How Brexit advocates intend to smear economics

Those who are devoted to Brexit have only faced one real enemy: economics. It is in the DNA of economics that trade is good, and so anything that makes trade more difficult will be costly. On top of this basic insight on which so much of society is built is a host of detailed evidence on the impact of trade agreements and the effect of more trade on the economy. This knowledge had become received wisdom among most MPs, probably as much if not more through their contacts with business.

What Brexit advocates had on their side was the huge advantage of fanatical support from most of the Tabloid press as well as the most widely read broadsheet . It is a schoolboy error to say that because newspaper circulation is declining its influence is also declining. More people may get their news online, but newspapers remain a primary news source online, either directly or indirectly. The broadcast media also tends to take their lead from newspapers. This is why Leave wanted a referendum, because they thought they could win, not because they had any great belief in this form of democracy. [1]

In the referendum itself economists were largely sidelined, and when their arguments did appear via the predictions of organisations like the IMF they were generally accompanied by a matching segment from the tiny band of “economists for Brexit”. For this and other reasons I have discussed at length in earlier posts, the Brexit advocates won, narrowly. But the advocates of Brexit still face a problem. If the news as Brexit happens is all bad, then maybe people will begin to hear about what the overwhelming majority of economists have been saying.

And sure enough, that has been happening. Sterling crashes the moment markets hear about the vote, and this will gradually reduce consumers’ real incomes. The Bank has to cut rates to their lower bound and restart QE. Forecasts of the public finances deteriorate, most recently here. So they needed some way of smearing all these negative medium term economic predictions. When the Bank of England revised up their forecast of UK GDP growth in 2017 from 0.8% in August to 2% in February (see this post), they saw their chance.

They will now claim that economists are completely discredited because they all thought GDP would collapse as a result of the Brexit vote and it hasn’t. Therefore anything they say about the public finances or growth in the medium term can be discounted. Now of course among those that know anything about economics this is nonsense. But most people do not know much about economics, they do not read the FT or Economist, so this kind of propaganda is effective. Don’t be surprised to hear it from political journalists in the broadcast media before long.

So for the record, before this happens, here is why it is nonsense.

1. (And most important) Short term unconditional macroeconomic forecasts are extremely unreliable: always have been and I suspect always will be. They are slightly better than guesswork, but for a central bank that slightly better is well worth having. Predictions about the long term impact of Brexit mainly come from the non-macro part of international trade: gravity equations and all that. Their empirical foundation is strong. The idea that lower immigration will hurt the public finances is also common sense once you recognise that immigrants are young, and therefore will pay taxes that finance their use of the NHS and other public services with plenty to spare. This has nothing to do with macro forecasting!
   
   
2. Actually it is not the case that economists universally thought GDP would collapse. Here is the FT survey: most thought it would collapse, but it was not universal. The FT survey focuses on City economists, not academic economists. One prominent academic economists, Paul Krugman, has always been very dubious about talk of a recession. What is true is that economists universally think Brexit will have bad long term effects.
   
   
3. As I wrote here in June last year, the macro impact of Brexit involves counteracting forces. The depreciation is partly in anticipation of the loss in trade Brexit will bring, but in the short term it could boost net trade. Consumers could beat (for now) the increase in the prices of imported goods by buying durables immediately. Most forecasters thought these effects would be counteracted by negative effects, and it was reasonable to do so, but a sharp downturn was never a one way bet. In contrast, there is no upside to making trade more difficult with your nearest neighbour. The only question is how bad will it be.

If you think this is all so obvious that the propaganda about economists being hopelessly discredited will not work, I think you need to get out more. The line 'they all got the immediate impact completely wrong so we cannot take their medium term predictions seriously, and who can forecast until 2030 anyway' will be repeated ad nauseam in the press and by Leave advocates. Most political journalists will not know this line is rubbish and full of elementary confusions, because they do not talk to academic economists either directly or indirectly. The one group who could puncture this bubble is business, but at present its voice has been fragmented and therefore weak.  

