Right wing propaganda from the BBC and the normalisation of deficit hysteria

We are used to claims that the BBC has a liberal left wing bias. Today we have had an example of almost indefensible right-wing bias on Radio 5. As highlighted by the increasingly strident  Paul over at Though Cowards Flinch, the BBC are running a “fun” competition on Radio 5 and online at the BBC’s moron pit Have your Say.

MPs will be breaking up for the summer tomorrow, 27 July, but when they return they will still have to deal with the £156 billion deficit which looms over Britain.

This week, BBC Radio 5 live Drive is looking for your big ideas to drive down the deficit. Today the focus is on home savings, including on health, education and local services.

As Paul says the deficit is not looming over Britain. We have run deficits through a recession which have helped mitigated much of the worst of it. As the employment situation continues to stagnate deficits don’t loom, arguably they shine.

A minor annoyance is that the Taxpayer’s Alliance is given a free run to complain about Britain’s overdraft. Britain can borrow at an interest rate of 3-3.5% for 10 years, if I had an overdraft like that I’d be over the moon. I repeat this country doesn’t have an overdraft, you twat.

I am perfectly happy when I see the Institute for Fiscal Studies report unopposed, but even at times watching TPA coverage I can’t help thinking that Lenin would be a more balanced commentator than Matthew Sinclair.  But the obvious bias in allowing The Taxpayer’s Alliance free range is only a minor gripe for me.

Partisan hacks will always be with us, what is more worrying is that deficit hysteria is becoming embedded in the reporting of our economy. Even when the The Taxpayer’s Alliance are not on the air the BBC are sounding increasingly like them.

For example, when I highlighted that inflation would have some positive effects an ex-TPA propagandist offered a simple alternative (after calling me immoral, a thief, uncaring and inhumane)…

I do have a policy suggestion – instead of your approach, which is spend, spend, spend, borrow, borrow, borrow, borrow, inflate, cut public spending.

… I don’t know, maybe its just me, but I’m left thinking: “and then what?” [1]

The same approach has been taken by the BBC. Rather than ask why we must cut spending this is taken as the assumption on which a premise is built, just as the TPA do.

The Labour leadership is in disarray over the deficit and there seems little concerted effort to highlight the positive effects of ignoring Tory policy recommendation in the last few years, while we would never end up like Ireland we could be far worse off than we are.

The embedding of this deficit hysteria may have already reached a point where it is impossible to overturn. If we let them dictate the terms of debate we have lost the debate and Lost Decade, Here We Come.

_____

[1] I’m guessing Mark Wallace thinks that that cutting public spending would lead to an increase demand in the private sector, right? [2] But what I don’t get is that if cutting public spending leads to an overall increase in demand this would produce some inflation, right? But that’s bad, right? Or would this be a “good” kind of inflation? I don’t get the policy implications, Mark Wallace’s advice to “cut public spending” has pretty much left me with more questions that answers.

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14 thoughts on “Right wing propaganda from the BBC and the normalisation of deficit hysteria

  1. Why have I still not subscribed to this blog? This must be rectified. MY apology is in the form of a quote:

    Samuel Brittan:

    The trick of the British establishment is to turn discussion from “whether to” into “how to” questions. The media debate is on which government services to cut or on the balance between spending cuts and tax increases. Once the discussion has been channelled into these trenches the establishment has won. The real argument, however, should be on whether we need unparalleled fiscal austerity or not.

    http://www.samuelbrittan.co.uk/text369_p.html

    Iraq is another good example.

    1. Yes, you’ve left two good comments, you are very welcome. FYI, my recommending reading to you is in RSS feeds in the sidebar on the front page, many good blogs if you like this one.

      I’ve read parts of the Sam Brittan piece but not all of it, I will read with interest, thank you.

      1. No problem.

        We read many of the same blogs. Others there though I don’t care for. For instance, I find Worstall to be an insufferable tit.

        But there are some blogs there I’ve not come across before, so I’ll be having a browse through later.

        1. Worstall is a tit at times, but he is interesting to spar with and is consistent in his liberalism.

          Paul Sagar is especially good.

          Chris Dillow I assume you already follow, if not, do. Duncan’s Economics Blog, Krugman, DeLong, Marginal Revolution, The Money Illusion, Dani Rodrik, Ryan Avent, Worthwhile Canadian Initiative, Matthew Yglesias are all great blogs too.

          Hopi Sen is a good centre-lefty who writes well.

          All the writers are Though Cowards Flinch are great.

          Tabloid Watch, The enemies of reason, Angry Mob are all absolutely essential however, just to help you keep an eye on reality.

          spEak You’re bRanes and Flying Rodent are hilarious.

