, of the kind that John McDonnell has proposed, which would have avoided 2010 austerity.

The EU referendum will go down in history as Cameron's great mistake. But as many have remarked, Brexit and austerity are not unconnected. Not in the direct sense that Brexit was a vote against austerity: the 2015 election result showed that many still believed 2010 austerity was necessary. Many people also erroneously believed the NHS had been protected from austerity: after all that was what the media repeated endlessly. Yet the NHS is clearly in crisis, so that had to be the result of immigration. The only way to stop immigration from the EU is Brexit.

To put it another way, it was Osborne's great mistake to think that he could embark on a new wave of austerity while continuing to remain silent on the benefits of immigration, and yet still win the referendum vote. It has often been remarked, in these posts and elsewhere, that Osborne has been a very political Chancellor. It is therefore perhaps fitting that he has been brought down by an essentially political mistake.

Defending George Osborne on Brexit once again

When a good part of the electorate are in cloud cuckoo land, you may have to leave planet earth to talk to them.

Economists are pretty certain - as certain as they ever are - that Brexit will reduce medium to long term growth relative to staying in the EU. A large section of the UK public either do not know that, or do not believe them. They have been told, in some cases by people that should know better, that these assessments by economists are ‘just another forecast’. They are told that economists cannot forecast one year ahead, so how can they possibly know what will happen in 10 years time. [1]

Against this they have the certainty that you cannot control EU migration from within the EU. They feel intuitively that austerity was the right thing to do, and the government confirms this, so the pressure they see on public services must be due to immigration. The papers they read say this day in and day out, and never mention that migration helps the public finances. And then there is the money - however much it is - that we would certainly save by not paying into the EU budget.

As a Chancellor you know this is fantasy. You know the OBR will take account of consensus opinion after Brexit and revise down their projection of UK trend growth over the next decade or two. You know that will inevitably mean lower tax receipts, so you will have to raise taxes or cut spending at some point. But you also know that if you try and add realism, by saying this might not have to happen immediately (and should not happen immediately if Brexit causes a short term recession), you just muddle the message. So to bring home to people this is not just ‘another forecast’, you talk about an emergency budget immediately after Brexit.

Is that scaremongering? Well it is not in the same league as pretending we will soon be ‘flooded’ with Turkish migrants because they are about to join the EU.

When Jeremy Corbyn was asked how he rated his enthusiasm for staying in the EU out of 10, he said 7 to 7.5. It was an honest answer. But the general consensus was that it was not a good answer in terms of the politics of the moment. He needed to send a ‘clear message’ that we needed to stay in the EU, and so should have avoided answering the question. All this makes me glad I’m not a politician. But as far as George Osborne is concerned, I think he just sent a ‘clear message’.

[1] Just in case it needs spelling out, assessments of the long term impact of Brexit are counterfactuals, or conditional forecasts. Of the ‘if the supply of apples falls, their price will go up’ kind. They are much less uncertain than the unconditional forecasts about what will happen to inflation and growth in a year or two.  

Time to rewrite a bit of oral history

I have written at great length about the myth that the Labour government created the need for austerity, or as George Osborne likes to put it, how he has had to clear up the mess that Labour created. Here he is again, in an exchange with Yvette Cooper yesterday. And I long for the day that after he, or any other Conservative, repeats this line, someone has the courage to reply: “that is total bollocks”. This bit of oral [1] history has survived for too long.

I will not go again through all the details (for that see these two posts), because a simple picture tells you all you need to know. Here is the UK government deficit, as a percentage of GDP, since 1970.

The deficit in the five years before the global financial crisis was around the average over this whole period. It shoots up in 2008/9 and 2009/10 for one simple reason: the UK, like most other countries, experienced the largest recession since WWII. Osborne has been clearing up the mess left by a major recession, which left UK GDP around 15% below its pre-recession trend. And the real irony is that he has done nothing to fix that very real problem, but instead obsesses about one of its symptoms.

Yet as long as this myth continues to go unchallenged, Osborne can portray Labour as unfit to run the national finances. As long as it goes unchallenged, a large section of voters will continue to believe that austerity was Labour’s fault. I think most people now agree that Labour made a huge tactical mistake when they failed to combat this narrative five years ago. But as this little exchange from yesterday shows, the damage to Labour the myth has done is not going to go away because the Conservatives will not stop repeating the myth.

I therefore have a suggestion. John McDonnell should send a copy of this chart to every Labour MP and tell them to always keep a copy with them. The next time the ‘clearing up the mess they left’ line is repeated, they should respond not by changing the subject or looking sheepish. They should produce the chart and say that it is just not true. The deficit went up because of the recession following a global financial crisis, and this chart proves it. [2]

[1] I know I'm abusing the meaning of 'oral history' here, but I do so because the written history is very different. The few scholarly papers on fiscal policy under the Labour government are consistent with the data and facts.

[2] I am also happy to suggest simple knock downs to possible responses. For example:

C: The recession was caused by inadequate financial regulation during Labour’s watch.

L: But you were constantly arguing for less regulation at the time.

C: IMF/OECD data show huge cyclically adjusted deficits in the pre-recession years

L: Extremely dubious (the OBR who use real data to cyclically adjust do not have this, and few signs of a huge boom at the time), and pure hindsight (both groups suggested otherwise at the time).