[1] For those who still doubt the power of the tabloid media, imagine there is a car market with a single best selling car, call it car R. A new rival is launched, car L. It is independently assessed to perform worse, but this assessment is not widely available. But car L gets a year of pre-launch publicity in 80% of the tabloid press, followed by a period of 6 months non-stop adverts for this car coupled with stories about the failings of car R. All discussion of the technical merits of the two cars in the broadcast media involve debates between advertisers for both cars. Now, honestly, are you going to tell me that under these circumstances car L would not capture a lot, perhaps a majority, of the market?

Cutting the Mail down to size: welcome to Scotland

For non-UK readers who might be mystified by the picture above, some background. The Daily Mail, a UK newspaper that once supported Hitler and seems to be returning to those good old ways, recently called the three independent judges, who had just ruled that parliament should have a say on triggering Article 50 to leave to EU, “enemies of the people”. In response to this and their remorseless headlines pushing the idea of a migrant threat, a group called Stop Funding Hate asked advertisers to take their business away from the Mail. Lego appears to be their first success.

All the UK tabloids have Scottish editions, but there is one additional Scottish tabloid, the Daily Record. In Scotland the Daily Record has a little under a third of the daily tabloid market. The Scottish Sun has a little over a third. The Mail has only 15%. Contrast this with the rest of the UK, in which if I’ve done my sums right the Mail has a third of the market, the Sun has a third, and the rest is split between the Mirror, Star and Express. So in Scotland, unlike the rest of the UK, the Mail does not dominate the tabloid market.

But everyone knows Scotland is just more left wing and liberal, you might say. But you would be wrong. When social attitudes are measured, Scotland consistently comes out as looking very similar to the rest of the UK.

The idea that the media is just a mirror, reflecting the political attitudes of its readers, is a (dare I say cultivated) myth that falls apart the moment you think about it. It relies on the idea that if a paper does not reflect a reader’s political viewpoint, the reader will stop buying. But most people do not buy newspapers for the politics. Furthermore, the market is hardly flooded with alternatives. These facts give newspapers considerable agency to push their owners views. Of course there are limits to what a paper can do, and Murdoch in particular is very careful not to let his papers get too out of line with its readers, but within those limits they have considerable power. Why else do politicians spend so much of their precious time courting them, if they have no influence? As Murdoch said, when asked why he was so opposed to the EU: “That’s easy. When I go into Downing Street they do what I say; when I go to Brussels they take no notice.”

In the EU referendum we know how the Mail, Sun and Express became part of the Leave campaign. That means that only around 20% of the UK tabloid market argued to Remain. What is more, this 80% pushed their position in a way that can only be described as propaganda. Was this dominance just a reflection of readers views?!

In Scotland however the Daily Record argued for Remain, and the Scottish Sun sat on the fence. (Compare the Scottish Sun’s editorial to the one the rest of the UK saw.) That means that those arguing for Leave were in a slight minority in Scotland. But perhaps more importantly, readers obtained information from newspapers, not propaganda. As we know, Scotland voted by over 60% to stay in the EU.

I listened to this talk (text) by Nicola Sturgeon at SPERI a week ago. She argued, correctly in my view, that leaving the EU but staying in the single market was the obvious way forward after such a close vote. She says that not only did austerity cause significant economic damage, but it also hurt the very fabric of society. She talks about how a fairer society is also good for the economy. None of the leaders of the three other main parties could argue these points. And she argues all these things with calm authority. It is natural to ask why the UK as a whole does not have a political leader of this quality. Perhaps a more balanced tabloid press in Scotland is part of the answer, although there are no doubt many other reasons.

Of course Sturgeon and the SNP can attempt to deceive voters, as they did in the Scottish referendum when it came to the short term fiscal costs. Yet in Scotland newspapers, including the Sun, gave their readers both sides of the argument rather than feeding them propaganda. And Scotland voted to stay part of the UK. It was close, but so was the EU referendum vote in the UK. Whether people get facts or propaganda from their newspapers can make that difference.

The benefit cap: more media driving policy

Yesterday I talked about how the media, and the right wing tabloid press in particular, plays a major role in determining not only government policy on immigration and the EU, but also determining the policy of the Labour opposition (on austerity, immigration and the EU). Yesterday also saw the introduction of a reduced benefit cap in the UK, which is another issue where both government and opposition policy has its origins in the tabloid press.