          Open Mind and Skeptical Science are amazing on climate change. Especially http://www.skepticalscience.com/argument.php which I’ve taken to just copy and pasting from to defeat almost any climate sceptic/denier troll.

          Phew. The blogsphere rocks in short, but better than the actual papers and TV for news.

          1. Most of those blogs I have heard of, and read most of them. I wish I had time to read Yglesias, but I lack the time to read him. It’s the same reason I stopped reading Ezra Klein.

            Thanks for the nod to Duncan’s Economics Blog – I went over there when Giles Wilkes’ blog who had him on his blogroll, but that blog seemed dead so I didn’t subscribe. Now I know that it has been resurrected!

            Some of my suggestions (all can be found with a quick google), maybe not all your cup of tea, but here we go anyway:

            * A Fistful of Euros
            * Michael Pettis’ blog China Financial Markets (don’t be put off by the title which makes it sound very narrow – Pettis writes really quite excellent economics essays taking China’s macroeconomic position and putting it in a global context)
            * Economist’s View
            * Martin Wolf’s Exchange (you should check out his columns too)
            * Greed, Green and Grains can be good
            * RealClimate
            * Deltoid (Tim Lambert seems to mainly blog about climate change right now, but if you look at the his list of categories, he’s been good on a wide variety of issues in the past e.g. the Lancet studies about deaths during the Iraq war)
            * Pharyngula (although if you’re religious, you might want to avoid there)
            * David Mitchell in the Observer can be funny
            * Mind Hacks
            * Science-based Medicine
            * Journal of Medical Ethics blog at the BMJ is thought-provoking
            * Aaronovitch Watch
            * Glenn Greenwald
            * Crooked Timber
            * Language Log
            * UnderstandingSociety
            * The Orwell Diaries
            * Project Syndicate (quality highly variable as many different people syndicated)
            * Schneier on Security
            * Steve Reads
            * Starts with a Bang
            * Cosmic Variance
            * NASA’s Astronomy Picture of the Day

            Okay, I got carried away.

            Worstall is a tit at times, but he is interesting to spar with and is consistent in his liberalism.

            Emphasis I feel should be on the word *his*. His liberalism, what he calls “classical liberalism” (although I’m skeptical of how much the classical liberals would agree with him), is what I call libertarianism. He may be consistent, but consistency is no virtue if it means “NO IRISH” signs as far as I’m concerned.

      2. Oh and btw, you should add your Global History blog to your blogroll. If your post linking to it hadn’t been on the front page, I’d never have found it.

        1. I will be changing the layout of my front page in October to get the two rss feeds from this blog and the other at the top of the near-right and far-right (argh!) columns. I don’t need it there yet because nothing will be posted for two months.

          It will probably become my main blog from October onwards as I will need to concentrate on my degree more than I concentrate on my current job.

  2. LeftOutside – I followed you over from “CrashBangWallace” – apologies, like a bowl of Pringles at a party, this deficit stuff is hard to leave alone – must be the MSG.

    Re: the main thrust of your article – Not sure the BBC is right wing or left wing, although I do think there is no such thing as unbiased reporting, it’s impossible not to have some kind of angle. Generally people view things as unbiased when it fits their own biases, some people think the opinions in the Daily Express genuinely ARE what the majority of people in the country think – quite a terrifying thought. However the language used is often a bit over the top – “looming” deficits, “savage” spending cuts etc. Factual based reporting has a lot to be said for it although increasingly even “factual” reports are more editorial in nature – where does helping people understand the facts (the democratisation of information) run into telling them what to think?

    “Have your say” – morons – I can only advise you to visit the excellent “Speak you’re branes” at

    http://ifyoulikeitsomuchwhydontyougolivethere.com/

    Re: your footnotes –

    “[1] I’m guessing Mark Wallace thinks that that cutting public spending would lead to an increase demand in the private sector, right?”

    Depends on what you mean by “cutting public spending” as public spending will actually rise in cash terms over the next 4 years, it only falls in real terms. Basically the inputs, the costs, are being cut. The thinking is that by eliminating the deficit and stabilizing National debt at a level below 100% of GDP we prevent interest rates rising too much, which in turn encourages growth in the private sector. It’s not so much a case of cutting public spending increasing demand in the private sector, but rather that a large deficit will suppress growth in the private sector (through investors demanding a higher return on UK debt and the crowding out of the private sector in the debt markets).

    [2] But what I don’t get is that if cutting public spending leads to an overall increase in demand this would produce some inflation, right? But that’s bad, right? Or would this be a “good” kind of inflation?