C: Everyone knows Gordon Brown bent the rules and missed his targets

L:  George Osborne has missed 3 of his own targets. Of course policy was not perfect under Labour, but that does not change the fact that the deficit more than tripled in size between 2007 and 2009, and that was all down to the recession.

C: Labour did nothing to tackle the deficit in their last two years in office, when George Osborne was saying they should.
L: You are right, and we make no apology for it. In 2009 the UK, along with the US, Germany and China, undertook a fiscal stimulus, which George Osborne argued against. Every serious economist agrees that helped prevent the recession being even worse than it was. Which means if Osborne had been Chancellor in 2009, UK unemployment would have risen by more and real wages would have fallen even more.

Budget accounting tricks

One of the problems with fixed date deficit (or in this case surplus) targets is that they encourage playing around with the public finances to hit the target. Generally, but not always, this involves making a saving today by shifting costs into the future. Privatisation is an obvious example. It may be justified if the net present value of the sale is positive, or if privatisation really improves efficiency, but all to often it is a device to meet a short term target.

As Jolyon Maugham shows clearly, Osborne has done his fair share of such tricks, and not just in the latest budget. I have nothing to add, except a thought on where this should take us. There are two roads not to take. The first, which is taken by many on the right, is to say that the Chancellor should have imposed more ‘real’ cuts to meet those targets. The second is to suggest that really the Chancellor is doing sensible macro after all, but is just trying to disguise the fact.

What accounting tricks show is that the target itself is nonsense, and not that the Chancellor should try harder to hit them. While these tricks should clearly be exposed, there is a danger that by focusing too much on them, we inadvertently legitimise the target they are designed to achieve. What they show is how difficult the Chancellor now finds it to cut public spending any further. I do wonder sometimes at the mindset of those who write that Osborne has failed because he did not cut enough to meet his targets. Have they internalised the anti-Keynesian propaganda so much that they actually believe it?

For the same reason, these accounting tricks do not show that Osborne is relaxing austerity in the way I and others have argued should happen. The planned decline in public investment is real enough. There were plenty of cuts in the budget, and while disability cuts as proposed have now gone (is this a record for the speed of reversal of a budget measure), they may simply return repackaged. The savage cuts to ‘unprotected’ department spending remain, as does the myth of protection itself. The Chancellor used tricks not because he had a change of heart, but because he ran out of options. Nor do cuts in capital gains tax or higher rate tax bands make for much of a fiscal stimulus, as they fall on groups who will tend to save much of it.

The Chancellor is culpable for sure. But his mistake was not to use accounting tricks, but in putting at the centre of his budget strategy a politically inspired target which makes no economic sense whatsoever.     

Lack of accountability

In 2007 the Pitt review told us that climate change was going to greatly increase the incidence of record breaking bursts of rainfall in the UK. The Labour government responded by substantially increasing their spending on flood defences in the spending review which ended in 2010/11.

The coalition government reversed those increases, leading to sharp falls in spending on flood prevention. Five years and many costly floods later, George Osborne has finally admitted he was wrong by announcing a substantial increase in money for flood defences. After being told by the government, one flood disaster after another, that they were doing everything that was possible, they have now decided that maybe it would be a good idea to spend more.

A bigger mea culpa you could not find. Yet if you google “austerity flooding”, it is still my blog post that comes top. When the floods hit around Christmas in 2013, no one seemed to want to connect the two. The government seemed immune to criticism, and successfully directed any culpability to the Environment Agency (who could not answer back). Even with the latest floods, outside the pages of the Guardian or Independent there was little criticism of earlier spending decisions. Yes Labour were slow out of the blocks in attacking the government, but are we really in a media world where if a senior politician does not talk about something it becomes a non-subject?

Chris Dillow asks why Osborne is not given the scorn and derision he deserves. As ever he gives many possible answers, but to many people one factor above all explains what is going on. It can be summarised by the following chart from the IFS, looking at who wins and who loses from this latest budget.

As I noted in my last post, Osborne felt he had to produce a budget like this for reasons that have only to do with who will be the next leader of the Conservative Party. Yet many will conclude that he (almost) gets away with it because it is in the interests of those who control the media to let him get away with it.

While there is undoubtedly some truth in this, I do not think this is quite the killer explanation that some suppose. Another important factor is that we have been living through a period in which the need to cut spending to reduce the deficit has entered the national consciousness as not only an undeniable truth, but an imperative that dominated all other concerns. So strong was that conviction that it helped win the Conservatives an election, despite the fact that they pledged to make the deficit worse by cutting taxes. Osborne had successfully characterised himself as the politician brave enough to ‘make the hard choices’ required to fulfil that imperative.

But as I have argued before, this belief that what George did and continues to do on cuts is an undeniable necessity is a product of the events of the recent past, rather than some immutable idea that the nation will forever hold. The most significant part of Iain Duncan Smith’s resignation letter is the following:

“I am unable to watch passively whilst certain policies are enacted in order to meet the fiscal self-imposed restraints that I believe are more and more perceived as distinctly political rather than in the national economic interest.”

So a plea to political journalists and commentators. Forget the spin that this resignation is all about the EU referendum (which, like all good spin, has an element of truth) and focus on this sentence. The idea that with his cuts George was and is only doing what had and has to be done is crumbling, and you do not want to be the last to notice. Start holding our government to account, not just for benefits cuts but also for the damage caused by flooding, and above all for the dire performance of the UK economy relative to the past.