The benefit cap imposes a maximum figure you can receive in benefits (where benefits include child benefit). The previous cap hit around 20,000 households, mainly those with large numbers of children or paying very high London rents. (This and subsequent figures come from here.) The new lower cap will hit nearly 90,000, and its impact will be felt throughout the country. Those already capped will lose a further £3,000 per year (in London) or £6,000 per year (elsewhere). The government expects those households newly affected by the cap to lose an average of £2,000 a year.

The origin of this cap come from countless stories like this in the tabloid newspapers. Such stories, which are hardly ever contextualised in terms of how typical they might be, understandably annoy many people. As a result, the policy of a benefit cap has proved very popular. The government formalised motivation for the original cap with the idea that no one on benefits should receive more than they could by working. But as Declan Gaffney explained in this superb post:

“people are not generally better off on benefits than working: that’s the effect of having a minimum wage to which levels of in-work support (tax credits and housing benefit) are calibrated. As long as someone is working 16 hours a week at the legal minimum hourly wage, they are better off in work. So the principle that the public approves – the one they are in fact approving when they give their support to the cap- is already built into the social security system. But as the public is not generally familiar with the workings of the system (why should they be?), they are not necessarily aware of this.”

However the cap was quantified by comparing all the income of those out of work with just some of the income of those in work.

“So child benefit, child tax credit and housing benefit are included on one side of the comparison (out of work) and excluded on the other (working). You can demonstrate anything if you’re prepared to rig the comparison in this way, and that is precisely what the government has been doing.”

It is difficult to imagine any other motivation beside garnering popularity or appeasing the press for why the government introduced the benefit cap. The original cap raised relatively small amounts, but had a large negative impact on already poor children. The evidence suggests that only a very small percentage of those hit by the cap were encouraged to find work or move. But such was the popularity of the cap, that both the LibDems and Labour accepted it ‘in principle’. Gaffney’s post contains this very revealing quote from the LibDem Lord Kirkwood

“I want to make it clear that I am implacably opposed to a household benefit cap in principle. People's eyes glaze over when I try to explain my main reasons. I tried it in Grand Committee and by the end people looked at me as though I was possessed..... What I should really like to do with Clause 94 is vote against the whole thing. However, my noble friend Lord German and one or two others took me into a dark room, sat me down and said, "That wouldn't be sensible because the great British public know the square root of next to nothing at all about the detail of the technicalities". He has persuaded me that I should mitigate Clause 94, and I am prepared to do that.”

The benefit cap is also an example of where an opposition tactic of ‘accepting in principle’ but tinkering at the edges just becomes failed appeasement. Gaffney ends by saying: “there are costs attached to this strategy, in terms of the quality of political debate and more generally in the endorsement it gives to a big untruth about the social security system and those who are relying on it.” His post was written about the initial cap in 2012, and yesterday’s intensification of the policy suggests he was absolutely right. (Contrast with the bedroom tax, which Labour did oppose.) [1]

In 1966, Ken Loach made the television play Cathy Come Home about homelessness. In a small way it shocked the nation, by making many people aware of something that was otherwise unreported. Today what we have on television is Benefit Street. Ken Loach recently made the film I, Daniel Blake about the victims of the government’s benefit system which has helped create the huge expansion of food banks. But if the film was shown on TV today, I doubt whether it would have the same impact as Cathy Come Home. The idea that most benefit claimants are in some sense fake remains embedded in the public consciousness, and the belief is supported by the same media that initially helped create it. It is another politicised truth: a falsehood that politicians and the political media pretend is true.

 [1] The danger of conceding the principle can also be illustrated by austerity. Once you accept that the deficit is a problem that requires an immediate solution, there are no limits on how much austerity you have, as public credit will always go to those to try and solve the deficit problem quickly.

Freedom of Movement, Austerity, Labour and MPs votes on Brexit

In three important ways Labour’s current attitude to Freedom of Movement reminds me of their pre-Corbyn attitude to austerity. First, Labour while in government encouraged immigration from the EU, and the UK economy was probably a lot better off for it. But they now tend to say that was a mistake. To his credit Miliband never conceded that Labour while in government borrowed too much, but he deliberately chose not to strongly contest Conservative and media claims that they had.