    The classic way to look at inflation and demand dynamics is through the equation MV=PQ, where M is the supply of money, V is the speed at which the money circulates, P is the price level and Q is the level of output. Basically the problem with a deficit is that you put more M in the system, but not necessarily that much more Q (as the public sector is less productive – in economic terms, this is not a value judgment – than the private sector. Hence if V remains constant, M grows faster than Q then P must increase to balance the equation. Private sector growth on the other hand, with a higher return is likely to suppress inflation for the economy as a whole, or increase it at a slower rate than the equivalent public sector expansion.

    On a more conceptual level, how would you determine when the right moment to start cutting the deficit is? (assuming you accept the deficit should be cut – if not, we’re going to be exchanging for a while longer…)

    Charlie

    1. You deserve a proper response and I’m heading out in an hour and have to get ready, so I’ll do a long reply to.

      First of all, you are completely welcome at my blog, I like constructive engagement. Also, I know Speak youre Branes and linked to it in the piece actually, one of the first blogs I followed.

      I don’t believe in objective reporting at all. Everything has a bias, but not all biases are equal.

      The “What to do about the deficit” is a subset of the question “Should we do something about the deficit.” The discussion of why we need to cut is silenced by the BBC and this is a bias too far for me. Perfectly happy with the “How to cut” question so long as it is put in the context of “Do we need to cut.”

      Sadly I think the left has screwed up and let the right win the narrative battle. It was mid 2009 and Labour just didn’t back stimulus enough. We’ve been on the back foot since.

      I’ll address the response to my foot notes another time.

    2. The thinking is that by eliminating the deficit and stabilizing National debt at a level below 100% of GDP we prevent interest rates rising too much, which in turn encourages growth in the private sector

      But the recent budget has the government aiming to stabilize debt at 70% of GDP (as opposed to the policy of the previous government which was stabilization at 80% of GDP).

      Also, there’s no special or frightening about debt reaching 100% of GDP. In fact, for most of our history, the UK has had government debt above this number:

      http://www.ukpublicspending.co.uk/downchart_ukgs.php?year=1692_2011&state=UK&view=1&expand=&units=p&fy=2010&chart=G0-total&bar=1&stack=1&size=l&color=c&title=

      Obviously it would be preferable if debt were not this high, but this is a symptom of the biggest economic crisis in 70 years. I would rather have high debt than have millions un- or under-employed. One day that will no longer be a trade off, but not yet, and not necessarily if/when debt reaches 100% of GDP.

      There’s more I don’t agree with in your comment, but I don’t have time to type much more. I may come back to this if/when I have more time.

      1. The debt ration is also not the only determinant of long run interest. If there’s a lot of entrenched unemployment, if the economy is working below capacity, if investment is aneamic, if real or nominal gdp growth is predicted to be depressed, lots more stuff too as well I’m sure. A narrow focus on debt is unhelpful.

  3. Alex,

    OK – the 100% number is perhaps a bit arbitary (although it tends to be broadly accepted at the point from which it’s very difficult to pull back from without default or severe reprecussions for the economy). I would point out that the reason that our debt has been so high is that we had been fighting wars. This is a bad recession but we have had several bad recessions in the last 30 years, if we had responded as you suggest (I’m sure you would have made the same case each time) to each of those in turn we would have a horrendous national debt by now.

    I also take Left Outside’s point about focusing on a narrow measure of debt, there is no magic number and the effect on the economy is what we should assess.

    As for whether stabilisation at 70%/80% means we can run the debt up a touch more – well, you clearly think we can afford to – I clearly don’t for the reasons set out – in short form, I think it will end up pushing up interest rates across the economy both through the international money market rates, and via the crowding out of the private sector investment. This is probably just an axiomatic difference between us – you believe that private enterprise needs “support” to recover, I think the government needs to get out of the way and let the private sector do it’s thing. Very happy to engage with you on this debate – you’re clearly well read up on it.

    I would also ask you the question I asked Left Outside – how will you determine when the right moment to reduce spending (in real terms) is? As a corrolary, given the cuts are phased over the parlimentary terms, are you absolutely sure that there will still be need for “suppport” in 2015?

    As for ” I would rather have high debt than have millions un- or under-employed”. So would I, but I would rather have neither, I’m not buying the whole debt-employment trade off, as it just doesn’t make sense to me (as has probably become clear).

    Charlie

    1. I think I might put together a post in response to this because, for a change on what can be a fractous subject when left and right meet, you have offered a very measured response.

      Alex, if you have anything to add, I’ll try to take it on board.

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