Second, their policy for the future is now to call on some controls on Freedom of Movement as part of the Brexit negotiations. That is rather different from May’s view that ending Freedom of Movement is a red line, but I doubt many voters will notice the difference. The fiscal policy Labour campaigned on in 2015 was significantly more sensible than Osborne’s policy, but they chose not to campaign very much on the difference, insisting that they too ‘were tough on the deficit’. Immediately after 2015 a number of MPs argued that Labour should accept the need for austerity.

Third, in both cases - austerity and restricting Freedom of Movement - the policies as enacted or proposed by the Conservatives did and will damage the economy. Austerity cost every household at least £4,000 (it could easily be £10,000), and reducing immigration from the EU is likely to have a large negative impact on the public finances, both directly and because we will have to leave the single market. Yet because Labour in effect conceded the issue (on austerity) and concedes the issue (on FoM) they find it difficult to say this in public. That in turn means that the public hardly hear these economic arguments.

In both cases Labour is not assessing what policies best enable them to achieve their principles, but instead what they need to do to avoid losing votes. [0] With austerity Labour became convinced that voters could not see beyond simple ‘government like a household’ analogies. After Brexit (and in some cases before that) Labour is convinced that they will lose votes heavily in their traditional heartlands if they fail to argue for controls on European migration.

You might think this is just normal politics. If voters want something strongly enough, it is self-defeating to fight that. Better to move your policies towards what voters want. But that ignores my third point of similarity between austerity and Freedom of Movement. In the case of austerity, and for a significant number with Freedom of Movement, voters’ views are based on misunderstandings involving economics. As I argued in this post, many voters think restricting immigration will improve their own access to public services, whereas in reality it will do exactly the opposite.

If you think it just seems wrong for politicians to support (or not actively oppose) policies that would make people worse off just because people erroneously believe the opposite, I would agree. [1] But it is important to understand one important reason why they do this. It reflects an environment which gives virtually no time to economic expertise, by which I mean treating it as knowledge rather than just one opinion to be balanced against another. The BBC refuses to treat economics, unlike climate change, as knowledge whenever it is politically contested, and it is deliberately excluded from most of the tabloid press.

If you think that account is reasonable, now think about Brexit, and the vote which (hopefully) MPs will have on whether to trigger Article 50. The referendum was advisory (as even Nigel Farage admits), and won by only a tiny majority. They could say that on a matter of such importance that is too slim a majority on which to leave, but they will not. They could insist that given the closeness of the vote the government should try and again negotiate with the EU, but they will not. Labour MPs in particular might reason that because they opposed offering a referendum in the first place*, the argument that they have to respect the ‘will of the people’ makes no logical sense. [2]

Even if they do not vote against invoking Article 50, they could say that while a majority voted to leave the EU, that is not equivalent to leaving the single market, and therefore any negotiation that did involve leaving the single market would require a separate referendum. Probably a majority of MPs would like to vote that way, because they know the extent of the harm leaving the single market will cause. But the majority will not, because they will be branded by the tabloid press as denying the will of the people. They fear that will lose them votes, and perhaps even threaten their physical safety. Once again, as with austerity and EU migration, the media will prevent many MPs doing what they believe is right. [3]

[0] As Wolfgang Münchau correctly argues here, what centre-left parties around the world were actually chasing were short term votes, or worse still focus groups. Supporting austerity was a disaster for the centre-left in the medium term, just as alllowing Brexit will be for Labour. (One very minor but annoying point on Münchau's piece: we wrote our Brexit letter all by ourselves. No one 'got us' to do it.) 

[1] The alternative is that MPs like voters do not understand the economics. I’m not sure if this is better or worse.

[2] You do not want to hold a referendum because there are no grounds for doing so, and therefore it is not something a referendum should decide. Or because you want to stay in even if a majority said they didn’t. Actually holding a referendum does not change these views..

[3] The situation is of course much worse because of the stance taken by either leader. May’s statement that the headlines in the Mail and Sun after the court decisions were reasonable is quite extraordinary. Corbyn’s position is hopelessly compromised by his own antagonism for the single market, and it was naive if Labour party members who voted for him ever thought otherwise.

*Postscript (7/11/16) Although this was true under Miliband, in their shell shocked state after the election they actually voted in favour (thanks Sunder Katwala @sundersays for reminding me).

Brexit and neoliberalism

In a recent post I talked about the “neoliberal fantasists who voted Leave”. Here is Ryan Bourne from the influential Institute of Economic Affairs. He notes that “the mood music from the post-referendum Conservative party — with former Remain backers in No 10 and the Home Office overcompensating with a caricatured view of what voters want — is not a good sign for the short-term”. But he still believes that Brexit can be transformed into some kind of neoliberal wet dream, with a bonfire of regulations and a unilateral abolition of UK tariffs on trade.

The economics of this was always fantasy, as John Van Reenen and colleagues painstakingly demonstrate here, but it also seems politically naive. After all the Leave campaign was a success largely because it promised to control immigration as a result of leaving the EU, controls which are distinctly anti-neoliberal. Controlling immigration is not a caricature of what the majority of Leave voters wanted, but instead what most were voting for. It does seem naive to believe that a government after Brexit would try and quietly forget about this, particularly when led by someone who had spent the previous 6 years trying and failing to control immigration. It also seems naive to imagine that this turn against neoliberalism would not go beyond immigration.

And yet, the ‘southern strategy’ was highly successful for the Republican party in the US. This combined an economic policy that favoured finance and corporates, increased inequality and free markets with an identity politics that appealed to race, religion and cultural identity. (I could perhaps add geographical identity here as well: see this article by David Wong.) Perhaps the UK party of the right could follow a similar course, using immigration as a substitute (and for some a proxy) for race, whilst pursuing an otherwise neoliberal agenda?

Is this what the Conservative party tried to do under Cameron and Osborne? Actually I think that is the wrong question, for reasons I will come to shortly. In terms of what the Coalition government actually did, Jonathan Portes summarises it thus:

“The promise to cut net migration to the “tens of thousands” was generally regarded by immigration policy experts as unachievable, or achievable only at an economic cost no sensible government was willing to pay. In practice, the latter course was never tested: resistance from within government from the Department of Business, supported to a greater or lesser extent by the Treasury, meant that even non-EU migration was only reduced very substantially for non-HE students; for most other routes it has stabilised. Non-EU net migration is currently about 150,000 a year, slightly higher than EU net migration

This does not mean the policy changes had no impact: the increase in the regulatory burden on business and the education sector has been substantial, and has certainly resulted in some reduction in skilled and student migration. The most damaging single decision was probably the closing of the Post-Study Work Route. However, overall, any economic damage was considerably mitigated.”

Of course that resistance from the Department of Business came from a Liberal Democrat, Vince Cable, and not a Conservative. Which leaves open the possibility that the economic damage from attempts to hit the immigration target might have been greater if just the Conservatives had been in power. So it is not clear that the Conservative focus on immigration was just so they could win elections with zero cost to their more neoliberal objectives. It still remains the case that, just as Trump exposed the flaw in the Republican’s southern strategy, so Brexit was the critical flaw in Cameron’s emphasis on the problem of immigration and his failure to meet his own targets.

I said it was the wrong question, because I think in this case it was not a political party that was calling the shots but a section of the print media: the right wing tabloids. As Andy Beckett writes in this comprehensive history of this part of the UK media:

“[Brexit] was an outcome for which the tabloids had campaigned doggedly for decades, but never more intensely – or with less factual scrupulousness – than this spring and summer, when the front pages of the Sun, Mail and Express bellowed for Brexit, talking up Britain’s prospects afterwards, in deafening unison, day after day. Two days before the referendum, the Sun gave over its first 10 pages to pro-Brexit coverage.”

And the principle means the tabloids used to obtain this result was the “endless xenophobic nudges of its immigration coverage.” Of course these newspapers will say they were just expressing their readers fears, but when they are reduced to making up stories to encourage this fear any claim to innocence becomes very hollow. Fueling anti-immigration feeling was their version of a southern strategy, and Brexit saw its culmination.

Having achieved this objective, will the tabloids start ignoring the immigration issue, enabling the greater immigration and zero tariffs that Mr. Bourne desires? Or will the influence of these tabloids, perhaps now greater than it has ever been, start to fade away? To the extent that these seem silly questions reveals the political naivety of the neoliberal Leavers. It is highly unlikely that Theresa May will become squeamish about damaging business through immigration controls to enable her to meet her immigration target. The best hope of those who do not want to go down this path is that, as Jonathan Portes expects, the Brexit vote itself starts to reduce the immigration numbers.

Brexit will also put other pressures on May which are likely to move her away from neoliberal policies, as the assurances given to Nissan indicate. As Bourne writes in a recent blog: “if this is a commitment to permanent or semi-permanent support to almost ‘make up for’ changed trade arrangements then it is hugely misguided.” Misguided it may be, but that is the direction the politics will push a Prime Minister determined to be seen as making a success of Brexit. Just as Republican’s have agonised over how to deal with Donald Trump, so it will become clear to UK neoliberals the damage to their cause that Brexit will generate.

More on how it happened

My post ‘The triumph of the tabloids’ is now easily my most read post in the four and a half years I have been writing a blog. I suspect that partly reflects readers from overseas trying to understand how on earth British voters could have chosen to do something so obviously harmful to the economy. I have subsequently been pleased to see others picking up the same idea: Maria Kyriakidou here and Charles Grant here. As Grant says, the tabloids “became propaganda sheets” for Leave. He goes on : “as I discovered while knocking on doors during the campaign, many Britons believe all sort of bizarre things about the EU that have no basis in fact, and the source of which is ultimately newspapers”. Of course the media cannot alone win a referendum like this, and Charles Grant also focuses on other factors, but in many of the accounts of how Brexit happened that I have read the media often does not figure at all. The idea that the media does not matter, or just reflects public opinion, is simply wrong.

Although the title of my post referred to the tabloid press, their success was only possible because the broadcast media failed to provide any antidote. I have written about this a lot during the campaign. One link that I did not mentioned is suggested by Grant. He writes

One of the BBC’s most senior journalists confessed to me, a few days before the referendum: “If we give a Leaver a hard time, we know that the Mail or the Sun may pick on us and that that is bad for our careers. But if we are tough on Remainers it might upset the Guardian and that doesn’t matter at all. This affects the way some colleagues handle interviews.”

He also notes that many journalists failed to contest falsehoods put forward by Leave politicians simply because they were not knowledgeable enough, a point I have made many times about political commentators knowledge of economics. This is so important, because if politicians quote ‘facts’ that are false and interviewers let them pass, you are bound to leave an impression among viewers that these facts are true. As any macroeconomist will tell you, people make decisions based on the information they have.

But it is not just the Brexit vote that the tabloids are partly responsible for. It is the racism and intolerance that they have helped legitimise. Of course politicians must take most responsibility for this, but the tabloids play an important role. This will only become worse as those who voted Leave become disillusioned that nothing has improved, and of course no tabloid will ever apologise for getting it wrong. They are the epitome of power without responsibility. And because of the power these newspapers have, politicians dare not criticise them for it. One did, and he paid a heavy price.

The triumph of the tabloids

There is a lot of talk right now about an angry, mainly old working class who used Brexit as a way of kicking back at an establishment that had brought them nothing but grief over the last decade. The Leave campaign managed to channel that into anger at the EU, even though it had precious little to do with the EU. The key is to ask how did that happen, and why did it not happen just one year ago?

In the 2015 general election Labour highlighted the decline in UK real wages, and promised more money for public services. They were defeated - no angry electorate wanting to get rid of the establishment then. Did that electorate feel passionate about European migration? UKIP only managed to get one MP elected. 

In 2015 the electorate voted Cameron back in because they thought the Conservatives were more competent at running the economy, and that Cameron would be a better leader than Miliband. In the last few hours we can clearly see that both beliefs are incorrect, and some of us said it back then. But that cannot be the whole story because that same leader with the same economic competence has just been heavily defeated.

Did people just vote for the higher food and petrol prices that sterling’s depreciation will bring? Of course not. Nor did they vote for a possible recession. They did vote for lower immigration, but only in a small minority of cases because they dislike immigrants. People thought less immigration would lead to a better NHS, more secure jobs and higher real wages. They may get lower immigration, in time, but they will certainly will not get a better NHS and substantially better working conditions as a result.

It is tragic that we have left the EU. But what is equally tragic is that people who voted for that are very quickly going to find out that they were sold a pig in a poke. They have been deceived, and that will only increase the disillusion and disenchantment with the political system. Of course we should blame Johnson and Farage and the rest: the UK has paid a very high price to facilitate political ambition. Of course we should blame Cameron and Osborne for taking the referendum gamble and stoking anger with austerity. But a few politicians alone are not capable of fooling the electorate so consistently. To do that they need to control the means of communicating information.

In 2015 I argued that mediamacro had won it for Cameron and Osborne, and pretty well no one took this seriously. Just a year later, the united voice of economists has been successfully dismissed as Project Fear. Not by the people, but by politicians working together with most of the tabloid press, and a broadcast media obsessed with 'balance'. The tabloid press has groomed its readers for Brexit. If any good is to come out of this, it will involve defeating most of the tabloid press, and then forever reducing their influence. And given the power of that media, this can only be done by a united opposition that is prepared to cooperate in an effort to beat Johnson and Farage.

There is also a very big warning here for the US. Clinton may be ahead now, but do not underestimate the power of the media (which is still giving Trump much more coverage) to turn that around.

Brexit is perhaps the first major casualty of the political populism that has followed the financial crisis and austerity. That populism triumphed in the UK because the establishment underestimated its power and did nothing to tackle the resentment on which it feeds and the misinformation on which it thrives. It has been strong enough to turn a traditionally outward looking nation into one that turns its back on its neighbours. The leaders as well as the people of other countries should not make the same mistake as the UK just made.

Power without accountability in our tabloid press

Even though I have been doing this for four and a half years, I still found it unnerving when, after typing ‘UK media bias EU’ into Google, one of my own pieces comes up on the first page. The gist of that (mid-April) post was if the broadcast media stuck to their ‘shape of the earth: views differ’ policy, our EU membership might disappear as a result.

What I took as given in making that comment is the partisan behaviour of the non-broadsheet press. In a more recent post I argued we should not take this as given. Martin Kettle subsequently spelled it out very well here. He wrote “Remain or leave? Politics or the press? The question on Thursday, just as Humpty Dumpty said, is which is to be master.” But is this kind of sentiment just a form of Guardian writer/reader transference: blaming the messenger of working or lower middle class views because they abhor those views? Is this, as comments on my own post suggested, just the tabloids reflecting the views of their readers?

Forget the straw man of newspapers telling readers what to do. The concern is not with which side newspapers formally endorse. It is about how stories are selected and portrayed. [1] Like the recent front page story from the Mail about migrants in a lorry saying “we’re from Europe - let us in”. Except they didn’t say that. Incredibly the Mail is not the worst offender for putting stories like that on its front page, as the montage below shows (source @kwr66 HT @mehdirhasan).

But maybe readers of The Express want to see countless stories of the migrant ‘threat’. But if this is so, you would expect the press as a whole to be balanced in publishing either pro or anti Brexit stories, reflecting the balance of the polls. But research finds that, when you weight by circulation, pro Brexit articles outnumber pro remain articles more than 4 to 1. (You can see a pictorial version of the same point from a different source here. Or for another source here.)

But even though the ‘only reflecting their readers’ canard is untrue [2], there is I think a more important point. I don’t just want false or misleading stories about the migrant ‘threat’ to be balanced by an equal number of misleading stories about how wonderful migration is. I want stories that contain some real facts, so that people who read these stories can be informed. I want a situation where we no longer have nearly 60% of the population believing Turkey will be an EU member within 10 years. (In 2013 the British appeared to be the worst informed about Europe among Europeans.)

It is sometimes said that telling facts is the job of the broadcast media, and newspapers are about opinion. Right now I would turn that around. The broadcast media are so frightened of appearing biased that they describe clear falsehoods as simply ‘contested’. In the soundbite world they inhabit, that is as far as they go. They set up debates rather than explore issues. They broadcast opinions rather than facts: the opinions of politicians. In print you can go further: you have the space to present the facts and back them up. That is what the broadsheets at their best do.

Why does the Mail or the Sun not do that? Because their owners have a clear line to push, and all too often the truth gets in the way of that. They will not tell their readers that restricting immigration will make it less easy for them to see their GP or wait longer in A&E. They will not tell their readers this because they would rather their readers believed otherwise. [3]

Facts like these get in the way of the Leave campaign. They would prefer an emotional rather than rational debate. Shamefully, they play on the emotions of nationalism and the threat of others. They will not tell their readers that there is no chance Turkey will join the EU in the near future because they want to use that false threat to generate fear - indeed vote Leave leaflets headline with this threat.

And I have to say, as others have done, that those who distort facts to whip up such emotions for political gain have to take some responsibility for the tragic side effects of their actions. When politicians do this we can, in time, hold them to account. When the owners of newspapers do this it appears we have no recourse, and they can go on doing the same again and again. If there is an issue with ‘control’ in our country, it is not with Brussels bureaucrats but with a small number of press barons that wield such power without a trace of accountability. [4] We need to find a way to ‘take back control’ of the means of communicating information.

[1] Declan Gaffney gives a nice account, in the context of stories about benefits, of how this can be done.

[2] In this mythical story of reader reflection, the owner of the paper only dictates the newspaper’s line because only he can truly sense the wishes of his readers. So when Murdoch instructs his journalists to write more anti-Miliband stories, it is because he just knows this will sell more papers.

[3] Another line apologists for these tabloids use is that readers are well aware of their paper’s political bias, and it does indeed seem to be true to some extent. But when these readers see no alternative source of facts (and most readers of these papers will not seek out alternative sources), the misinformation pushed by these papers sticks.

[4] Before anyone says ‘freedom of the press’, note that in the UK the broadcast media have to conform with a code that requires both impartiality and accuracy when reporting news. Does that mean our broadcast media is not free? That code is enforced by Ofcom. Why not apply something similar to news content in the press?

Postscript (26/06/16): one more piece of evidence for the distortionary impact of the tabloids is how biased the public's view is of key facts, and the bias all goes in one direction.

Brexit despair

Among everyone and everything I read at the moment there is a mixture of disbelief and despair over the now distinct possibility that the UK will vote for Brexit. Obviously that is partly because I tend to read other economists, and as Chris Giles notes economists are virtually united in believing Brexit will be bad for the economy. (If you cannot access the FT, read Paul Johnson.) But it is also because there is a clear educational divide in support for Brexit, and I suspect most of what I read comes from one side of that divide. The only other event that I can imagine causing an equal degree of unanimous disbelief and despair would be if Trump looked like becoming President.

There is disbelief because it makes no sense. Of course there is a minority who hate the idea of sharing sovereignty, and another minority that really hate immigrants. But these two groups combined would not be enough to win a referendum. Instead we have a much larger group that are concerned about immigration, but their concern appears to be not worth very much to them. This was something I noted some time ago, but it seems to be a robust result: in a recent ComRes poll 68% say they would not be happy to lose any income to secure less immigration (perhaps because they believe less immigration will raise their income).

It makes no sense because economists are as sure as they ever are that people will on average be worse off with Brexit. But a large section of the population have either not got the memo or have ignored it. This will be an important point when it comes to what happens after Brexit: for many Brexit will have been a vote to control immigration, but only because a lot of those same people think that immigration can be controlled without making them worse off. In other words it will not be a clear mandate for voting against a Norway/Switzerland option, because anything else will make people worse off (as most MPs know).

There is despair because economists and others who think Brexit will make people worse off have no way of getting their message across to those that really need that information. I know Gove has said he is fed up with experts, but I’m not convinced most people are (for reasons given here and reiterated here). But writing articles in the Guardian or letters to the Times will not get through to those we need to hear the message (see final chart here). It is why I wrote this. For academic economists I think it is part of a general problem that the media are losing interest in what we think, which is why I wrote this for the Royal Economic Society newsletter.

Whether we do or do not leave the EU, I hope one result of this referendum will be that otherwise sensible people will stop saying that our tabloid press is not that much of a problem. It might not be if our broadcast media were brave enough to report facts, but instead it is obsessed with balance, as well as being heavily influenced by what some tabloids say. How else can you account for 58% of people thinking that Turkey is likely to join the EU within ten years, which in reality is close to a zero probability event. Democracy can become dangerous when a few people have so much control over the means of information.